Contractors find fertile fields abroad
International development work continues despite economic recession
- By David Hubler
- Jun 01, 2010
Federal contracting abroad — often funded by the U.S. Agency for International Development — remains a fertile field for U.S. companies despite the economic recession of the past few years.
Each year, according to the USAID website, the agency awards approximately $4 billion in federal contracts, grants and cooperative agreements to U.S. contractors, primarily for technical assistance but also for commodities, equipment, transportation and humanitarian services.
Development Alternatives Inc., which has worked in 150 countries since its founding in 1970, earned $379.6 million in federal prime contracts in 2009 to rank No. 61 on the 2010 Top 100.
The company is one of five on the Top 100 whose primary business is international development. The others are Chemonics International Inc. (No. 51) Coffey International Ltd. (No. 63), Louis Berger Group Inc. (No. 76), and Creative Associates International Inc. (No. 92).
DAI, of Bethesda, Md., has projects that include USAID-funded work in Afghanistan, management of a water efficiency project in Jordan, and assistance with improving the cotton industry in Pakistan, the world’s fourth-largest producer.
In addition, DAI is involved in combating infectious diseases around the world through a cooperative agreement with USAID that is worth about $75 million, said James Boomgard, DAI president and chief executive officer.
The project helps five global centers respond to emerging infectious diseases, such as swine flu and avian influenza.
“Most of our work is designed to build local government and academic institutions’ capacity in places as widespread as Thailand and the Democratic Republic of Congo and Uganda to prevent the spread of diseases that are largely emerging from the livestock sectors,” Boomgard said.
The Local Governments and Community Development program in Afghanistan, worth more than $200 million, is the company’s biggest award.
One of four DAI programs in the southwest Asian nation, the LGCD program involves helping Afghan officials cultivate the population’s allegiance to the national and local governments instead of the Taliban.
With DAI’s help, the program recently installed networks, computers and solar lighting systems in five district centers throughout Afghanistan, part of a countrywide effort to expand Afghan government credibility by improving public services.
“There [also] is a training and technical assistance component," Boomgard said. "The other part is finding quick impact activities that are valuable to the local population that can be done in conjunction with the government to show the population that the government is prepared to deliver,” he added, citing as an example a small-scale project to rehabilitate local irrigation canals.
DAI also is involved in the Incentives Driving Economic Alternatives – North, East, West project, known as IDEA-NEW, which USAID also funds.
The program assists local residents, including women workers at a produce packing plant, with management of new agricultural projects in eastern Afghanistan near the Pakistan border, where Taliban influence is strong.
Although U.S. funding for Afghanistan has increased the past few years, the rate of spending and amount available for U.S. companies are “not going in the same direction,” Boomgard said.
“I think we’re going to see more dispersion of how the development dollars are spent,” he said, citing a proposed U. S. plan to give Pakistan $7.5 billion during the next five-and-a-half years for economic development projects to be created and managed by Pakistan rather than USAID or the Defense Department.
The future model will likely include selling development services to local government and other international donor organizations rather than awarding the work to U.S. contractors, Boomgard said.
Ray Bjorklund, senior vice president and chief knowledge officer at government market research company FedSources Inc., concurred with that prognosis.
Bjorklund said there will be more demand for contract services as the drawdown continues in Iraq, where the civil affairs functions — such as governance and public safety — that have been carried out by the military will be replaced by civilians and State Department officials.
State’s 2011 budget request of $58 billion includes significant increases for foreign assistance programs, especially for foreign military financing and the Pakistan Counterinsurgency Capability Fund.
“But in the appropriations process, the only real clear message that has come back now is from the Senate Budget Committee, which said, ‘We agree with the president’s budget, but we want to take another $4 billion out of those overseas programs.’”
That could affect USAID contract spending, Bjorklund added. “I think that there’ll be some kind of compromise there, and I think some of that program growth will go forward.”
ManTech International’s contract work abroad for USAID is only a small percentage of its government business, said Stuart Davis, executive vice president of strategy and communications at ManTech. The company recorded $855.6 million in prime federal contracts in 2009 and ranks No. 31 on this year’s Top 100.
ManTech has about 1,600 employees overseas, Davis said. “About 1,400 of those are in Iraq and Afghanistan,” Davis said.
The largest group is providing maintenance support for the mine-protected, ambush-resistant vehicles when they break down. “That work has gone on for some time and is a reasonable component of our revenue,” Davis said, declining to provide more details.
ManTech also has deployed teams to assist NATO with communications information systems technology, project management and network infrastructure maintenance in Afghanistan and Iraq.
The work extends the existing network’s command-and-control capabilities, which facilitate critical intercontinental communications between NATO headquarters in Europe and operations in those countries.
The Louis Berger Group, one of the larger international consulting companies, with more than 5,000 employees and affiliate employees in more than 90 countries, made the Top 100 this year with $259.5 million in federal revenues in 2009. LBG ranks No. 76.
In December 2009, the private consulting company unveiled a $36 million road construction plan for the Government of South Sudan’s Ministry of Transport and Roads, with major funding from USAID.
Some of the objectives of the Sudanese project were to establish a road authority; improve planning capacity, management and supervision of road construction contracts; and facilitate coordination with the United States to undertake road network improvements.
One of the first projects LBG and its subcontractor, Terrain Services Ltd., completed was the construction of seven new bridges along a regional road.
“The road programs are the largest employer in south Sudan,” USAID adviser Terrence Kramer told the Sudan Tribune newspaper last month.
Further construction and maintenance will increase employment, make road transport more efficient, and preserve government and community investments in the region, Kramer added.
LBG also is involved in the Growth with Equity in Mindanao program, now in its third iteration, which promotes economic growth in the Philippines city.
The program involves various activities, including agriculture, vocational education, infrastructure development and reintegration of former insurgents into civil society, according to an e-mail reply from Holly Fisher, LBG corporate communications manager. In addition, she wrote, LBG is operating two programs in Iraq to promote private-sector growth and employment and develop Iraqi agricultural businesses and markets.