Direct Contracting by the Agency for International Development Can Be Better Managed

NSIAD-84-108: Published: Jul 9, 1984. Publicly Released: Jul 9, 1984.

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In response to a congressional request, GAO examined certain aspects of the Agency for International Development's (AID) management of direct contracting, including: (1) the extent of competition; (2) the adequacy and clarity of scopes of work issued by AID; (3) the extent to which overhead rates and other indirect costs are validated and efforts made to minimize them; (4) the extent to which the numbers and technical proficiency of contractor personnel and associated costs are held at the minimum levels necessary; and (5) the adequacy of AID monitoring and reporting of contractor progress.

For fiscal year 1982, AID reported $16.8 million in noncompetitive contract awards exceeding $100,000, not including amendments to existing contracts. GAO found that the total original awards increased by 61 percent through amendments. Amendments generally do not require competition; however, the circumstances that prompt the issuance of an amendment may provide an opportunity for competitive procurement instead. GAO also found that the statements of work in 21 of 37 active contracts were vague, which delayed contract implementation and caused poor accountability. GAO review of selected audits of overhead costs in AID direct contracts indicated that overhead rates were being validated regularly and total questioned costs were not unreasonably high. GAO found that key personnel, promised at the time contracts were awarded, were not available for contract performance, which also resulted in project delays and other detrimental effects. Finally, most contracts which GAO reviewed lacked performance indicators, and contractor progress reports tended to be generalized descriptions of project activities rather than assessments of actual versus planned performance.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: AID had previously increased its staff for competition advocacy functions and established a database for contract amendments. In its January 1988 report on competition for fiscal year (FY) 1987, AID reported that it performed a limited analysis of contracting data to identify trends in competitive procurement actions. A more complete analysis of data will be initiated in FY 1988.

    Recommendation: The Administrator, AID, should take action to better quantify, report, and monitor the amount of, and reasons for, amendments and other noncompetitive actions. Actions should include: (1) using computer capabilities to better quantify competitive and noncompetitive procurement actions by bureaus, missions, and offices; (2) using the information so developed to identify trends and monitor changes in competitive and noncompetitive performance and establish goals for improving competitiveness in AID contracting; (3) identifying the factors that contribute to noncompetition, such as inadequate lead time; (4) formulating actions to increase competition, such as requiring project officers to plan adequate time for competition during project design; and (5) implementing and modifying personnel performance standards of project and contracting officers to reduce or eliminate pressures that lead to noncompetitive procurements.

    Agency Affected: United States Agency for International Development

  2. Status: Closed - Implemented

    Comments: AID issued its self-study course, which is intended to aid nonprocurement personnel to learn about the contracting process and determine when it might be appropriate to seek assistance from contracting professionals. The course has been distributed to most overseas missions.

    Recommendation: The Administrator, AID, should: (1) develop and issue specific guidance on essential elements of adequate statements of work; (2) place greater emphasis on how to prepare scopes during training for project officers and others who prepare and negotiate contracts and monitor contractor performance; and (3) improve the availability of technical assistance, in-house or through qualified contractors, and leadtime to permit the design of well defined scopes.

    Agency Affected: United States Agency for International Development

 

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