The pledge that reshaped a market
In November 2021, USAID Administrator Samantha Power set a target: by 2025, 25 percent of eligible USAID funding would go directly to local partners, and by 2030 half of all programming would place local communities in the lead. The commitment, formally documented in the Agency's Localization page, reoriented an entire procurement supply chain.
The politics around USAID have shifted materially since 2024. But for consultancies whose revenue depends on Agency awards, the operational implication of the localisation agenda has not disappeared. It has hardened.
What "local" actually means
USAID defines a local entity in ADS Chapter 303 as, broadly, an organisation legally organised under the laws of the recipient country, majority owned by citizens or lawful residents of that country, with its principal place of business in that country, and managed by a governing body the majority of which are citizens or lawful residents.
That definition is narrower than most Washington-based primes assume. It also matters commercially. Awards that count against the 25 percent target must go to entities meeting this definition, not to the local office of a global consultancy.
Three moves that separate winning primes from losing ones
1. Treat local partners as co-designers, not sub-awardees. The bids that consistently pass USAID technical evaluation now describe local partners as leads on specific results areas, with genuine authority over budget and design. Named partnerships written in the past tense (previous joint work, joint publications, joint delivery) read differently to evaluators than partnerships written in the future tense.
2. Rebuild your past performance library around localisation. CPARS references that describe capacity transfer, local staff progression, and local system strengthening now score materially higher on Section M evaluation than references that focus only on delivery volume.
3. Track the Business Forecast weekly. USAID's Agency Business Forecast discloses upcoming solicitations, expected release dates, and, crucially, the intended competition category. Bids where the forecast lists local competition are effectively closed to international primes as leads.
The unglamorous truth
Localisation is not a compliance requirement bolted onto USAID contracting. It is a redistribution of who gets to lead. For international consultancies, that is a structural change, and the firms adapting fastest are those that have stopped treating local partners as sub-clauses in the proposal and started treating them as the strategy.
The OECD DAC has tracked a similar direction of travel across other bilateral donors. FCDO's Rules for Grants and Contracts increasingly reference local partnership, as do the Nordic Development Fund and Germany's GIZ.
The 25 percent number may be revised. The direction of travel will not.