AID-Financed Procurement

Pursuant to a congressional request, GAO reviewed the quality of an oil-drilling product (CELTROL-LV) that a U.S. firm supplied to Jordan and Pakistan under the Agency for International Development's (AID) Commodity Import Program, focusing on another U.S. firm's allegations that the contractor failed to comply with the contract specifications or AID source and origin regulations.

GAO found that: (1) Jordan tested the product and found that it met the contract specifications and AID source and origin requirements; (2) the awardee offered to have the product tested before shipment to Pakistan, and a testing company certified that it had witnessed the awardee's testing, but did not certify that the product met all of Pakistan's contract specifications; (3) AID incorrectly concluded that the certification meant that the shipment met all specifications and approved the Pakistan contract; (4) although Pakistan was not concerned about product compliance with four additional specifications, AID rules applicable to the Commodity Import Program required conformance to all contract specifications; (5) although one product component was of foreign origin, the dollar value of that component was less than half of the total manufacturing costs, in accordance with AID source requirements; and (6) AID did not have written procedures for investigating allegations of noncompliance, since it generally relied on host countries to investigate such matters.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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