'I oppose any further integration of the State Department and USAID'
International, one of the largest and most successful U.S.-based contractors for U.S. technical assistance projects worldwide. He directs Chemonics’ consulting activities and supervises all professional and support personnel in Washington, D.C., and in countries worldwide, including Tanzania, Egypt, Bolivia and Ukraine. Before working for Chemonics, Mr. Teele served as chief of party for projects in Afghanistan and Thailand and as technical manager for international economic development projects run from the United States.
His company specializes in the implementation of projects funded by the United States and other governments, as well as international agencies, including the World Bank, the U.S. Trade and Development Agency, the Overseas Private Investment Corporation and the United Nations Development Program.
The company employs more than 500 staff members in the United States and 30 countries around the world. Last year, the firm produced enough business to raise its backlog of orders to $250 million, with 1998 sales amounting to $58 million, a drop from $97 million in 1997.
In 1995, Chemonics won a $5 million, three-year contact to manage the establishment of Ukraine’s Agricultural Commodity Exchange, a project that Teele characterizes as a ‘qualified success.’ Together with The Recovery Group (TRG), a Boston-based contractor, Chemonics is currently managing a USAID-funded privatization project for non-farm land in Ukraine, the second extension of a $3 million contract awarded to a Chemonics-TRG consortium in 1997. The company is actively pursuing other multi-million dollar USAID contracts to reform Ukraine’s complicated agricultural sector.
Q. How has ongoing reorganization of USAID worldwide – which puts U.S. assistance increasingly under the administration of the U.S. State Department – changed Chemonics’ participation in U.S.-funded assistance programs?
A. To date, the changes have not had any impact on the [USAID] contractors. It has, of course, affected senior officials at USAID. The head of USAID now reports to the U.S. Secretary of State and not to the president. But the whole contracting structure has not changed at all.
Q. Do you anticipate it changing?
A. Only if [Senator] Jesse [Helms] gets his way 100 percent, and then I don’t know. But at least there is a possibility that the contracting procedures and the whole AID program could get muddled up. That is the USAID conventional wisdom: If USAID is completely integrated with the U.S. State Department it will disappear; it will be turned into a slush fund for ambassadors to use for their own purposes. This is a very strong statement, and I don’t happen to believe it. However, I certainly oppose any further integration of the State Department and USAID.
Q. You feel that the agencies should remain separate?
A. Yes. And I am a former Foreign Service officer, so I come from that world. I believe that the embassy has its job, and the AID mission has its job. Of course, the ambassador is the overall quarterback: He is the one who is appointed by the president [of the United States] and is in overall charge of everything U.S. in Ukraine or in any other country. And if the ambassador wants to kick me out [of Ukraine] then he can do it. It is his right. But the State Department should not excessively influence the daily operations of assistance programs.
Q. What is the difference between grantees and contractors?
A. USAID funds non-governmental organizations to perform the work they do anyway. Grantees typically have other sources of support over and above what they receive from the U.S. government.
A contractor, on the other hand, is hired to do what USAID wants. USAID designs a project in cooperation with the local government and puts it out for bids from the world at large. Interested contractors submit proposals, someone finally wins the tender, and a contract is signed.
Contractors are subject to more supervision than grantees. That can be irritating for contractors, but it results in a lot more focused effort. Grantees get very little supervision from USAID.
USAID is a contracting agency. It designs projects with host governments and requests proposals or bids. Tenders are announced electronically in the Commerce Business Daily. To bid on contracts is costly, with the average proposal costing about $50,000 to prepare. I suspect that for our competitors the costs [of preparing bids] are the same, unless they are a lot more efficient than we are.
Chemonics submitted bids for a number of contracts in Ukraine before we were successful. We became interested in Ukraine approximately the same day that USAID started putting out Requests for Proposal (RFPs). That’s the business that we are in. And we have been working here ever since.
Q. How does the selection process work for bidders on USAID contracts?
A. Each [USAID] mission has a contracting officer, either a resident, as is the case [in Ukraine], or a non-resident in a neighboring country. The contracting officer manages the process. He or she is a professional in the field. The contracting officers work in a very precise way – they must comply with U.S. Federal Acquisitions Regulations (FAR).
Those regulations are contained in a very thick book and very detailed. Contracting officers follow these guidelines. Part of the process is providing for the establishment of a board called the Technical Evaluation Committee (TEC).
It is up to the contracting officer and mission director, or their delegate, to decide on the composition [of the Selection Committee]. USAID officials are always represented on the committee, sometimes by local USAID officials, or Foreign Service nationals, Ukrainians employed by USAID …
… The members of the TEC have the distinct pleasure of reading a number of thick documents, which are the $50,000 proposals we write. Committee members read only the technical portion of these proposals, which are divided into two parts: the technical portion and the [budget] costs – prices, in other words …
… The committee selects those proposals which are good enough to have a chance – the rest are told to try again another time. Then begins a process of going back and forth between the bidders who remain. ‘We don’t like this and this about your proposal, can’t you do better?’ …
… Finally, the contracting officer will say, ‘Ok, give us your best and final offer.’ Then you put in your last bid and pray. The committee and the contracting officer decide who should get the contract, but the contracting officer makes the final decision.
Q. How would you evaluate Chemonics’ success in competing for USAID contracts in Ukraine?
A. We have had reasonable success in Ukraine. I don’t know our actual batting average here since I do not remember those contracts we have not won. Typically, a good company like Chemonics will win one out of three.
Q. Who supervises and evaluates contracts?
A. When there is a contract there is a lot of day-to-day supervision. There is also at least one, sometimes two, outside evaluations. Usually, it is a smaller firm that specializes in evaluations. They come out and do a very thorough evaluation of the project’s design and implementation and evaluate the performance of everyone involved in the project, including USAID.
Q. Are you bidding for other contracts here in Ukraine?
A. We are currently bidding, or preparing a proposal, for a contract in the agricultural area in response to a USAID Request for Proposals.
