USAID funding: the requirements for companies & NGOs in Africa & maintaining compliance

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If anything is a make-or-break situation for fledgling US companies and NGOs looking to expand in Africa, it is securing USAID funding.

With most NGOs’ main difficulty being securing capital, and for-profit companies struggling with cashflow issues, any assistance provided by USAID (United States Aid for International Development) can make a significant difference. Besides, the potential aid businesses and NGOs can receive is considerable. In 2024, for instance, USAID was given $32 billion as part of its spending budget, specifically set aside for foreign assistance…

But as valuable as USAID assistance is, it is also just as difficult to secure.

From beginning to end, it is a laborious matter of complex regulations that companies must abide by to even be considered for a grant, loan, or other form of financial assistance.

Find out what the main requirements for USAID awards are – and how EORs like Africa HR Solutions can help you maintain compliance once you have been approved for a USAID award.

USAID Requirements for businesses and NGOs expanding to Africa & elsewhere

2 types of USAID awards

USAID awards come in two main forms and are further subdivided according to your company or NGO’s activity, and alignment with USAID objectives.  The main types of awards are:

Acquisition

In an acquisition agreement, USAID buys goods and services from a contractor to execute an Activity as instructed by USAID.

Acquisitions operate through 2 mechanisms:

  1. Cost reimbursement contracts
  2. Fixed price contracts

Applicants vying for acquisition agreements must present a proposal in response to a solicitation known as a Request for Proposals (RFP). These RFPs outline the requirements and explain the evaluation and selection process undertaken through which USAID will choose the successful candidate.

Acquisition contracts are overseen by a USAID Contracting Officer (CO).

Assistance (Grants & Cooperative Agreements)

On the other hand, assistance awards result in grants and cooperative agreements.

In such instances, USAID disburses funds to a recipient with minimal direct involvement. “Assistance” equates to aiding a program for the public good, with the U.S. Government serving as a financial pillar as opposed to a buyer.

As such, NGOs are more likely to apply for “Assistance” instead of “Acquisition”.

To apply for assistance awards, interested parties must apply in response to either an Annual Program Statement (APS) or a Request for Applications (RFA).

These documents typically include a program description and detail how USAID will assess and select the successful partner.

Assistance awards are overseen by a USAID Agreement Officer (AO).

Pre-requirements to apply for USAID

To apply for awards by USAID, businesses and NGOs must obtain an NCAGE code (NATO Commercial and Government Entity).

Following the obtention of this code, they must then register on SAM (System for Award Management).

Phases of Award Cycle

SOURCE: UNDERSTANDING USAID AWARDS “How to Work with USAID” Training Series

USAID compliance post-approval

Once you have complied with the above regulations, submitted your application and been approved by USAID for an award, there are more regulations to abide by.

This is to be expected, as there is really no end to compliance. It is an ongoing process that always keeps businesses on their toes. An Employer of Record (EOR) or Professional Employer Organization (PEO) like Africa HR Solutions can help you navigate these regulations and abide by them so you do not lose your hard-earned award from USAID.

Main elements of compliance

These are some of the main regulations USAID-backed companies must comply with after obtention of their award:

HR Policies

Employment Law

Companies must adhere to the labor legislation of the country they are operating in and in which their workers are formally employed.

This includes regulations to prevent discriminatory hiring practices, or to mandate certain benefits. It’s crucial for both the organization and its employees to establish clear understandings regarding each other’s rights (including grounds for disciplinary actions and termination, as well as the procedures for such actions).

Codes of Conduct

Codes of conduct must be instituted to address behavior that impacts an employee’s capacity to fulfil their duties and represent the organization.

These may include punctuality, fulfilling assigned tasks, fostering a safe and healthy workplace environment, and adhering to common workplace norms such as prohibiting harassment or discrimination.

Timekeeping

Recording of work hours is obligatory for all personnel remunerated through USAID funds, including contractors and part-time workers, and is necessary for the annual audit that the USAID conducts for all its awardees.

Hiring Due Diligence

You must provide a curriculum vitae (CV) for each employee hired under your award to verify their academic and work history.

Faith-Based Organization Hiring

Under the U.S. Equal Employment Opportunity laws, faith-based organizations implementing USAID programs can hire individuals who share their creed.

As such, you must ensure that your HR policies are explicit in this regard – a task which can be rather difficult given its delicate nature. This is why experts like Africa HR Solutions offer comprehensive services through their EOR/PEO solutions.

These solutions encompass the entirety of compliance, including all the previously mentioned elements, requiring little input from your side, and allowing you to focus on your

Drug-Free Workplace Policy

USAID Cooperative Agreements require the establishment of a drug-free workplace policy for your organization. All your staff members must sign this policy.

Procurement

Developing Effective Procurement Policies and Procedures

As an awardee, your aim is to ensure efficient and cost-effective utilization of the funds provided to your organization – all with the goal of delivering necessary services to beneficiaries. To accomplish this, awardees need to establish robust procurement policies, procedures, and practices.

Progress Reports

Monitoring, Evaluation & Learning (Pre-implementation)

Prior to the implementation of your USAID-funded activity, you will be required to develop a validated monitoring, evaluation, and learning (MEL) plan.

This plan outlines the data that you will collect to monitor progress, along with the methods for analysis and necessary adjustments, providing USAID with insight into the monitoring and evaluation process.

Branding & Marking

When collaborating with USAID, you are obligated to adhere to the relevant branding and marking guidelines for your project.

Marking involves the tangible application of a logo on various communication materials, as well as physical assets like buildings and vehicles, ensuring consistent and recognizable representation of the project’s identity across all platforms and assets.

This practice helps maintain visibility and promotes accountability for USAID-funded initiatives.

Main takeaway

This list is non-exhaustive and subject to change, should USAID update their policies or introduce new regulations.

As difficult as these regulations are to implement, they are even more difficult to keep up with when they change or when they are time-sensitive. An EOR and PEO service provider like Africa HR Solutions – which is also officially registered on SAM (System for Awards Management)

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