Under the largest-ever contract awarded by USAID, in 2015 under the Obama Administration, Chemonics International failed to consistently deliver life-saving drugs and medical supplies “on time and in full,” in U.S. global health programs in 2016 and 2017. This failure was the focus of a House global health subcommittee hearing chaired by Congressman Chris Smith (R-NJ) on Thursday.

     “By holding today’s hearing, this subcommittee is fulfilling its obligation to the American taxpayers to conduct vigorous oversight of our global health programs in order to ensure that U.S. taxpayer dollars are being used properly and efficiently to deliver aid to rightful beneficiaries,” Rep. Smith, Chairman of the House Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations, stated at the subcommittee hearing on “Global Health Supply Chain Management: Lessons Learned and Ways Forward.” (To read excerpts of Chairman Smith’s remarks at the hearing, click here)

     Chemonics International, a global development company, was awarded a $9.5 billion contract by USAID in 2015 for the procurement and delivery of medicine and medical supplies for U.S. global health programs that treat AIDS, Ebola, Zika, and other viruses, as well as international maternal and child health programs. It is the largest contract ever awarded by the agency.

To watch the hearing click here or on the video below. (Note: Slide the red bar below back to approx. the 1 p.m. start time of the hearing. There is a break for several roll call votes beginning at about 1:13 p.m., with the hearing resuming at about 2:20 p.m.)

     Yet on-time deliveries of medicine and medical supplies in global health programs where Chemonics was involved fell from 84 percent in 2016 to 31 percent in 2016, and by the first quarter of 2017 only seven percent of drugs and medical supplies were delivered “on time and in full.”

     “This absolutely unacceptable delivery record resulted in part from poor data quality, weak inventory management and distribution practices and poor planning. Moreover, while hindsight is 20/20, one cannot but question what justified certain assumptions USAID made when it selected Chemonics,” Smith stated.

     Officials from USAID and the State Department’s Global AIDS Coordinator testified at the hearing on what was learned from the awarding of the contract and its implementation.  

     Irene Koek, Senior Deputy Assistant Administrator at the Global Health Bureau at USAID, said that the agency has been holding Chemonics accountable for the delivery delays and that the delivery rate has improved, although not to the level stipulated by the contract.

     “We identified performance issues with the GHSC-PSM contract early, and held Chemonics accountable, which has led to improvements in performance,” Koek said. “We have worked diligently to mitigate the impact the poor performance had on those whom we serve. We will not relax our oversight in ensuring that no patient is at risk. We are holding Chemonics and its partners accountable for continued improvements to reach and sustain their contractual goals of at least 80 percent OTD and OTIF.” (To read Ms. Koek’s full testimony, click here)

     “A high-performing supply chain is the lifeblood of our efforts. We must ensure that the right commodities reach the right people, in the right places, and at the right time,” Ambassador Deborah L. Birx, M.D., U.S. Global AIDS Coordinator and the U.S. Special Representative for Global Health Diplomacy at the State Department, stated in her testimony.

     “This is why I am deeply concerned about the recent supply chain challenges that bring us here today. Suffice it is to say, there are a number of things that have not gone well in this regard. Some of these have been fixed but others still need to be urgently addressed,” Birx said. (To read Ambassador Birx’s full testimony, click here)