DfID seeking legal advice over confidentiality breach by top supplier

By Molly Anders 24 January 2017

Members of Royal Air Force secure heavy equipment and vehicles in an aircraft headed to the Philippines to bring aid in the wake of Typhoon Haiyan. Photo by: Crown Copyright / CC BY-NC

The U.K. Department for International Development is seeking legal advice in its investigation of supplier Adam Smith International following a reported breach in confidentiality agreements, a DfID spokesperson confirmed to Devex.

The uproar began last month when a former DfID employee working for ASI apparently revealed internal DfID documents to colleagues in a bid to win contracts. “A thorough forensic audit investigation into ASI” is “still ongoing,” and DfID is “taking detailed legal advice,” the spokesperson said.

Yet even as the investigation is pending, other suppliers told Devex they are feeling the pressure as DfID prepares to increase scrutiny of for-profit organizations.

Shortly after DfID and the International Development Committee — the parliamentary body that oversees foreign aid spending — launched investigations into ASI, the Secretary of State for International Development Priti Patel sent a letter to all DfID suppliers on Dec. 19 “outlining its increased expectations in terms of transparency and ethics.” She announced “a review of supplier practices to ensure we maximise results for the world’s poorest,” the spokesperson said.

ASI came under fire last month when its senior international development manager for Africa, Raja Dasgupta, emailed colleagues unpublished country and regional plans he had acquired while working at DfID as a civil servant. Dasgupta said in the email that he believed the information would help ASI win more contracts from DfID, ASI’s biggest client, but warned colleagues to keep the information quiet given his former role there. The emails were promptly leaked to the Daily Mail.

A statement from ASI confirmed Dasgupta has since left the organization, and said the ex-employee acted “without the knowledge of senior management and on his own initiative.” ASI also said it is cooperating fully with DfID’s investigation, as well as conducting its own inquiry, and “will take swift and firm action against anyone found responsible for inappropriate or unethical behaviour.”

Patel’s subsequent letter to suppliers promises to “increase scrutiny of supplier spending” through higher standards of transparency and tax compliance, engagement of supply chain and subcontractors, and fair and reasonable profits. The secretary of state also reiterated the importance of DfID’s data and security policies and reminded suppliers they are obliged to report any violation of DfID’s policies.

“Suppliers also have an obligation to inform DfID in the event that they become aware of any fraudulent behavior, unethical behavior or breach of confidentiality regardless of whether it pertains to the supplier’s own contracts with DfID or to third-party-owned contracts,” she writes.

Another employee of a DfID for-profit supplier that competes with ASI told Devex that DfID has yet to offer many specifics on how or when the increased standards will come into effect. The person expressed concern that DfID — often cited as the most transparent bilateral donor in the world — might put the effectiveness of U.K. aid at risk by adding still more scrutiny to its systems.

“It’s difficult to anticipate what effects we will see without being given the specifics of the requirements, but we are confident in our ethics, compliance, and project management infrastructure, and we believe at the industry level that contracting is actually the most transparent, accountable, and responsive of the various aid channels available to the government,” the source told Devex, asking to remain anonymous to preserve business relationships.

The source said he believes it’s possible to overdo compliance, potentially suffocating the primary development mission on both the donor and implementer side. “We have made it clear that we are used to intensive scrutiny and accountability, and we have welcomed the high standards, presumably on a level playing field, while also noting that scrutiny can be taken to excess,” he said.

An independent development consultant — also wishing to remain anonymous to preserve professional ties — added that ASI’s breach had “nothing to do with lax rules on DfID’s part or any corruption,” and was “a simple ethical breach on the part of ASI, both the employee, and also management for not reporting [the leak] to DfID,” they said.

“Contractors are supposed to have training about what is permitted in procurement periods and so forth. If you come across information that you believe to be sensitive even if you don’t know it to be, you are instructed to make sure that is not used in any way to your competitive advantage and [if it does] you need to report it to the right people,” the independent contractor said.

“That employee broke the rules, either because they were poorly trained or because they wanted to, and then management neglected to share the breach. ASI should be punished and then everyone can move on.”

For more U.K. news, views and analysis visit the Future of DfID series page, follow @devex on Twitter and tweet using the hashtag #FutureofDfID.

About the author

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Molly Andersmollyanders_dev

Molly is a global development reporter for Devex. Based in London, she covers U.K. foreign aid and trends in international development. She draws on her experience covering aid legislation and the USAID implementer community in Washington, D.C., as well as her time as a Fulbright Fellow and development practitioner in the Middle East to develop stories with insider analysis.


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