USAID lifts IRD's suspension, says change is on the way

The U.S. Agency for International Development has lifted its suspension of International Relief and Development, the nonprofit placed under investigation in January for alleged financial misconduct. Ben Edwards, USAID senior adviser and chief spokesman, told Devex that “an issue was raised when preparing to respond to [IRD’s] lawsuit.” Edwards told Devex USAID plans to correct the issue and reconduct the review of IRD’s financial activities immediately. The National Defense Authorization Act of 2013 stipulates that “the suspension and debarment officer may not report to or be subject to the supervision of the acquisition office or the inspector general.” At the time of IRD’s suspension, the SDO was head of the Acquisitions Regulation Office. USAID has taken the position that while it was technically compliant with the National Defense Authorization Act of 2013 at the time of IRD’s suspension, “in an effort to enhance and elevate the independent authority of the [suspension and debarment officer],” Edwards told Devex, it has moved the SDO to a different department and lifted IRD’s suspension. It’s because of what legal experts who spoke with Devex describe as a “conflict of interest,” that USAID will reconduct the review of IRD’s finances. “In response to concerns raised about compliance with the NDAA,” Edwards told Devex, “USAID has decided to immediately conduct a new review of IRD’s ‘present responsibility’ to manage taxpayer funds.” But having an SDO in acquisitions is not so uncommon, regardless of USAID’s interpretation of the law, according to Steven Shaw, senior counsel at Covington and Burling LLC and a former debarment and suspension official for the U.S. Department of the Air Force. “If it’s your job to debar contractors who are not responsible, and it’s also your job to award contracts, in my view that’s definitely a conflict — but it’s true of a lot of agencies,” Shaw said. USAID’s decision to move the SDO came two full years after the National Defense Authorization Act came into effect and only days after IRD filed a lawsuit against the agency. David Robbins, another former debarment official and government contracts department chair at Shulman Rogers LLC told Devex he feels confident that IRD’s actions spurred the agency to change tack. “I haven’t heard, in my experience, of an organization filing a suit and actually changing where the officer sits,” Robbins said, adding that change in an agency following a complaint or lawsuit from one of its contractors is “extremely rare.” “How often do you have an agency say, ‘We weren’t doing a good job’? It’s dramatic,” Robbins told Devex. “And if they follow through on it, it’s also very refreshing.” In a letter seen by Devex addressed to IRD President and CEO Roger Ervin, USAID acting Assistant Administrator Clinton White wrote, “Just a few days before filing suit, IRD submitted additional information attempting to demonstrate present responsibility. USAID would like to fully review and consider that additional information. IRD is hereby requested to submit any supplemental information that it believes relevant to the matter of its present responsibility on or before June 29, 2015.” Said Robbins of the potential likelihood of a second suspension: “Resuspending would be foolish and I don’t think they could do it again.” In an email to Devex, IRD’s Ervin said the nonprofit was “focused on moving forward, serving beneficiaries and innovating for the future,” expressing his excitement about “doing more with less” and building a “very, very new business model previously unseen in the development sector.” Robbins suggested that the new investigation would likely take around a month. Stay tuned to Devex for more news and analysis of U.S. aid, and subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you FREE every business day.