Tetra Tech, the global consulting and engineering firm, has laid off dozens of workers in Ukraine and faces tens of millions of dollars in costs locally due to the USAID cuts, including a payment freeze on work completed, sources familiar with the matter told Ukraine Rebuild Newswire.
The company is one of the largest US implementing partners, or prime contractors, in Ukraine, along with competitors such as DAI Global and AECOM. They now fear further losses of key staff every day the USAID pause continues, even as the Western world contemplates a historic reconstruction project that the World Bank estimates will cost $524 billion.
Most of the more than 300 Tetra Tech employees in Ukraine face the prospect of redundancy unless other donors quickly replace missing US funding. Around 50 have already been laid off, said one source, and the company is sitting on expensive equipment it has bought specifically to carry out contracts in Ukraine that may never be delivered to the partner organisations.
Tetra Tech now has "a short window of time where it has a large number of under-utilised, experienced engineers and analysts available to lead projects from alternative donors," one source said. "If donor nations are slow to move and don’t take advantage of this capacity then we may see our highly valued staff either leaving the country or being mobilized into the Ukrainian army."
'The reconstruction hasn't even started yet'
US contractors are now looking to the European Union and other major donor nations, such as the UK, Sweden and Japan for contracts to carry out some of their unfinished work in Ukraine.
"Our people and the people of Ukraine depend on it," said an employee of one of the prime contractors. "The cold season is not over. The fighting is not over. The reconstruction hasn't even really started, and our margins are thin. Profits are not the core motive for our work – we are mainly Ukrainians working for the good of our country.”
The USAID contracts were frozen in January when the newly installed Trump administration ordered a 90-day review of US foreign aid contracts, including hundreds of millions of dollars to shore up Ukraine's energy security, modernize its border control posts, overhaul water supply systems, reinforce infrastructure against Russian attacks and more.
Unpaid since November
Aggravating the situation, due to the state of billing cycles at the time of the freeze order, prime contractors haven't been paid even for work completed in November, December and January, calling their financial viability into question. They, in turn, they haven't been able to pay their numerous smaller subcontractors, as Ukraine Rebuild Newswire reported last month, leaving many more companies at risk.
"Contractors have been paralyzed," one source familiar with the contracting scene in Ukraine told Ukraine Rebuild Newswire. "They can't proceed with carrying out new work until they get paid for work done on previous projects."
Last week the US Supreme Court ruled in favor of the federal judge who ordered all outstanding payments to USAID contractors to be disbursed as part of a temporary restraining order to prevent further harms to the plaintiffs in the ongoing legal cases. Some payments have begun to trickle through but Ukraine Rebuild Newswire was told the lack of qualified staff remaining at USAID means it could take weeks before all due invoices are honored.
US Secretary of State Marco Rubio wrote on the social media platform X earlier this week that the Trump administration has now cancelled 83% of US foreign aid contracts, scrapping tens of billions of dollars in planned spending.
After a 6 week review we are officially cancelling 83% of the programs at USAID.
— Marco Rubio (@marcorubio) March 10, 2025
The 5200 contracts that are now cancelled spent tens of billions of dollars in ways that did not serve, (and in some cases even harmed), the core national interests of the United States.
In…
One of the 5,200 contracts terminated, according to a list leaked to Washington-based Punchbowl News, is the $920 million program, which has been largely completed, to shore up energy security in Ukraine managed by Tetra Tech and several dozen smaller contracts in the country.
The legality of the move remains in dispute. But, as one source told Ukraine Rebuild Newswire, some of the prime contractors are afraid to sue the US government, the source of most of their revenue, fearing it could jeopardize existing or future contracts with other federal government agencies.
In the meantime, construction sites remain idle, key equipment goes undelivered and purpose-bought machinery lies unused.
"Many of our activities and tenders for equipment have been cut short," one source said. "This means a wide range of equipment for Ukraine is in some cases, is just sitting in warehouses, undelivered."
"It's a mess," the source said, calling on the Trump administration to "at least rescind the stop work orders for critical programs in Ukraine that have survived State Department’s extreme and flawed review process."
