I 118th CONGRESS 1st Session H. R. 2824 IN THE HOUSE OF REPRESENTATIVES April 25, 2023 Mr. Castro of Texas (for himself and Mrs. Kim of California ) introduced the following bill; which was referred to the Committee on Foreign Affairs A BILL To support prioritization and expanded use of innovation at the United States Agency for International Development, and for other purposes.

1. Short title and table of contents (a) Short title This Act may be cited as the Fostering Innovation in Global Development Assistance Act of 2023 or the FIGDA Act of 2023 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title and table of contents. Sec. 2. Findings. Sec. 3. Sense of Congress. Sec. 4. Chief Innovation Officer. Sec. 5. Authorities to support expanded use of innovation. Sec. 6. Development Innovation Ventures program. Sec. 7. Proven Solutions program. Sec. 8. Increase in fixed amount subawards. Sec. 9. Authorization for United States participation in the Global Innovation Fund. Sec. 10. Collaboration with United States International Development Finance Corporation. Sec. 11. Global innovation strategy. Sec. 12. Limitations. Sec. 13. Definitions. 2. Findings Congress finds the following: (1) The effectiveness of United States foreign assistance can be greatly enhanced by fostering innovation, applying research and technology, and leveraging the expertise and resources of the private sector to find cost-effective solutions to today’s most pressing development challenges. (2) Partnerships with entrepreneurs, experts, nongovernmental organizations, universities, and science and research institutions allow the United States to find solutions to specific development challenges in a faster, more cost-effective, and more financially sustainable way. (3) Enhancing the authorities that support results-based and pay-for-success innovation models will better enable USAID to diversify and expand both the number and sources of proven solutions that may be developed, tested, and scaled up, thereby increasing USAID’s opportunity to apply high value, cost-effective solutions to global development challenges. (4) As demonstrated by USAID’s Development Innovation Ventures program, innovation within United States foreign assistance can generate high social returns when it is centered on the creation of and reliance on rigorous evidence of impact on global development outcomes, a focus on cost-effectiveness, and attention to financially-sustainable proven solutions that may be scaled up. (5) USAID’s Center for Innovation and Impact serves as an important effort to incubate new proven solutions, put them into practice, and scale up effective approaches by drawing on non-traditional skill sets in innovation, market-based solutions and digital health. (6) USAID’s efforts to incorporate lessons learned into future programs should be open to both building on successful approaches and learning from failures. (7) Enabling uptake of evidence-based innovation across USAID’s operating units will enable USAID to scale up proven solutions that accelerate economic growth and produce better development outcomes, which can help support the growth of healthier, more stable societies and foster trade relationships that translate into jobs and economic growth in the United States. 3. Sense of Congress It is the sense of Congress that innovation is central to identifying solutions to global development challenges. 4. Chief Innovation Officer (a) In general There shall be established within USAID a Chief Innovation Officer who shall— (1) serve as the principal advisor on issues related to the prioritization and expanded use of innovation to improve the effectiveness and outcomes of the development and humanitarian goals of the United States, including related to policy, management, and procurement; (2) (A) carry out— (i) the duties described in subsection (b); (ii) the authorities described in section 5; and (iii) the Proven Solutions program under section 7; and (B) develop the strategy required by section 11(a); and (3) report directly to— (A) the Deputy Administrator for Policy and Programming of USAID; or (B) such other senior official of USAID, as determined by the Administrator. (b) Duties The duties of the Chief Innovation Officer shall include— (1) increasing the application of innovation to develop, test, and scale up proven solutions to improve effectiveness and outcomes of development and humanitarian goals of the United States; (2) leveraging the innovations, expertise, resources, and investments of businesses, nongovernmental organizations, science and research organizations, United States Government organizations that pursue science, technology, and research, and universities for the purposes of improving effectiveness and outcomes of development and humanitarian assistance efforts of the United States, and serving as a liaison between USAID and such partners to ensure USAID is meaningfully engaging with such partners; (3) utilizing innovation-driven competitions, advanced market commitments, and co-creation arrangements to expand the number and diversity of solutions to development and humanitarian challenges and the partners with whom USAID works and funds; (4) maintaining a repository of innovative solutions and best practices to be shared across USAID and fostering a culture of innovation across USAID; (5) convening and coordinating innovation units, divisions, and programs to ensure knowledge around innovative solutions and best practices are shared and implemented across USAID; (6) supporting USAID operating units in applying findings from development economics and research, technology, innovation, co-creation, and partnership approaches to decision making, procurement, and program design; (7) examining and providing input into current internal USAID policy related to management and procurement to ensure innovation is integrated in policy guidance and procurement mechanisms; (8) ensuring proper utilization of the authorities relating to grants, contracts, challenges, and prize awards, including Innovation Incentive Awards under section 5(a) and the authority relating to Innovation Fellows under section 5(b); and (9) conduct rigorous evaluation of new mechanisms, approaches, and technologies to ensure that innovation drives learning and impact. (c) Bureau senior advisors (1) In general The Administrator shall appoint in each bureau of USAID, from among officers and employees of such bureau, a senior advisor with respect to matters relating to innovation, to— (A) serve as the principal advisor for such bureau on such matters; and (B) coordinate with the Chief Innovation Officer the activities of such bureau on such matters. (2) Continuation of service An individual appointed to serve as a senior advisor pursuant to paragraph (1) may continue to serve concurrently in the individual’s original position in such bureau. 