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Eastern Europe: AID's Indefinite Contracts Assist Privatization Efforts but Lack Adequate Oversight

NSIAD-94-61 Published: Jan 19, 1994. Publicly Released: Feb 18, 1994.
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Highlights

Pursuant to a congressional request, GAO reviewed the Agency for International Development's (AID) use of indefinite quantity contracts (IQC) to provide technical assistance to Poland and the Czech and Slovak Republics, focusing on: (1) whether host governments are satisfied with IQC assistance; (2) how IQC assistance compares with other major donors' programs; (3) the role of host governments and contractors in the development and approval of project task proposals; and (4) AID oversight of IQC.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
U.S. Agency for International Development The Administrator, AID, should take actions to improve the implementation and oversight of IQC project activities. Specifically, the Administrator should delegate decisionmaking authority to field staff, as necessary, to improve the responsiveness of the privatization project.
Closed – Implemented
On August 23, 1995, the Bureau for Europe issued operating procedures on the Washington/field relationship. These procedures clarify and increase field responsibility and deal with the set of conditions needed to delegate further project design or implementation authority to field posts within the context of a field/Washington "team" concept.
U.S. Agency for International Development The Administrator, AID, should take actions to improve the implementation and oversight of IQC project activities. Specifically, the Administrator should direct contractors to provide host governments officials copies of their quarterly progress and financial reports, as well as delivery orders and invoices after deletion of any compensation rate information considered to be sensitive.
Closed – Implemented
Under AID procedures, all documents and deliverables needed for project monitoring are provided to the AID representative's office. However, not all documents go to the host institution. The AID representative is making the decision as to whether some documents are too sensitive or contain proprietary information and should not be forwarded to host institutions.
U.S. Agency for International Development The Administrator, AID, should take actions to improve the implementation and oversight of IQC project activities. Specifically, the Administrator should require contractors to develop implementation plans and provide them to AID and host government officials.
Closed – Implemented
The requirement for contractors to develop implementation plans is now formally included in the PIO/Ts and also in the delivery orders for contractors to show how they plan to implement the scope of work.
U.S. Agency for International Development The Administrator, AID, should take actions to improve the implementation and oversight of IQC project activities. Specifically, the Administrator should ensure that field staff receive the project documents they need for project monitoring, including progress and financial reports, delivery orders, implementation plans, and invoices.
Closed – Implemented
The contracting office now routinely distributes copies of delivery orders and contractors have been directed to distribute copies of the deliverables to AID/REP offices. Contractor invoices, once administratively approved by the project officers, are also being sent to AID/REP offices for use in project monitoring.
U.S. Agency for International Development The Administrator, AID, should take actions to improve the implementation and oversight of IQC project activities. Specifically, the Administrator should establish a record-keeping system to adequately document project activities.
Closed – Implemented
AID has implemented a manual document control and tracking system for all Eastern Europe IQC contracts. It has dropped plans to develop a computerized database for quick reference to contractor and administrative information.
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Topics

International Affairs
Conflict of interestsContract oversightContract performanceForeign economic assistanceForeign governmentsForeign technical aidStaff utilizationIndefinite delivery contractsInternational cooperationPrivatization