USAID's Response to the Center's Report
October 29, 2003
Ms. Maud S. Beelman
Director, International Consortium of Investigative Journalists
Center for Public Integrity
970 17th Street, NW, 7th Floor
Washington, DC 20006
Dear Ms. Beelman:
Thank you for your recent inquires regarding USAID's contracts in Afghanistan and Iraq. I look forward to receiving a copy of your study when it is released.
We would fully welcome an opportunity to meet with you to discuss USAID's Iraq or Afghanistan contracts and, as importantly, the work which is being carried out in these countries in the areas of education, health care, local governance, for instance. We were disappointed that while your staff did submit FOIA requests to obtain several contracts, your staff never requested information on the transparency of our procurement process.
As a federal agency USAID is obligated to and follows strictly the Federal Acquisition Regulations (FAR).
In Iraq, for instance, after an expedited competition process which was fully in compliance with the FAR, Bechtel was awarded a contract for capital reconstruction projects. Bechtel was awarded this contract on highest technical merit and lowest cost after an aggressive review by career civil servants—non-political career professionals. For all procurement actions (not just those in Afghanistan and Iraq), USAID has set up strict firewalls that separate the career workers who participate in procurement evaluation decisions from political appointees—who, almost without exception, do not serve on technical panels or make contracting officer cost decision, and have no say whatsoever in that process. This firewall was in place for all Iraq procurements.
It would also be incorrect to suggest that there is no overall oversight of this process. The USAID Inspector General's review of all Iraq contracts—which was requested by USAID Administrator Andrew S. Natsios on April 14th—has shown that all Iraq contracts to date have been done in compliance with the FAR. The General Accounting Office (GAO) is also providing oversight into all contracts not only issued by USAID but by other federal agencies as well.
As you know, USAID has cooperated fully with your office as it has conducted this study. USAID's Freedom of Information Act (FOIA) Office has received over 40 requests from your staff in the past six months regarding contracts in Iraq and Afghanistan. Our four-person FOIA office has been working for several months to accommodate these requests, which involved between 10,000 and 15,000 pages of documentation. We understand that the FOIA office has already provided you with all of the contracting amounts.
It's also important to note that all Requests for Proposals (RFPs) for Iraq have been publicly available via the website for over six months. In fact, the USAID website www.usaid.gov is a valuable source of information for the general public which receives approximately 2,500 hits per day.
Thank you for bringing your study to our attention. Please let us know when this office can be of further assistance.
Sincerely,
J. Edward Fox
Assistant Administrator
Bureau for Legislative and Public Affairs
The Center Responds to USAID
Oct. 30, 2003
We would like to thank J. Edward Fox of the U.S. Agency for International Development for his kind offer to meet with us to discuss USAID's Iraq and Afghanistan contracts. He faxed us his letter at 9:49 a.m. on October 30, 19 minutes after the start of our press conference to announce the results of our six-month investigation into that very subject. We will certainly take him up on his offer, however belated it may be.
In the meantime, we would like to respond to a few of the claims he makes while extending this cordial invitation.
Mr. Fox writes that he was disappointed that we "never requested information on the transparency of our procurement process." Our report was focused on the recipients of the contracts, not on the procurement process. The transparency of the contracting process became part of our investigation only when we encountered difficulties in getting information from USAID and other federal agencies. The Center eventually requested not only contracts, but also "all correspondence" relating to the contracts to allow us and the public to evaluate USAID's procurement process. Although we have received four contracts from USAID, to date we have received no correspondence relating to the contracts.
Mr. Fox asserts that "all Iraq contracts to date have been done in compliance with the FAR (ed. Federal Acquisition Regulations)." This is incorrect and misleading. The agency's Inspector General has looked into the procurement process of Iraq reconstruction contracts, and the result of these audits are not as clear cut as Mr. Fox contends. For example, in one memorandum, dated June 6, 2003, the IG found that "USAID did not comply with federal regulations for conducting market research to identify prospective contractors" in regards to a contract awarded to Creative Associates International.
Additional examples of the Inspector General's reports are publicly available—on the USAID Web site.
We appreciate USAID's efforts to respond to our requests. It is always gratifying when government agencies comply with their legal obligations under the Freedom of Information Act. But it should be noted that, although we did receive contract award figures from USAID's FOIA office, these were often incomplete and misleading, and on occasion inaccurate. We realize that these contracts can be voluminous. Had we not aggressively questioned the information provided by the agency, we undoubtedly would have grossly misstated the numbers to the public. A perfect example of this is the inaccuracy of the information we received from the FOIA office regarding Chemonics International. Initially, the USAID FOIA office sent us a document that listed the value of the contract at $599 million. The company disputed that amount. USAID told us—on Oct. 29 at 4:34 p.m., hours before we were going to release our report—that the actual amount of the contract was $599,000—rather a significant difference. Mr. Fox notes that his four person FOIA office reviewed between 10,000 and 15,000 pages in response to our requests for information. As of Oct. 30, 2003, the Center has received just over 300 pages from the USAID FOIA office. We are looking forward to receiving the other 9,700 – 14,700 pages he refers to in his letter. In the spirit of his stated desire for a transparent procurement process, and in the public interest, might we suggest USAID post all of these documents and contracts on its Web site.
Once again, we thank Mr. Fox for his letter, and we look forward to working with USAID in the future.
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