Foreign Assistance:

AID's Use of Personal Services Contracts Overseas

NSIAD-91-237: Published: Sep 13, 1991. Publicly Released: Oct 17, 1991.

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Pursuant to a congressional request, GAO examined the Agency for International Development's (AID) use of personal services contractors in carrying out its programs overseas, focusing on whether: (1) services and functions performed under personal services contracts (PSC) are appropriate; (2) AID discloses its use of PSC in budgetary and services reporting; and (3) AID ensures that personal services contractors do not have conflicts of interest.

GAO found that: (1) personal services contractors provided advice on program policy, assisted missions and host government institutions in financial and management operations, designed and implemented development projects, and provided specialized skills in various sectors; (2) although AID requires that personal services contractors be adequately supervised, it has not defined adequate supervision; (3) PSC files and interviews with contractors and their supervisors disclosed no instances where the contractors performed restricted functions; (4) although AID provides contract and consultant service data to Congress through the annual budget reporting process, AID is not required to and does not separately disclose in its congressional budget presentations the number and value of PSC or the types of services provided; (5) since AID does not define the circumstances under which personal services contractors should be considered consultants, AID consultant services reporting is inconsistent and not adequately supported; (6) although federal regulations do not provide specific conflict-of-interest guidance for personal services contractors, AID regulations subject them to the same requirements that apply to AID employees; and (7) AID contracting officers were responsible for ensuring that personal services contractors met such standards and did not have conflicts of interest, but AID officials were generally unaware of the requirement and it was not being enforced.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On October 27, 1992, the Associate Administrator for Finance and Administration (AA/FA) issued a general notice to contracting officers and project officers that addresses the supervision requirements for U.S. personal services contractors.

    Recommendation: To help ensure that personal services contractors do not perform prohibited activities and are subject to adequate supervision and control of their employees, the Administrator, AID, should provide guidance on the requirements for supervising personal services contractors.

    Agency Affected: United States Agency for International Development

  2. Status: Closed - Implemented

    Comments: AID obtained data from field offices on the number and cost of using personal services contractors and planned to disclose this information in its fiscal year 1994 congressional presentation. However, issuance of the budget document has been delayed because of a change in administration and uncertainty regarding funding.

    Recommendation: The Administrator, AID, should separately disclose in AID budget presentations to Congress its use of personal services contractors in support of overseas mission management and program activities.

    Agency Affected: United States Agency for International Development

  3. Status: Closed - Implemented

    Comments: AID has issued Contract Information Bulletin (CIB) 92-6, dated March 18, 1992, and a supplement, dated April 22, 1992, which address the GAO recommendation.

    Recommendation: The Administrator, AID, should clarify in what circumstances personal services contractors should be considered consultants.

    Agency Affected: United States Agency for International Development

  4. Status: Closed - Implemented

    Comments: Amended procurement regulations are being drafted that include provisions that seek to ensure that contracting officers meet agency requirements for identifying and resolving contractor conflicts of interest, and ensure that personal services contractors make financial and post-employment disclosures.

    Recommendation: The Administrator, AID, should require contracting officers to enforce agency regulations designed to ensure that: (1) apparent conflicts of interest involving personal services contractors, including any conflicts on active contracts, are identified and resolved; and (2) financial and post-employment disclosures are made.

    Agency Affected: United States Agency for International Development

 

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