Has 'sloppiness' left USAID partners to clean up the mess?

The aim may have been the Trump administration’s prerogative — to cut spending that it deems antithetical to its agenda. But when it comes to foreign aid spending? “It’s just plain sloppiness that's going to cost a lot more for the taxpayers,” said Robert Nichols of the law firm Nichols Liu at Devex’s most recent Pro Briefing. That alleged sloppiness is now playing out in near-daily courtroom battles between the administration and a group of NGOs and for-profit contractors suing to get paid for work done before U.S. President Donald Trump's foreign aid freeze on Jan. 20. The latest legal showdown took place on Wednesday night, when the administration went to the Supreme Court to stop a judge’s ruling ordering it to disburse nearly $2 billion in suspended payments by midnight. It won a temporary victory when Chief Justice John Roberts paused the order. The plaintiffs now have until noon Friday to make their next move. Even before that decision, the administration moved aggressively to signal that it is not restarting payments, possibly ever. In fact, it canceled nearly 10,000 USAID and State Department awards, eliminating about 90% of the U.S Agency for International Development’s work and potentially dealing the agency its final death blow. The government told the Supreme Court that the order forcing it to pay frozen aid funds had “thrown what should be an orderly review by the government into chaos.” Critics, though, question whether the government is even bothering to conduct a review, considering the weeks it seemingly refused to disperse funds and then the sudden speed with which it terminated 10,000 contracts and grants practically overnight. Part of the plaintiffs’ argument is that the Trump administration’s blanket freeze on foreign assistance was arbitrary and capricious. Nichols pointed out that the administration can now come back and say it needs more time for the review so that it’s not arbitrary, in essence allowing it to drag the process out even further — by which point many NGOs and contractors will simply go under. The government is now basically saying to the judges, 'you can't tell us that we have to send out $2 billion without checking the invoices for waste, fraud, and abuse’ — and the government here has kind of got a good argument,” Nichols said. “The fundamental problem is that they ran out of the gate very quickly and just did these blanket orders without following the process. Now they're saying, ‘OK, yeah, but in the meantime, we've started following the process.’” “I do believe that the trial court judge is going to say, ‘Listen, you're still acting arbitrarily here. You basically, mathematically, are spending about 10 seconds per award to decide whether to terminate it or whether to pay it. That's not enough time,’” Nichols added. “And what the government's going to say is, ‘Well, yeah, that's exactly right. That's why we're saying we need more time … which is a little bit of a sleight of hand.” “I believe that the plaintiffs have a pretty good argument that the way they're doing it is still arbitrary, and it's causing tremendous harm,” he continued. “But what does that get you? What it really gets you is that the government has to slow down and do it right. … The real question is the money, right?” On that note, Nichols said that while arguments will continue about separation of powers and the executive branch’s rights, all those terminated awards could eventually be lumped into a termination settlement proposal, which the government may pay or continue to dispute. “Ultimately, the administration has the right to terminate awards. I believe that's going to hold. It may not hold yet, but it will hold eventually. I don't believe they have the right to not pay their bills, and that's really what we're facing. But I think the paying the bills part is likely to come in through the termination settlement proposal,” Nichols explained. Even if the government agrees to ultimately pay the settlement proposal, contracts still have to be scrutinized and payments processed — again, more time. Plus, who’s going to do that with the USAID workforce gutted? “Those can be done by contracting officers, but there are no contracting officers right now,” Nichols pointed out. There are specific federal bodies that can process the claims, but they only consist of a “couple of dozen judges.” “And these things often take a lot of time. A typical termination settlement proposal might take … six months to 18 months to actually get processed and paid,” he said. “And that's in a normal circumstance. Now we've got at least 10,000 of these coming to a couple of dozen judges and no contracting officers. It's going to clog up the system dramatically.” That’s why Nichols slams the way the administration went about everything. He doesn’t dispute that the Trump administration has the right to shape and execute the policies that voters asked him to implement. “And if the voters say, ‘We don't want a government that spends $2 trillion a year more than it takes in,’ OK, I get that. If they say, ‘We don't want programs that deal with X, Y and Z, it's not a good use of our money,’ OK, I have no problem with that,” he said. “The problem I have is the way that this is being done — it is throwing the baby out with the bath water … in terms of not respecting the rule of law and undermining trust in the system.” And he fingers one person in particular who has undermined the process: Peter Marocco, a controversial political appointee in Trump’s first administration who is now spearheading the USAID review as acting deputy administrator of the agency. Nichols said budget and staff cuts are going to happen across all U.S. government agencies, “but hopefully other agencies do this better, because the way that Mr. Marocco has done this in the foreign assistance space, I believe, is going to cost the government … $10 billion is my guess, [plus] tens of thousands of lawsuits and the sloppiness and the irresponsibility of it all.” “If they had just taken a beat and done it right, it could have been done more efficiently. And I think that's going to happen in other parts of the government. They're going to learn their lessons, hopefully they'll get better at it, but I believe this one individual, I wish he had taken the time to get good counseling on this, because the devastating effects on the industry are undeniable [and] the cost for the taxpayers of his wasteful actions are staggering.” Nichols also said that at this point, the government may be trying to save face after botching up the entire process. “I think that after they got sued all over the place, they took a deep breath and said, ‘OK, we're not going to get away with this entirely. We don't want to look like we completely messed this up, and we don't want to have people dying all over the world and be blamed for that.’ So I wouldn't be surprised if they picked an arbitrary number, like 10% and said, ‘What are the most important 10% so we don't look terrible?” Nichols said, noting that he has not seen the list of awards that may be preserved. “But my guess is that those awards are the ones that optically would look the worst being terminated — and everything else, I would be surprised if it gets turned back on.”