Contractors owed tens of millions by USAID are warning of potential shutdowns and lawsuits globally, with one major firm stating that US banks are hesitant to lend due to concerns over the government’s commitment to funding. These claims, which include threats of physical harm to overseas staff due to unpaid debts, were detailed in recent court filings related to efforts to reverse the Trump administration’s 90-day freeze on foreign aid, which has disrupted the global aid sector. This case is part of a legal response to the administration’s broader impact on the federal workforce, particularly affecting the United States Agency for International Development (USAID) and its implementing partners.
On Tuesday, a judge ordered the US government to settle its debts by midnight Wednesday, a ruling that the government appealed shortly after. Plaintiffs have accused the Trump administration of disregarding court orders. In 2023, USAID managed approximately $43 billion, primarily through contractors executing projects worldwide, with some firms handling hundreds of millions in development projects annually, often at slim margins.
DAI Global LLC, based in Bethesda, Maryland, reported it has not received payments on $115 million owed by USAID, with $70 million overdue by at least 30 days. The firm, which has historically secured favorable loan terms due to its relationship with the US government, now finds that “four of the largest financial institutions in the US and Europe” are unwilling to provide further working capital, citing a loss of confidence in the government’s ability to meet its financial obligations. As a result, DAI has turned to a non-bank lender specializing in distressed situations. An executive from DAI described the situation as “absolutely unprecedented,” highlighting a significant decline in lenders’ confidence in the US government as a reliable client.
