USAID health supply chain project 'fully functional' but not strategic, review finds

BURLINGTON, Vt. — The U.S. Agency for International Development’s multibillion-dollar global health supply chain project, which coordinates the delivery of life-saving health commodities to dozens of countries, has shown significant improvement in its reported targets after significant challenges during startup, according to a mid-term review of the project made public last month and posted to Chemonics International’s website on May 12. “Today, the GHSC-PSM supply chain is fully functional as an operational supply chain.” --— USAID GHSC-PSM project mid-term review The review also noted that the supply chain is still more reactive than strategic, has dedicated unusually small amounts of resources to evaluation, and relies on a wide range of complicated indicators that are not always understood by the project’s USAID counterparts. “After an unprecedented, overly rapid transition from long-standing contractors, and a difficult start-up in the public eye, [the Global Health Supply Chain — Procurement Supply Management project] is credited with a strong comeback. The project is meeting and sustaining key targets of critical interest to USAID over this first half of the project,” including those related to on-time delivery and cost, the review found. The GHSC-PSM project involves a $9.5 billion suite of “task orders,” which coordinate the procurement and delivery of critical health supplies in support of major U.S. global health initiatives, including the U.S. President’s Emergency Plan for AIDS Relief. It is the largest USAID contract awarded to date, and attracted intense scrutiny after early reports showed a major dropoff in the supply chain’s performance. After a lengthy delay brought on by protests of USAID’s decision to award the contract to Chemonics, the project began operations in January 2016. Most of its components were scheduled to run through November 2020, with an option for USAID to extend the project an additional three years. The agency has chosen to grant that extension, Chemonics informed Devex. “I am pleased to confirm that Chemonics received and executed extensions for all four task orders under GHSC-PSM to extend the period of performance through November 2023,” Jane Gotiangco, Chemonics’ director of strategic communications, wrote to Devex in an email. In response to an inquiry from Devex, USAID did not confirm or deny the project extension. The agency has begun gathering feedback and issuing some general information about what it expects in the next version of this closely-watched contract. In May 2019, USAID released two requests for information related to the next version of the supply chain project. In March this year USAID posted notices to its business forecast — which provides advanced notice of expected awards — providing general information about the “Next Generation Global Health Supply Chain Suite of Programs.” The agency expects to release the solicitation notice for that collection of awards, which appears to amount to roughly $15 billion, in October and expects to make its award decision in June 2021, according to the business forecast notices. “We have no additional information about USAID’s design or plans for its next-generation procurement, other than that in the forecast and already in the public domain,” Gotiangco wrote. “Evaluative and learning opportunities have not been fully utilized, and to neglect this particular area would be a major failing for both USAID and GHSC-PSM.” --— USAID GHSC-PSM project mid-term review Reactive vs. strategic According to the midterm review, the project has seen dramatic improvements in key metrics reported by Chemonics. The percentage of shipments delivered on-time and in-full jumped from a low of 7% in the 2nd quarter of fiscal year 2017 to 85% in the 3rd quarter fiscal year 2019. The report said agency and project staff interviewed for the review credited the “all-hands-on-deck” approach taken by USAID and GHSC-PSM for the turnaround. “Today, the GHSC-PSM supply chain is fully functional as an operational supply chain,” the reviewers wrote. The review also noted that tracking the project’s performance can be challenging, due to the large number and complexity of indicators used. It found that the project has employed 52 different indicators to measure its performance since it launched. “While it is not unusual for indicators to be added, dropped, or have their wording modified, these changes do make the establishment of baselines, the setting of targets, and the monitoring of results more challenging,” according to the reviewers. The review also found that less than 1% of the project’s programmatic budget is spent on monitoring, evaluation, and learning. It noted that while USAID does not give any specific guidance as to how much should be spent on ME&L, the U.K. Department for International Development, World Bank, and The Global Fund for AIDS, Tuberculosis and Malaria recommend between 5%-10%. “For a high- profile project such as GHSC-PSM, this is particularly of concern, given both the demands for data and reporting, and the criticality of health commodities for USAID partner countries. Furthermore, evaluative and learning opportunities have not been fully utilized, and to neglect this particular area would be a major failing for both USAID and GHSC-PSM,” the review reads. Despite the improvements, and the finding that the supply chain is now functional, the review team found that the project remains more reactive than proactive, and that the system is managed based on events as they occur, as opposed to a predictive analytics approach that might be expected of a more sophisticated operation. GHSC-PSM’s management information system — known as ARTMIS — “has minimal predictive and analytic capabilities, which are a hallmark of more sophisticated, large, data-based supply chain MISs,” they wrote, adding that this is due in part to the fact that “management is based on day-to-day developments, and lacks an overarching strategy.” Members of USAID’s Global Health Bureau told the reviewers they, “expected that by this juncture ARTMIS would have had more proactive supply chain management capabilities, as well as more analytics capabilities, although at the same time they report that further funding is unlikely.” To contact this reporter, email michael.igoe@devex.com.