IG audits continue to show that host country contracting procedures waste AID funds

(LBII) contractors. Audit report covers the period l979-83; no methodology is noted. As pointed out in the 1978 and 1979 audits, host country contracting procedures continue to result in a waste of A.I.D. funds. Host governments lack the capability to develop effective technical evaluation criteria to select the most qualified personnel. On two of three LBII contracts, technical selection was primarily based on personnel to be provided, but only 1 of 22 technicians named in the proposals was eventually employed. The Harris contract is a prime example of a technical proposal and selection process leading to the provision of incompetent personnel. Technical proposals in conjunction with price proposals would be a sounder basis for contractor selection. Host countries have been using an inappropriate time rate contract, which has cost the U.S. government millions of dollars, because the contractor can provide technicians who are paid much less than the salary on which the time rate is based. According to the auditors, this occurs because host governments and USAID"s lack both an incentive to negotiate cost-effective contracts and a basis for determining a reasonable price for a U.S. technical assistance team. In addition, host country contract provisions limit A.I.D."s legal right of recovery against contractors due to fraud, waste, or abuse. Finally, A.I.D. contract assistance is ineffective because A.I.D. lacks a system that penalizes its employees (e.g., legal advisors, contract and project officers) for bad judgement and poor contracting. This lack of management responsibility is costing the U.S. government heavily - almost $3 million in the four contracts herein audited.