BETTER HEALTH THROUGH NPI
New Global Health award builds local capacity with new partners 

Under its New Partnerships Initiative (NPI) Annual Program Statement (APS), USAID’s Bureau for Global Health awarded a five-year $58.9 million cooperative agreement to Palladium Group, a business strategy firm that works on social and economic development projects around the world. As the prime partner for NPI EXPAND: New Partners for Better Health, Palladium will provide capacity building and mentoring to new and underutilized partners in multiple countries; these partners will collectively receive 60 percent of the award.

Jeff Barnes is the project director for NPI EXPAND: New Partners for Better Health.

Currently, five USAID Missions––in Ethiopia, Liberia, Mali, Senegal, and Tanzania ––are advancing NPI EXPAND. The local partners supported by Palladium include a private health federation, a social marketing organization, and health groups delivering tuberculosis care and family planning services.

In addition, NPI EXPAND is supporting the COVID-19 response in five countries. In Tanzania, the program will help community-run savings and credit groups shift their income-generating activities to the production of face masks for the public. In Brazil, it will bring together a social impact fund and a private-sector alliance to fund local NGOs in the Amazon region. And in Liberia, Senegal, and Tanzania, NPI EXPAND will mobilize religious and other community groups to educate their constituents about the risks of COVID-19 and ways to prevent infection. 

Jeffrey Barnes, Palladium’s project director, discusses the challenges and opportunities of implementing NPI EXPAND. 

Q: What are some of the trepidations a prime USAID contractor such as Palladium might have working with new or underutilized partners?

A: Any time you are a prime, you carry a business risk. You have to figure out a way to get new partners to make a contribution without underperformance. On the technical performance side, we go through a detailed planning process to reach agreement on the approach and targets. You want to be assured that the new partner has a viable plan. 

On the financial side, we have a number of strategies, including the use of fixed amount awards. The prime partner reviews the expenses and makes sure that all the documentation is there. With fixed amount awards, we agree on a technical approach and the value of each milestone.  

Q: Some of these new partners, such as NGOs, have few funds to finance the launch and early days of a program. Do you take this into account? 

A: If it takes a prime’s financial department two to three weeks to review expenses before issuing a funds transfer, the local organization could run out of money, halting its activities. That is a classic problem when there is no fixed award system.

With a fixed award, the technical approach and the cost are agreed to beforehand. We assign a certain percentage of the budget to those early milestones. We simply have to verify that they have completed the work to our satisfaction.

Typically, we front-load those first milestones to provide the local organization with some operating capital. At the end of the day, they are going to get paid only the agreed amount. But this approach cuts down administration and aids cash flow for those organizations. 

Q: Do fixed awards impact risk?

A: They considerably reduce what we call the audit risk. If an auditor does come in, every single receipt could be audited. And if it seems inappropriate or incorrect, an auditor can say, “No, I disallow this expense.” With a fixed amount award, the only thing the auditor will do is verify the same thing that the prime verified to ensure that the objective was realized. 

Q: Is the prime involved in the project launch and choosing the partner?

A: We have programs coming up in Senegal and Ethiopia that we will co-design with USAID and select a partner with them, but for the most part—particularly when it comes to the COVID-19 response—due to the urgency, these partners were chosen from the Mission’s past experience with local organizations in the various countries. Understandably, we prefer to work with these organizations since, in a crisis, we don’t want to lose time on a solicitation process. 

Q: What kind of vetting does Palladium do in this case?

A: We still have to verify that they have decent systems in place. Even though we are not going to refuse to work with them, we may require certain procedures to be put in place to fix problems X, Y, and Z before we can issue a first payment.

Q: What kind of a learning curve is there when you’re working with new partners?

A: Anyone who has done any capacity strengthening knows that the continuum is often huge in terms of the capacity of different organizations. Some local organizations are as well run as an international organization; then there are others with little business training or formal systems. 

The first hurdle is figuring out where on the continuum your local partner is in terms of staff level, financial procedures, and overall competence. We ask for things like their financial operation procedures. We conduct a risk assessment. We ask them to prepare a performance monitoring plan. Early on, we can tell if they understand what we and USAID expect of them.

Q: And if they are completely new to USAID?

A: Then it is a lot more work, but this is just a part of the start-up process. By requesting certain deliverables, you know rather quickly where they are on the continuum, decide if they are going to need more monitoring, and adjust accordingly. 

Q: In developing the milestones for longer-term (non COVID) sub-awards, how do you avoid donor dependency?

A: Much of the traditional approach to capacity strengthening has focused on improving the systems of local organizations so they are better able to respond to donor requirements.  These improvements can increase transparency and improve internal controls, but they can also significantly increase an organization’s fixed costs. So many organizations struggle to maintain these new systems when that donor is no longer their primary funder.

We focus more on strengthening technical performance in product and service delivery—an organization that achieves good technical results will attract donor interest and support well into the future. Another key element to our capacity strengthening is improving what we call “relational strength.”  We help local organizations develop beneficial relationships with government, potential partners, and important vendors, as well as sources of information and technical support, which in turn allow them to continue to grow their capacity, identify and take advantage of funding opportunities, and maintain good business practices. 

Q: In terms of the COVID response, is there a strategy in place? 

A: In most countries, the national ministries of health are leading. Palladium’s approach is to support them. We look for any possible gaps. The most obvious area is getting people to understand the risk. Mass education of people is something the health ministries are not really set up to do. That’s why a lot of our grants have been for risk communications and community involvement. 

Q: Under this award, 60 percent of the funds are directed to local sub-partners. For a prime partner,  is this viable from a business perspective?

A: I certainly think it is worth doing. I am honestly a true believer. Setting ambitious plans and finding ways to make them work is the way to go. Even if we do not hit the target, we will be close to it and will have learned a lot of operational lessons.

Q: Does Palladium maintain a high level of confidence working with new partners dispersed around the world, especially when it comes to communicating the best ways to combat COVID-19?

A: I look at it this way: People do pay attention to who is delivering the messages. Local organizations are already known in their communities and have credibility. This is true during a pandemic or not. We can mobilize these groups and get crucial messages out.

We try to help local organizations establish their own agendas and their approaches to solving problems. By the end of the engagement, ideally, we’ve not just implemented a health program, but also left those organizations stronger.