5. Authorities to support expanded use of innovation (a) Innovation authorities (1) In general The Administrator, acting through the Chief Innovation Officer, is authorized, pursuant to the authorities described in section 635 of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2395 ), to provide flexible, results- and milestones-based funding to support expanded use of innovation, encourage improved development and humanitarian outcomes, expand USAID partner bases, and support cost-effective and sustainable-led development solutions in partnership with local and nontraditional development partners, including the private sector. (2) Types of funding The Administrator may provide funding authorized under paragraph (1) in the form of grants (including fixed amount awards), contracts (including firm-fixed price contracts), advanced market commitments, development impact bonds, performance-based contracts, conditional cash transfers, and prize awards, including— (A) Innovation Incentive Awards; and (B) evidence-driven, tiered awards under the Development Innovation Ventures program established under section 6. (3) Recovery of funds (A) Authority (i) In general The Administrator, subject to the limitation described in clause (ii), is authorized to provide funds under a grant, contract, advanced market commitment, development impact bond, performance-based contract, conditional cash transfer, or prize award under this subsection to a recipient under terms requiring a proportion of such funds be returned to USAID at a future date in accordance with such requirements as may be established by the Administrator. (ii) Limitation The amount of funds that a recipient is required to return to USAID under clause (i) may not exceed the total amount of funds that the recipient receives under the grant, contract, advanced market commitment, development impact bond, performance-based contract, conditional cash transfer, or prize award. (B) Treatment of payments (i) In general The amount of funds returned to USAID under subparagraph (A) may be credited to the account from which the obligation and expenditure of funds under the grant, contract, advanced market commitment, development impact bond, performance-based contract, conditional cash transfer, or prize award under this subsection were made. (ii) Availability Amounts returned and credited to an account under clause (i)— (I) shall be merged with other funds in the account; and (II) shall be available, subject to appropriation, for the same purposes and period of time for which other funds in the account are available for programs and activities of the Chief Innovation Officer under section 4(b). (b) Innovation Fellows (1) In general The Administrator, acting through the Chief Innovation Officer, is authorized to employ individuals, to be known as Innovation Fellows , at any given time who shall, following an initial period of service with the Chief Innovation Officer, be assigned on a detail basis to USAID operating units for purposes of expanding the use of innovation, technology, and research with respect to the development assistance authorities of USAID. (2) Administrative provisions The authority to employ individuals under paragraph (1) is in addition to the authority to employ individuals under such other authorities as may be available to the Administrator, including authorities under parts I and II of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2151 et seq. ). (3) Limitation The employment of individuals under paragraph (1) shall be a limited-term basis pursuant to schedule A of subpart C of part 213 of title 5, Code of Federal Regulations, or similar laws or regulations. (c) Authorization of appropriations (1) In general There is authorized to be appropriated to carry out this section not less than $45,000,000 for each of the fiscal years 2024 through 2028. Such amounts are in addition to amounts otherwise available to USAID to carry out authorities to support expanded innovation and other activities of the type as described in this section. (2) Availability Amounts authorized to be appropriated to carry out this section are authorized to remain available until expended. (3) Additional funding Amounts authorized to be appropriated under part III of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2351 et seq. ) for each of the fiscal years 2024 through 2028 are authorized to be made available to carry out subsection (b). Such amounts are in addition to amounts authorized to be appropriated under paragraph (1) to carry out this section. 