The Foreign Service Journal, April 2004

serve as program and project development officers, controllers, executive officers, and occasional- ly temporary mission directors — positions that USAID considers inherently governmental. Accord- ing to an agency study, about 160 such positions are currently filled by personal service contractors. The staffing problems of the 1990s have come home to roost in the last two years, says Natsios. “We don’t have enough officers to do the work,” he says. Even so, the agency has stretched its limited resources further in order to respond to the need for development aid in countries that have spawned terrorism. It has opened five new missions to cover Southeast Asia, Pakistan, Afghan- istan, Yemen and Iraq. “With no additional resources, we’ve been asked to let $1.7 billion in [contracts in] Iraq,” the agency’s chief procurement officer, Timothy Beans, said last year. That sum, by itself, amounts to almost half of what the agency has typically spent on development activities worldwide in recent years. And the sum keeps getting bigger as U.S. involvement in Iraq continues. A Drastic RIF and Its Legacy As preparedness goes, however, USAID didn’t help its own cause by mismanaging the downsizing of the 1990s, or by failing to take steps to revamp its con- tracting process. The agency basically stopped hiring during the entire decade, allowing attrition to dry up the pipeline of junior officers. But even that didn’t keep pace with the cuts to its operating budget imposed by Congress, according to Atwood. So in 1995, he says, USAID was forced to supplement the hiring freeze with a reduction-in-force, or layoffs. “We found that we didn’t have enough funds to cover the staff. … We just couldn’t make our budget,” says Atwood. As a result, 100 Foreign Service officers and 100 civil servants lost their jobs. Rather than targeting the staff cuts to hold onto the top Foreign Service officers and ensure a pipeline of future leaders, the agency opted for across-the-board cuts, says the GAO’s top USAID analyst, Jess Ford. The 1995 RIF led to an ugly age discrimination lawsuit that was ultimately settled by the Justice Department with a finan- cial settlement and the rehiring of some of the workers. In the end, a whole generation was lost. Among 2,200 USAID employees today, only 45 — or 2 percent — are under the age of 30. At the same time, 10 percent of the workforce is over the age of 60, while 48 percent is over 50. As the GAO emphasized in its report, “Increased attrition of U.S. direct hires since the reduction in force in the mid-1990s led to the loss of the most experienced Foreign Service officers, while the hiring freeze stopped the pipeline of new hires at the junior level.” Terrence Brown, former USAID assistant adminis- trator for management, says the agency did the best that it could. “When you go into a reduction-in-force, it is the most extreme management situation you can put yourself in. It means you don’t have the resources to pay your staff, and you can’t spend money you don’t have.” The RIF was “the last way out,” he says. He believes it was done as rationally as possible, given the situation. Some Foreign Service officers, however, still believe the RIF would not have been necessary if the agency hadn’t — at the same time Congress was reducing the budget — wasted about $100 million on a failed effort to upgrade the financial management computer system. USAID was then forced to spend even more money hiring IBM to study how the project went awry. In addition, many USAID officers believe that Atwood and Brown were anxious to demonstrate their proficiency as managers during the decade of government-wide downsizing spawned by then-Vice President Al Gore’s “Reinventing Government” initia- tive, says Bill Carter, a Foreign Service officer and USAID vice president on the American Foreign Ser- vice Association’s Governing Board. Still, Terrence Brown wishes it had never hap- pened. “The bottom line is that the agency needs more people,” he says. “There are functions that are inherently governmental. You need people to oversee contractors, to make decisions about the use of gov- ernment funding, to evaluate activities and develop F O C U S 36 F O R E I G N S E R V I C E J O U R N A L / A P R I L 2 0 0 4 As preparedness goes, however, USAID didn’t help its own cause by mismanaging the downsizing of the 1990s.