USAID leaves heavy lifting to contractors

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The U.S. Agency for International Development "has essentially become a government contracting agency" and relies on such private companies as DAI "to design and implement its largest and most complex projects," former DAI official George M. Guess said.

Lawyers for jailed development worker Alan Gross interviewed Guess as part of their $60 million lawsuit against DAI.

Guess, a senior public administration specialist at DAI from December 1993 to November 2004, said in a March 15 statement that USAID depended on private companies to carry out its projects:

This reliance includes the contractor's ideas, judgments and decisions on subcontracting and project details in-country. While those judgments and decisions are usually subject to oversight and final approval by USAID, it is typically the contractor's responsibility to initiate, manage, and execute them accordingly.Even more startling to me was this statement, from Guess:

USAID has little or no in-house capacity to design and implement the many different broad policy programs and objectives it is required to carry out.

USAID and the State Department have a combined budget of some $51.6 billion. This is a sprawling bureaucracy with billions of dollars and many thousands of employees, yet it evidently does not have in-house capacity to carry out all its projects.So it lets private enterprise - which is even more secretive than the government - manage these vital projects.

DAI comes out a winner. USAID set aside $324,519,704.62 for the company in fiscal 2012.

Guess, an adjunct professor at the American University School of Public Affairs, said in his statement that he was not involved in the Cuba project and did not know Gross.

He reviewed Gross's statements about DAI and USAID management and contract development practices and found them to be "fully consistent" with what he'd seen during 12 years at DAI and more than 35 years in the field of international development.

His statement said:

While employed at DAI, I served as specialist on approximately 25 international development contracts, both in-country and out of DAI's headquarters in Bethesda, Maryland.

In that capacity, I assembled teams and developed strategies to compete for contracts, developed and work plans and responses to USAID requests for proposals ("RFPs"), and then implemented those plans and proposals. In the field, I served as team leader on occasion, and also provided technical assistance and training to in-country participants, such as local governments, under DAl-developed work plans. Approximately one-half of the projects I worked on at DAI were sponsored or funded by USAID, with the remainder sponsored or funded by other bilateral, multilateral or non-governmental entities.

Specifically, Mr. Gross was correct in stating that, when issuing Requests for Proposal ("RFPs"), USAID typically attempts to define the agency's broad goals for the project in question, and substantially relies on contractors to develop detailed strategic and implementation plans, as well as specific recommendations for how best to achieve USAID's goals.

Indeed, the very reason that USAID hires contractors like DAI is because USAID has little or no in-house capacity to design and implement the many different broad policy programs and objectives it is required to carry out. Especially in the case of large or complex contracts, USAID typically relies heavily on its contractors' innovation, on-the-ground contacts, knowledge, staff expertise and experience in the relevant program areas. In order to win a Prime Contract and/or Task Order like those at issue in this litigation, DAI had to distinguish itself from its competitors (many of whom have resources and abilities comparable to that of DAI) by demonstrating superior expertise, creativity and capacity to achieve USAID's stated goals for the Cuba program.

In my twelve years of experience at DAI, it was certainly true that USAID had ultimate approval and oversight of projects developed and implemented by DAI.

Typically, USAID monitored the projects to ensure that DAI fulfilled all objectives and standards that DAI proposed in its work plan. For instance, USAID typically would require DAI to submit both progress reports and a "Project Completion Report" ("PCP") at the end of each project, which USAID would then use to evaluate DAI's performance. Disbursements had to be documented and reported to USAID in accordance with the contract and USAID rules. Payment by USAID was typically conditioned on delivering satisfactory evidence that the work plan was implemented and completed in accordance with the contract terms.

However, DAI was always responsible for implementation and day-to-day management of USAID projects for which it was contracted. In most cases, DAI was awarded a contract after demonstrating superior knowledge, expertise and creativity in a competitive bidding process; in some cases, DAI was awarded contracts on a "no-bid" basis (in accordance with USAID rules and regulations) due to its unique expertise or demonstrated capacity to achieve specific goals within a given period, which could be quarterly and/or annually. In virtually all cases, USAID looked to DAI for ideas and recommendations on how different projects could be designed and implemented to achieve the broad program goals set by USAID.

It is important to understand that over time, USAID has essentially become a government contracting agency. Today there is a large pool of private contractors that design and implement development projects on behalf of the United States Government. Within that pool there is a much smaller group of large contractors like DAI, which possess exceptional expertise, experience and resources. For many years, USAID has repeatedly relied on this smaller group of contractors (including DAI) to design and implement its largest and most complex projects. This reliance includes the contractor's ideas, judgments and decisions on subcontracting and project details in-country. While those judgments and decisions are usually subject to oversight and final approval by USAID, it is typically the contractor's responsibility to initiate, manage, and execute them accordingly. When USAID has a presence in-country, USAID could be quite involved in a project, working collaboratively with the contractor. In cases such as this, however, where USAID has no in-country presence, it is customary for the contractor to take on an even more active role in project management and execution.Guess is also co-director of the Center for Democracy and Election Management at American University School.

Note: This article was shared with the Center for Democracy in the Americas as part of a six-month collaborative project with non-profit group. See more about our collaboration here.