Eastern Europe: AID's Indefinite Contracts Assist Privatization Efforts
but Lack Adequate Oversight (Letter Report, 01/19/94, GAO/NSIAD-94-61).

The Agency for International Development's (AID) indefinite quantity
contracts have proven effective in responding to Eastern Europe's needs
for technical assistance on privatization.  Host government officials,
although concerned about the contracting process and their lack of
involvement in monitoring performance, have found the contractors' work
to be generally satisfactory and have valued the advice and services
received so far.  Indefinite quantity contracts also appear to compare
favorably with other donors' privatization programs in terms of their
cost and responsiveness.  Although GAO found no evidence that host
governments played a role in AID's selection of the contracting
mechanism and the three contractors, the host governments have been
working closely with the contractors to develop project task proposals.
These relationships raise questions about potential conflicts of
interest.  AID acknowledges these concerns but doubts that conflicts of
interest exist because AID staff must review and approve all proposals.
One significant area of weakness has been AID oversight of contractor
performance.  AID recognizes this shortcoming.  The Washington office,
however, has yet to take full advantage of AID's field staff to monitor
contractor performance.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-94-61
     TITLE:  Eastern Europe: AID's Indefinite Contracts Assist 
             Privatization Efforts but Lack Adequate Oversight
      DATE:  01/19/94
   SUBJECT:  Indefinite quantity contracts
             International cooperation
             Foreign economic assistance
             Technical assistance
             Foreign governments
             Contractor performance
             Contract monitoring
             Human resources utilization
             Conflict of interest
IDENTIFIER:  Europe
             Poland
             Czech Federal Republic
             Hungary
             Yugoslavia
             AID Enterprise Restructuring and Privatization Project
             Slovak Federal Republic
             Czechoslovakia
             
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