6. Development Innovation Ventures program (a) In general There is established in USAID a program to be known as the Development Innovation Ventures program (in this subsection referred to as the program ). (b) Duties In carrying out the program, the Administrator shall provide flexible funding to global innovators to test new ideas, build evidence of what works to improve development outcomes, and transition to scale up those proven solutions with rigorously demonstrated potential to improve millions of lives on a cost-effective basis. (c) Applications In carrying out the program, the Administrator shall assess applications for funding under this subsection according to the following three core principles: (1) Rigorous evidence of impact. (2) Cost-effectiveness. (3) Potential for scaling up proven solutions. (d) Administrative provisions In carrying out the program, the Administrator shall— (1) provide funding under this subsection using tiered, evidence-driven funding to allow for risk-taking at early stages while mitigating risk at later stages, thereby maximizing impact per tax dollar spent; and (2) work across all countries and sectors supported by USAID, with the goal of finding, testing, and scaling up proven solutions. (e) Reporting requirement Not later than 60 days after the date of the enactment of this Act, the Administrator shall submit to the appropriate congressional committees and make available to the public a report on the implementation of the program that includes— (1) an assessment from USAID of the extent to which proven solutions have been scaled up, inside and outside of USAID; and (2) a description of USAID’s decision-making process, including with respect to use of funding received from external sources. (f) Authorization of appropriations (1) In general Amounts authorized to be appropriated under section 5 are authorized to be made available to carry out this section. (2) Availability Amounts made available to carry out this section are authorized to remain available until expended. 7. Proven Solutions program (a) In general There is established in USAID a program to be known as the Proven Solutions program (in this subsection referred to as the program ). The Administrator, acting through the Chief Innovation Officer and in consultation with the Chief Economist of USAID, shall carry out the program. (b) Duties (1) In general In carrying out the program, the Administrator shall scale up proven solutions by directing USAID operating units to integrate proven solutions into USAID programming and operating budgets, including by utilizing other authorities described in this Act. (2) Public report Not later than 60 days after the end of each of the fiscal years 2024 through 2028, the Administrator shall submit to the appropriate congressional committees and the public a report on all proven solutions and USAID operating units involved in the activities described in paragraph (1) for the prior fiscal year. (c) Coordination Each USAID operating unit that manages more than $50,000,000 of assistance each fiscal year shall— (1) review the proven solutions identified by the program; and (2) submit to the Chief Innovation Officer and the Chief Economist of USAID— (A) a list of proven solutions that can be supported by the unit; (B) an assessment of potential impact of such proven solutions; (C) an assessment of available funding to scale up proven solutions; and (D) any other information requested by the Chief Innovation Officer and the Chief Economist to inform opportunities to scale up proven solutions. (d) Definition In this subsection, the term “proven solutions”— (1) means innovations that are rigorously demonstrated, such as through randomized controlled trials, commercial viability, or other appropriate methods, to have the potential to substantially improve development outcomes; and (2) includes— (A) innovations developed or supported by USAID, including the Development Innovation Ventures program established under section 6, Innovation Challenges and Prizes, and innovations developed or supported by other government entities, including the United States International Development Finance Corporation; and (B) innovations developed by USAID partners, including nongovernmental organizations, social enterprises, foreign governments, and multilateral institutions. (e) Authorization of appropriations (1) In general Amounts authorized to be appropriated under chapters 1 and 10 of part I of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2151 et seq. and 2293 et seq.), chapter 4 of part II of such Act ( 22 U.S.C. 2346 et seq. ), and title II of the BUILD Act of 2018 ( 22 U.S.C. 9601 et seq. ) are authorized to be made available to carry out this section. (2) Availability Amounts authorized to be appropriated to carry out this section are authorized to remain available until expended. 8. Increase in fixed amount subawards (a) In general The Administrator is authorized to permit contractors to issue fixed amount subawards in excess of the monetary cap provided for in section 200.333 of title 2, Code of Federal Regulations (or any successor regulations), but not to exceed $1,000,000, in a manner consistent with appropriate safeguards. (b) Notification The Administrator shall notify the appropriate congressional committees prior to any exercise of the authority of this section. 9. Authorization for United States participation in the Global Innovation Fund (a) In general The United States is hereby authorized to participate in the Global Innovation Fund. (b) Board of directors The Administrator is authorized to designate an employee of USAID to serve on the Board of the Global Innovation Fund as a representative of the United States. (c) United states contributions Amounts authorized to be appropriated under chapters 1 and 10 of part I of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2151 et seq. and 2293 et seq.), chapter 4 of part II of such Act ( 22 U.S.C. 2346 et seq. ), and title II of the BUILD Act of 2018 ( 22 U.S.C. 9601 et seq. ) are authorized to be made available for United States contributions to the Global Innovation Fund. 10. Collaboration with United States International Development Finance Corporation The Administrator is authorized to enter into agreements with the Chief Executive Officer of the United States International Development Finance Corporation to carry out joint innovation projects, including through grants, contracts, and prize awards, including Innovation Incentive Awards authorized under section 5(a), and private sector-led development, through the use of blended finance, fixed payment rates for desired outcomes, and other mechanisms, as authorized by law. 11. Global innovation