Contract problems led to late delivery of mosquito nets and delayed initiation of HIV treatment ©CARE/USAID
Contract problems led to late delivery of mosquito nets and delayed initiation of HIV treatment ©CARE/USAID

USAID contract errors jeopardised healthcare

Will Green is news editor of Supply Management
23 October 2018

“Significant mistakes” were made in the changeover to a new USAID contract that resulted in shortages of key medicines, according to a report.

An inquiry by the US House Foreign Affairs Committee found errors “jeopardised access to life-saving health commodities and wasted taxpayer dollars”.

The committee said contract problems led to late delivery of mosquito nets, delayed initiation of HIV treatment and resulted in the continued procurement of an outdated HIV drug.

The Global Health Supply Chain – Procurement and Supply Management (GHSC-PSM) contract, USAID’s largest ever, was signed in 2015 with a value of $9.5bn over five years. Under the contract USAID supplies, procures and delivers health commodities, including treatment for HIV/Aids and malaria, to 60 countries.

GHSC-PSM, signed with Chemonics International, combined two previous supply chain contracts. Approximately 5,700 commodities orders are in progress on a daily basis.

The report said 18 months into the contract reports were received of “depleted inventories and stock-outs of life-saving commodities in recipient countries”. During the investigation field visits took place to Ethiopia and Uganda.

The report said the tender process for GHSC-PSM was “flawed”, with USAID officers not following best practice when assessing contract proposals. “As a result, both USAID and Chemonics underestimated important operational challenges.”

The committee said disputes between Chemonics and the prior contractor led to delays in the implementation of GHSC-PSM and contributed to delayed commodity deliveries. USAID should “consider penalising contractors that refuse to cooperate during a transition”, said the report.

The report said oversight of GHSC-PSM was “lacking” and USAID opted to use different metrics to measure Chemonics’ performance that made comparison with the previous contractors’ performance “impossible”. It also USAID should evaluate whether the consolidated GHSC-PSM contract represents an improvement over the previous approach of using two contracts.

Committee chairman Ed Royce said a new position of senior supply chain leader had been created at USAID, due in part to the committee’s work.

“US global health assistance is critical to the wellbeing of every American,” he said.

“It saves lives, and advances key US economic and security interests. That’s why no amount of waste or mismanagement can be tolerated.”

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