REPORT ON EVALUATION OF THE FIXED AMOUNT REIMBURSEMENT (FAR) PROCEDURE AS APPLIED TO PROJECTS IN AFGHANISTAN

The procedure has not been effective for Phase I of the Central Helmand Drainage project because of cost estimating difficulties and a reluctance by the grantee to seek reimbursements when actual costs exceeded estimates. The evaluators analyzed each of the four projects individually. Twelve common conclusions about the Rural Works, Rural Primary Schools and Basic Health Services projects were summarized. They include: (1) the FAR procedure, coupled with technical assistance, has led to significant improvements in grantee cost estimating; (2) requirements of the FAR procedure for pre-agreed designs and specifications and USAID engineering certification of completion have brought about better grantee acceptance of constructive criticism and engineering technical assistance in design preparation; (3) FAR permitted project implementation without undue USAID involvement in grantee-negotiated contracts; and (4) the requirement that schools and Basic Health Centers must be "operational" as a precondition for reimbursement may be the most important, beneficial element of the FAR procedure. The evaluators made 10 recommendations including: (1) the FAR procedure should be applied to projects in Afghanistan when the project entails replicable or discreet units of construction; (2) AID/W must provide assistance to obtain a significantly increased engineering capability; and (3) USAID must assure continuity in advising grantees of required performance standards when project officers, technical advisors, and engineers are replaced or exchanged.