strategy (a) In general Not later than 1 year after the date of the enactment of this Act, the Administrator, acting through the Chief Innovation Officer, shall submit to the appropriate congressional committees and make available to the public a 5-year strategy for the purposes of prioritizing and expanding the use of innovation in international development and humanitarian programs that— (1) establishes an innovation coordination plan across USAID operating units that includes the resources, training, and staffing needs to exercise the authorities described in sections 5, 6, and 7; (2) discusses ongoing and planned reforms to formal and informal incentives of USAID operating units and staff to mainstream and document their use of evidence and cost-effectiveness in strategic and programming decisions, and how these reforms will encourage the adoption and scaling up of proven solutions across USAID; (3) outlines efforts to integrate innovation objectives, including by using resources of USAID operating units to scale up proven solutions, the use of grants, contracts, advanced market commitments, and prize awards described in section 5 into USAID acquisition and assistance mechanisms and into country and regional strategies; (4) provides budgetary recommendations for scaling up proven solutions in future fiscal years; (5) outlines external efforts to improve partnership and collaboration with relevant businesses, nongovernmental organizations, science and research organizations, United States Government organizations that pursue science, technology, and research, universities engaged with innovation applicable to the core work and mandate of USAID, partner governments, and multilateral institutions; (6) identifies USAID’s approach to managing the goals of expanded innovation with ensuring rigorous oversight of Federal funds and plans to conduct monitoring and evaluation of all activities conducted pursuant to this Act; (7) outlines, in coordination with the Chief Executive Officer of the United States International Development Finance Corporation, a joint investment plan between USAID and the United States International Development Finance Corporation to exercise the authorities described in sections 5, 6, and 7; (8) outlines steps the Administrator will take to evaluate investments made by the United States International Development Finance Corporation and prioritize future funding for scaling up proven solutions from the United States International Development Finance Corporation; and (9) includes any other matters determined by the Administrator to be appropriate. (b) Country and regional strategies The Administrator shall require— (1) each newly-issued USAID Country Development Cooperation Strategy, USAID Regional Development Cooperation Strategy, or other USAID planning document, as determined by the Administrator, to include a plan of action to promote innovative development practices, as described in the strategy required by subsection (a); and (2) each USAID Country Development Cooperation Strategy, USAID Regional Development Cooperation Strategy, or other USAID planning document, in effect as of the date of the enactment of this Act, to be updated in order to meet the requirements of the strategy required by subsection (a). 12. Limitations Concurrent with the submission of the Congressional Budget Justification for Foreign Operations for each fiscal year, the Administrator shall submit to the appropriate congressional committees a detailed accounting of USAID’s use of the authorities under this Act, including the sources, amounts, and uses of funding for each such authority. 13. Definitions In this Act: (1) Administrator The term Administrator means the Administrator of USAID. (2) Appropriate congressional committees The term appropriate congressional committees means— (A) the Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives; and (B) the Committee on Foreign Relations and the Committee on Appropriations of the Senate. (3) Chief Innovation Officer The term Chief Innovation Officer means the Chief Innovation Officer established by section 4(a). (4) Cost-effective; cost-effectiveness The terms cost-effective and cost-effectiveness , with respect to a process, technology, policy, or service, means the process, technology, policy, or service produces more impact, such as in terms of benefit or value, for the same cost or produces the same impact for a lower cost as compared to another process, technology, policy, or service. (5) Innovation The term innovation means the development and implementation of new processes, technologies, policies, or services that provide a greater impact or are more cost-effective than current practice. (6) Innovation Incentive Award The term Innovation Incentive Award means an award provided under section 5(a) under which funding is provided on a competitive basis that— (A) encourages and rewards the development of solutions for a particular, well-defined problem relating to the alleviation of poverty or other development priority; (B) helps identify and promote a broad range of ideas and practices, facilitating further development of an idea or practice by third parties, relating to the alleviation of poverty or other development priority; or (C) leverages new incentives for achieving a desired result, including establishing fixed payment rates for services, or outcomes, paid retroactively to a provider upon verification of the provision of service or the achievement of the desired outcome. (7) Scale up The term scale up , with respect to an innovation that is proven solution (as such term is defined in section 7(d)) to a development problem in one context, means the application of the innovation to a development problem in another context, such as a development problem in a different geographic region or sector. (8) USAID The term USAID means the United States Agency for International Development. (9) USAID operating unit The term USAID operating unit means a bureau, independent office, mission, or representative office of USAID.