We Should Celebrate Geographic Codes 935 and 937 in USAID Procurement

Published on: Jan 27 2012 by Wayan Vota

When working with USAID funding, the purchase of ICT can be a little complicated. USAID would always ask for the source, origin and nationality of all equipment. That is where the equipment was manufactured, where it was purchased, and the nationality of the companies involved.

The expectation was that all three would be from a set of limited countries specified in the implementing agreement via a geographic code. Geographic code 000 was the most restrictive – United States only – and a huge headache for any implementer.

Instead of buying computers, printers, etc from the local ICT company, USAID funded programs had to import all that equipment from the geographic code countries. Often even then asking for a waiver because as Apple demonstrates, S/O/N is a joke when it comes to modern computing technology. Almost all technology is made outside the USA, from a global supplier base, sold by multinational companies with only the vaguest sense of nationality, and often available in-country at competitive prices. Or as USAID itself says:

Because of the end of the Cold War and the subsequent globalization of the economy, this approach has become increasingly difficult to administer and, in some respects, obsolete. The costs of compliance with the complex regulation, and of the self-imposed and unnecessary restrictions on procurement in recipient and developing countries means that the foreign assistance dollar does not go as far as it would with a more straightforward regulation that reflects the statutory authority to procure in the recipient country and other developing countries, in addition to the U.S.

What’s even more interesting, is that USAID didn’t have to follow this rule – it was a self-imposed relic of the Cold War never updated even though Congress gave it the authority to do so in 1993. Well, finally, USAID has re-written the S/O/N regulation, and we should all cheer. With this Final Rule determination, we are free of restrictive geographic codes come February 7. Just read the detail from USAID itself:

(a) USAID has established principal geographic codes which are used by USAID in implementing instruments. This regulation establishes a presumptive authorized principal geographic code, Code 937, for procurement of commodities and services unless otherwise specified in the implementing instrument. Code 937 is defined as the United States, the cooperating/recipient country, and developing countries other than advanced developing countries, and excluding prohibited sources. USAID maintains a list of developing countries, advanced developing countries, and prohibited sources, which will be available in USAID’s Automated Directives System, ADS 310.

(b) For purposes of procurements under the authority of the Development Fund for Africa, 22 U.S.C. 2293 et seq.; for any waivers authorized under Subpart D of this regulation; and if otherwise designated in an implementing instrument, the authorized principal geographic code shall be Code 935, any area or country but excluding prohibited sources.

What does all that mean? By default, we are hereby free to buy from you and me, Africa or America, based on the qualities of the technology, not where it was made or who sold it to us.

Wayan Vota works at FHI 360 and is a regular contributor to ICTworks. He started ICTworks, Technology Salon, Educational Technology Debate, OLPC News, Kurante, and a few other things.
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One Comment to “We Should Celebrate Geographic Codes 935 and 937 in USAID Procurement”

  1. Wayan Vota says:

    In reading USAID Mozambique’s EGRA+QIM project SOL 656-12-000001, Amendment 01 Attachment 01: Questions and Answers, I think there is some confusion around what the “new” geographic code 935 really means. Here is a proposer’s question and USAID Mozambique’s response:

    Q18: On pg. 107, under “Equipment,” USAID states, “specify all equipment to be purchased, including the type of equipment, the manufacturer, the unit cost, the number of units to be purchased and the expected geographic source. Goods and services provided by the Contractor under this USAID-financed award are expected to be subject to the 935 Geographic Code (United States).” Please clarify whether the offeror is expected to know and state the manufacturer of proposed equipment in the cost proposal or whether this will occur after award.

    A18: The offeror is not expected to provide information on the origin, just the source and nationality per the new Source and Nationality Guidelines (February 6, 2012).

    Note that in the original RFP, they seemingly thought 935 meant only the USA. The February 6 revision to the ADS Chapter 310 Source and Nationality Requirements for Procurement of Commodities and Services Financed by USAID clearly states that 935 is greater than that:

    Code 935 (any area or country including the recipient country, but excluding any country that is a prohibited source) is the authorized USAID Principal Geographic Code for procurement of commodities and services:

    Here is the full revised chapter: http://www.usaid.gov/policy/ads/300/310.pdf

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