EVALUATION OF FORCE ACCOUNT CONSTRUCTION OF LAKE SHORE ROAD (4/16/73-5/15/73)

Proj purpose was to construct a 126-mile road. Evaluatn is based on on-site observatns, econ data & interviews. Evaluator feels LSR proj was successful despite the tremendous effort involved. Equipmt was well utilized & may be beneficial in future projs. The benefits of on-the-job trng will not noticeably affect Govt of Malawi (GOM)"s future econ but should benefit those individuals trained. Road was uniquely constructed under a Modified Force Account Program (MFAP) in which labor, some materials & equipmt were provided by GOM with assist from TEER, a US constructn mgmt firm (CMF) & an independent US architect/engineer consultant. Initial progress was slow since US constructn equipmt did not arrive until after the rainy season. The main proj prob was the extensive mgmt/admin burden placed on AID, TEER, GOM & TAMS with offset low constructn costs & on-the-job trng. The use of an independent contractor was rejected by GOM since it appeared 18% more expensive than the estimated MFAP. The MFAP costs were however only 6% over the contractor"s bid. Unlike the MFAP sys, independent contractors are an advantage since they provide for the assessmt of liquidated damages for failure to complet work on time. Contracts give financial incentives to keep constructn costs down, make AID loan reimbursemt eligibility easy to determie and need not train men who will not remain on their payroll. Consultant likewise judges that even conscientious CMF"s will not always see the work is done properly. Disadvantages of unsatisfactory cooperatn between 2 firms & need for more on-site US employees during constructn caused evaluator to recommend that in similar projs only one contractor be utilized. In view of limited benefits other than possible cost savings, difficult admin probs, inherent large scale force account constructn managed by a US CMF & high risk of much poorer CMF performance than that experienced on the LSR, evaluator recommends AID not engage in similar projs unless certain host country wants that method & is capable of doing its part.