USAID Eligibility Rules

USAID imposes some interesting geographic restrictions on procurement of goods and services with their funding. The information on this page is about those restrictions.

But there are other (universal) geographic (and political) restrictions that you must keep in mind, regardless of your funder:

  • OFAC sanctioned countries - All US persons (including organizations) are required to comply with OFAC's Sanctions Programs, which strictly limit commerce with certain countries (see OFAC's page on its Santions Programs); and
  • OFAC sanctioned individuals/groups - All US persons (including organizations) are prohibited from dealing with Specially Designated Nationals and Blocked Persons, previously referred to as "identified terrorists and/or terrorist supporters", see OFAC's website and DOS's page on E.O. 13224; and
  • OMB's list of suspended/debarred parties - All recipients of federal awards are prohibited from engaging in transactions with parties who are suspended or debarred from receiving federal awards (see About 2 CFR 180).

And never forget that certain procurements require prior funder approval in order to be allowable (see Allowable Costs & Prior Approvals) — but that's not a geographic restriction.


USAID's geographic restrictions

USAID has special rules further restricting the procurement of goods and services when using USAID funds. These are codified at 22 CFR 228. See About 22 CFR 228.

Before continuing on this page, you might want to open a copy of the regulation. Try one of these sources:

And you'll want to access USAID's US-Standard Provision M8 USAID ELIGIBILITY RULES FOR GOODS AND SERVICES (MAY 2020) or USAID's non-US SP M6 (same title, same text as the US version), along with USAID's Certifications and Assurances, which has some language in Part IV, item 5(b) on complying with the USAID source restrictions.


What you need to know

The regulation/SP combination is about what's eligible for purchase with award funds. Together, the reg and SP identify three basic classes of commodities and services according to whether and how you can buy them with award funds:

  • Stuff you can't buy under any circumstances
    • Ineligible commodities (prohibited goods) detailed at paragraph b.(1) of the SP (either version);
    • Ineligible suppliers (prohibited sources) - goods or services supplied by an ineligible supplier (from a prohibited country, suspended, debarred, or appearing on one of the terrorist lists — more about prohibited countries below).
  • Mandatory US source/origin - stuff you can buy only of US manufacture and/or from a US supplier, with some opportunity for waiver of this restriction, see below (§ 228.19)
    • certain agricultural commodities (§ 228.19(a));
    • motor vehicles, including long-term lease of motor vehicles (§ 228.19(b) and § 228.01 definition of long-term lease); and
    • certain pharmaceuticals (§ 228.19(c)).
  • Everything else: but you must buy it in conformance with USAID's geographic restrictions, which are discussed below.

But also note that you can't buy from foreign government-controlled entities, except as specifically allowed by USAID on a case-by-case basis. (§ 228.13)

AND

Construction and related services have special restrictions/requirements that you need to pay attention to.

USAID Geographic Restrictions

In order to be allowable costs to a USAID award:

  • goods must be sourced from USAID's Geographic Code 937 (with some key exceptions) — see more below (§ 228.11); and
  • suppliers of goods and/or services must be citizens or legal residents of or legally organized in a country in Geographic Code 937 (with the same exceptions as above, described below) (§ 228.12).

USAID Geographic Codes

Code 937 is the default code. Countries in Code 937 are identified at § 228.03(a) and two lists published as references to ADS 310.

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