9. Agency for International Development · Notable
Eliminate cost-plus reimbursement contracts at USAID
Printed page 264 9. Agency for International Development
“Crucial to the strategy will be increasing the use of open competition that lowers barriers to entry and fixed-amount awards that carry less of a compliance burden along with eliminating cost-plus reimbursement contracts that favor large companies.”
What has happened
- Attempted
State told Congress it will "integrate the use of pilot programs for performance-based payments in mechanisms across its assistance portfolio" - payments "made to achieve results against established targets where the amount of the payment reflects the value of the outcome to the Department, not based on actual or estimated costs", which is the direct opposite of cost reimbursement. It is a stated plan with no funding level set aside and suitability judged award by award, so nothing has yet been eliminated. USAID's own contracts ended with the agency on 2025-07-01; cost-reimbursement contracting remains available across the government, and the four Revolutionary Federal Acquisition Regulation Overhaul proposed rules published on 2026-06-23 rewrite FAR Parts 1-7, 10, 18, 24, 26, 29, 33, 37, 39-41, 49 and 53 but do not touch Part 16, where contract types live.
- Report to Congress on the Department of State's Plans to Implement Pilot Programs, Particularly with Respect to Global Health and Food Security - performance-based payments
- Marco Rubio, "Making Foreign Aid Great Again" (State Department Spanish text): from 1 July 2025 USAID officially ceases to implement foreign assistance, which passes to the Department of State
Research log
What was searched, and what didn’t count as evidence
Research notes
- Executive Order 14275, Restoring Common Sense to Federal Procurement (2025-04-15, https://www.federalregister.gov/documents/2025/04/18/2025-06839/restoring-common-sense-to-federal-procurement) launched the FAR overhaul. It is the upstream instrument but says nothing about contract types, so it is recorded here as context rather than as Evidence for this ask.
- Federal Register full text “cost-plus” over the window returns 27 documents, all securities-exchange fee filings, FERC collections and a DFARS threshold adjustment - none about foreign assistance.
Researched 2026-08-28.
- Action
- eliminate
- Object
- Cost-plus reimbursement contracts
- ID
- 688