Not so fast: Legal battle over largest-ever USAID award takes another turn

A forklift carries supplies from USAID. The Partnership for Supply Chain Management has filed a lawsuit in further objection to decisions surrounding the Global Health Supply Chain program, the largest ever USAID award worth almost $10 billion, that is meant to support the delivery and distribution of a range of global health commodities. Photo by: Lance Cheung / U.S. Department of Agriculture / CC BY

Startup activities on the largest-ever U.S. Agency for International Development award are locked in a holding pattern.

The Partnership for Supply Chain Management has filed a lawsuit in the U.S. Court of Federal Claims in further objection to decisions surrounding a USAID award worth almost $10 billion. The Global Health Supply Chain — Procurement and Supply Management project will coordinate the supply and distribution of commodities like antiretroviral medicines for HIV and AIDS, insecticide-treated bed nets to combat malaria, condoms, contraceptives, and vaccines.

The partnership — a group of aid organizations led by John Snow Inc. that coordinates health commodities distribution on behalf of the U.S. government — protested USAID’s April 2015 decision to award the contract to a new consortium that includes Chemonics International. The Government Accountability Office denied the protest, so PfSCM is taking further legal action.

At the time of GAO’s decision, Chemonics and its partners were informed by USAID that they could begin startup activities but have now been directed again by the agency to stop work associated with the new indefinite delivery, indefinite quantity contract, or IDIQ.

Chemonics President and CEO Susanna Mudge told Devex in an email that when the first stop work order was lifted, “We immediately assembled a team and began planning and preparing for the startup and transition phases.”

When the new suit was filed, USAID informed Chemonics that it would “voluntarily stay performance and seek an expedited schedule for a decision,” Mudge wrote. Chemonics anticipates that decision will be made within 120 days or by Dec. 21, 2015, according to Mudge.

In the development contracting community, many note a trend toward greater consolidation of programs into larger and larger contracts. That has given rise to a parallel increase in the frequency of award protests. As the cost of not winning individual awards goes up, unsuccessful bidders have a greater incentive to protest decisions.

“We obviously would rather be proceeding without any delay in the implementation, but protests are a fact of life and we were prepared to deal with them,” Mudge wrote.

The new Global Health Supply Chain program combines two existing programs, the Supply Chain Management System and Deliver. Those projects expire at the end of the next fiscal year: Sept. 30, 2016. In this case, both sides maintain the legal proceedings will not negatively affect those who depend on the health commodities — many of them lifesaving — for their well-being.

“We do not expect the delays to have any material effect on our implementation strategy. Our focus now is seeing how can make up some of the time that has been lost,” Mudge wrote. “While the [court of federal claims] delay is unfortunate and complicates matters, the transition from those projects to [the Procurement and Supply Management project] can still occur and should not have any impact on the project’s beneficiaries.”

On the opposite side of the case, the incumbent organizations also said their legal action will not disrupt the transition from one set of programs to the next.

“The Partnership for Supply Chain Management and JSI are committed to continue the terrific life-saving work of the SCMS and DELIVER projects and the people they serve,” Carolyn Hart, director of JSI’s Washington, D.C. office, wrote Devex in an email. “We will ensure a smooth transition to the new GHSC project, regardless of the outcome of the contracting [or] legal proceedings.”

USAID declined to comment on a matter under litigation.

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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.