USAID airlifts medical supplies to areas affected by the Ebola outbreak. A consortium of government contractors filed a bid protest against USAID's award decision on its Global Health Supply Chain project, the aid agency's biggest contract to date. Photo: Carol Han / OFDA/USAID / CC BY-NC

The Government Accountability Office has denied a bid protest filed in response to the U.S. Agency for International Development’s award decision on the Global Health Supply Chain — Procurement and Supply Management project, the agency’s largest-ever contract, valued at $9.5 billion.

The Partnership for Supply Chain Management, a consortium of government contractors including John Snow, Inc., previously held the award. In filing the protest, the consortium argued USAID did not adequately account for the value of past experience and accepted an unreasonably low-priced proposal without ensuring the work could actually be carried out at that price. Those charges were not supported by GAO, which denied the protest Tuesday.

The Global Health Supply Chain project will now fall to a new consortium of implementers led by Chemonics International, Inc. The project coordinates a massive logistical effort to distribute livesaving drugs and treatments to combat and treat a range of diseases, including HIV and AIDS, malaria, and tuberculosis.

The largest-ever USAID award is under protest

A group of development implementers is protesting the U.S. Agency for International Development's  $10.5 billion health supply chain award — the agency's largest ever. The Government Accountability Office has 100 days to make a decision.

PfSCM and John Snow, Inc. argued that USAID “failed to reasonably and fairly evaluate each offeror’s technical proposal” and failed “to conduct a fair or meaningful cost realism analysis of the offerors’ proposals,” according to protest documents seen by Devex. GAO — and representatives of the winning bidders — disagreed.

In defense of the award decision, lawyers for the winning bidders argued in comments submitted to GAO and seen by Devex that “PFSCM’s protest grounds primarily revolve around its insistence that, as an incumbent providing similar services, USAID should have automatically awarded it higher scores and its estimated costs should have been accepted as the benchmark for realism. Such conceit is obviously misplaced.”

USAID has billed the contract as “a new approach to purchasing and distributing lifesaving medicine and health supplies.” According to an agency press release, “USAID will use data analytics and innovative tools to drive down the price of medicines and increase delivery speed.”

Some have expressed concern that transitioning the implementation to a new group of contractors could disrupt relationships with government officials and other partners and lead to gaps in health commodities distribution. USAID and the winning consortium remain confident their transition plan will mitigate any such concerns.

In the protest proceedings, representatives of the winning consortium argued that it is up to USAID to decide what kinds of services it requires and the best way to acquire them.

“GAO’s role is not to re-evaluate proposals or act as a new source selection authority, but rather to examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations,” Chemonics’ legal representatives argued, citing past precedent.

PFSCM’s “mere disagreement with the agency’s judgment,” they added, “does not establish that the evaluation was unreasonable.”

According to John Crowley, chief of the Supply Chain Management Division in USAID’s Bureau for Global Health, the new approach is a consolidation of past projects, both of which were ending at the same time. That allowed the agency to rethink its overall health commodities distribution strategy and to look for areas of potential cost savings. The new award looks to “reduce some supply chain redundancies,” Crowley told Devex, noting that it is intended to create “greater visibility across the transactions” and “efficiencies at the country level.”

“We are honored that USAID has chosen to partner with us on the Procurement and Supply Management project, which harnesses cutting-edge technology, diverse partners and unprecedented data visibility to improve global health supply chains, reaching more people for less money,” Susanna Mudge, Chemonics CEO and president, said in a statement sent to Devex.

The Global Health Supply Chain project was scheduled to begin in September 2016, therefore providing time to transition from one group of implementers to another. At the time of publication it was unclear what effect, if any, the protest will have on the timing of the award’s implementation.

Stay tuned to Devex for more updates as we receive them, and let us know if you think GAO got it right in the comments below. Subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you FREE every business day.

About the author

  • Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.