Foreign Assistance

AID's Use of Personal Services Contracts Overseas Gao ID: NSIAD-91-237 September 13, 1991

Overseas missions and offices of the Agency for International Development (AID) used several hundred U.S. personal services contractors to perform a broad range of mission and project management functions. GAO's review disclosed no instances in which contractors performed inappropriate functions--such as negotiating with foreign entities; entering into an agreement on behalf of the United States; or making decisions involving planning, budgeting, programming, and personnel selections. However, in its reviews in Guatemala, Honduras, Indonesia, the Ivory Coast, Kenya, and Pakistan, GAO did identify situations where contractors worked without close or continuous supervision, thus enabling them to influence AID operations by providing advice and recommendations. GAO recommends more stringent enforcement of conflict-of-interest regulations for personal service contractors.

GAO found that: (1) personal services contractors provided advice on program policy, assisted missions and host government institutions in financial and management operations, designed and implemented development projects, and provided specialized skills in various sectors; (2) although AID requires that personal services contractors be adequately supervised, it has not defined adequate supervision; (3) PSC files and interviews with contractors and their supervisors disclosed no instances where the contractors performed restricted functions; (4) although AID provides contract and consultant service data to Congress through the annual budget reporting process, AID is not required to and does not separately disclose in its congressional budget presentations the number and value of PSC or the types of services provided; (5) since AID does not define the circumstances under which personal services contractors should be considered consultants, AID consultant services reporting is inconsistent and not adequately supported; (6) although federal regulations do not provide specific conflict-of-interest guidance for personal services contractors, AID regulations subject them to the same requirements that apply to AID employees; and (7) AID contracting officers were responsible for ensuring that personal services contractors met such standards and did not have conflicts of interest, but AID officials were generally unaware of the requirement and it was not being enforced.


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