Chemonics received over 100 US govt terminations, 1 was rescinded

Chemonics International, which was the largest for-profit contractor for the United States Agency for International Development, has been pummeled by the Trump administration’s wholesale gutting of the agency. In recent weeks, the U.S. government sent the firm terminations for 92 contracts and cooperative agreements, as well as 14 indefinite delivery, indefinite quantity contracts, known as IDIQ contracts, according to a source familiar with USAID’s programs. These terminations comprise the vast majority of the company’s contracts — but not all. For example, the global health supply chain task order supporting HIV/AIDs wasn’t terminated. But this week, one of these termination letters was rescinded — focused on supply chains for malaria products. The rescission comes amid USAID’s own confusion about which contracts were canceled and a reversal of termination letters for other organizations also receiving funds from the agency. Internal documents show that the terminations were done in a haphazard way. In a Feb. 28 memo, Nicholas Enrich, then-acting assistant administrator for USAID’s global health bureau, who has since been placed on leave, wrote that over 5,000 USAID awards were terminated on Feb. 26 without the global health bureau receiving notification in advance. Enrich then alerted other USAID officials about the “grave impacts on lifesaving activities” related to these terminations in areas including malaria, tuberculosis, and Ebola. Joel Borkert, USAID’s then-deputy chief of staff, indicated that awards were terminated in error, Enrich wrote. “Please hold on these life saving programs and let us review in the morning. There is an acknowledgement some may have been sent out in error and we have the ability to rescind. We need to identify what those are,” Borkert wrote, according to Enrich. The reinstated contract — Chemonics’ malaria task order — falls under the $9.5 billion USAID Global Health Supply Chain Program – Procurement and Supply Management, or GHSC-PSM, which is the largest project USAID has ever funded. The program purchases and delivers health commodities and provides technical assistance to strengthen national supply systems. GHSC-PSM is led by Chemonics, in collaboration with Arbola Inc., Akesis Global Health Inc., IDA Foundation, IBM, IntraHealth International, Kuehne + Nagel Inc., McKinsey & Company, Panagora Group, Population Services International, SGS Nederland B.V., and University Research Co. LLC. The malaria work falls under the U.S. President’s Malaria Initiative, which provides products and services for more than 700 million people every year. It has included the provision of artemisinin-based combination therapies, long-lasting insecticidal nets, rapid diagnostic tests, severe malaria medications, and seasonal malaria chemoprevention, among other products and services. According to USAspending.gov, the potential award amount for the malaria task order contract is $3.3 billion, running from 2015 to 2026. Chemonics, alongside other organizations, filed a lawsuit on Feb. 11 against the Trump administration, challenging the freezing of foreign aid and hollowing out of USAID. This week, a federal judge ordered the Trump administration to pay organizations, including Chemonics, by March 10th, for work completed before Feb. 13th. It’s a move the judge called the “first concrete step” toward the release of nearly $2 billion in suspended foreign aid, which includes due and overdue invoices and reimbursement requests. Chemonics has about $103.6 million in outstanding invoices to the U.S. government for work performed last year. It had $240 million in contractual commitments for medicines and health supplies before the Trump administration’s global halt to USAID programming. Court filings said several of the plaintiffs in the case and their members “face the prospect of ceasing operations” and “their very existence” is threatened, which requires “emergency relief.” Chemonics also furloughed 750 of its U.S.-based staff — more than 63% of its American workforce — with plans to furlough additional staff. However, the firm has also faced challenges in rolling out its U.S. government programming. In 2023, Devex published an investigation that raised questions about GHSC-PSM’s performance, to which the company responded that since it took over in 2016, the project has “procured over $5 billion in drugs, diagnostics, and health commodities worldwide as of the end of March 2023, all while saving U.S. taxpayers more than $647 million on health commodities.” In December, the company also agreed to pay $3.1 million in a settlement agreement stemming from fraudulent billing by Nigerian subcontractor Zenith Carex. In 2020, Chemonics disclosed to the U.S. government that the company had intentionally overbilled for services and that those charges had been passed on to USAID. Chemonics has denied liability in this case, with a spokesperson noting that “the subcontractor defrauded Chemonics and the U.S. government despite the controls and oversight both have in place.” Update, March 10, 2025: This article and its headline have been updated to clarify that Chemonics had one termination letter rescinded by the Trump administration.