Award Planning and Oversight Weaknesses Impeded Performance of USAID’s Largest Global Health Supply Chain Project

Audit Report
Report Number
9-000-21-004-P
In April 2015, USAID issued a $9.5 billion award to Chemonics to implement the Global Health Supply Chain Program – Procurement and Supply Management project, the largest component of the Agency’s Global Health Supply Chain Program. In response to a request from the Senate Foreign Relations Committee, we assessed USAID’s procurement and management of the project. We determined that weaknesses in planning and evaluation processes hindered USAID’s ability to fully support key decisions made in the design and award of the contract. Additionally, while USAID ensured deliveries generally arrived in the right quantities, more oversight is needed to improve timeliness and contractor performance. We made 14 recommendations to strengthen USAID’s design and procurement processes and improve its management of the GHSC-PSM award and successor projects.
9-000-21-004-P.pdf1.43 MB

Recommendations

Recommendation
1

Revise policy to clarify the role and the extent of involvement of the contracting officer on a project design team to ensure compliance with the Federal Acquisition Regulation.

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Recommendation
2

Develop and implement guidance outlining the minimum supporting documentation required for key decisions influencing the design of an award.

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Recommendation
3

Develop and implement guidance to help prepare risk assessments, mitigation plans, and plans during project design that take into account the consequences of failing to achieve goals in accordance with the Federal Acquisition Regulation.

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Recommendation
4

Develop and implement guidance to help address heightened risks posed by the use of single-source awards, specifically the increased potential for award protests, underperformance by the sole implementer, and lack of competition, in pre-award risk assessments.

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Recommendation
5

Develop and implement guidance to help evaluate proposed management information systems by verifying system capabilities, such as by requesting case studies.

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Recommendation
6

Conduct a review of the verification process used to determine the completeness and accuracy of the Global Health Supply Chain - Procurement and Supply Management technical evaluation committee's consideration of information about bidders' past performance to identify gaps that allowed errors to occur, and implement a plan to correct those gaps.

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Recommendation
7

Develop and implement guidance to help operating units develop timelines for preprocurement and procurement activities so that operating units understand the time requirements for steps in procurement process.

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Recommendation
8

Develop and implement a plan to assess the indicators used to measure the reliability and responsiveness of the supply chain for accurate representation of delivery dates, including reviewing the use of the early delivery reason code, the order promising tool, and any other tool that affects the measurement of this indicator.

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Recommendation
9

Work with Chemonics to conduct a review to determine the effectiveness and efficiency of regional distribution centers and implement a plan of action to correct any inefficiencies identified.

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Recommendation
10

Train USAID activity managers to use the project's management information system for requisition order approval and monitoring responsibilities.

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Recommendation
11

Establish a timeframe for addressing the recommendation proposed by Bureau for Global Health leadership in 2018 on creation of a central supply chain unit and set target dates for the implementation of accepted changes.

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Recommendation
12

Establish a timeframe for addressing the recommendation proposed by management consultants in 2019 on risk mitigation issues and set target dates for the implementation of accepted changes.

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Recommendation
13

Require USAID activity managers to use the project's management information system for requisition order approval and discontinue the use of proxy approvals.

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Recommendation
14

Work with Chemonics to complete an assessment of the organizational structure and staffing needs to manage the Global Health Supply Chain - Procurement and Supply Management project.

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