Why We Did This Audit
Between FYs 2017 and 2020, USAID spent an average of $20.6 billion annually in acquisition and assistance awards to implement foreign aid and development programs. According to a prior OIG audit, Based on the results of a 2019 OIG audit (9-000-19-006-P), USAID awards averaged only half of original intended results in 43 percent of awards to implement foreign assistance and development programs—yet USAID paid implementers essentially full award amounts.
The objective of our audit was to assess USAID’s policies and procedures guiding foreign assistance contract terminations and the extent to which they were applied in FY 2017-2019.
USAID’s contract termination guidance laid out in its policies and procedures—USAID’s Acquisition Regulations and Automated Directives System—was in line with the Federal Acquisition Regulation. Between FY 2017 and 2019, USAID contracting officers terminated foreign assistance contracts in accordance with established policies and procedures. During that period, USAID terminated five foreign assistance contracts—all at the convenience of the government.
However, more than half of the COs we surveyed noted that additional guidance, such as step-by-step procedures or training, would be helpful. Further, multiple COs indicated that varying degrees of management engagement—from pressure from management to either terminate a contract, not terminate a contract, or to terminate a contract for convenience despite raising the adverse cost implications of doing so, to a lack of leadership support—made termination decisions more difficult.
We made one recommendation to OAA to determine whether opportunities existed to strengthen the Agency’s foreign assistance contract termination process. OAA agreed with our recommendation.