For WFP, prepositioning food aid in overseas and domestic  warehouses shortened delivery time frames by an average of almost a  month. In addition, diversion of  emergency food aid from the prepositioning process shortened delivery  time frames by, on average, about 2 months for WFP and the other  sponsors. For Other Cooperating Sponsors, Prepositioning Food Aid Shortened Average Delivery Time Frame by More than 2 Months

We estimated, using statistical modeling to control for various factors, that  prepositioning food aid commodities in overseas and domestic  warehouses in fiscal years 2007 through 2012 saved an average of about  67 days for nine of USAID’s cooperating sponsors, compared with  USAID’s standard shipping process. In contrast, for  standard shipments of emergency food aid, USAID transports the food  directly from U.S. ports to recipient countries. USAID Generally Paid Higher Prices for Domestically Prepositioned Commodities Than for Standard Shipment Commodities

In fiscal years 2007 to 2012, USAID generally paid higher weighted  annual average prices for commodities that it purchased for domestic  prepositioning than for similar commodities that it purchased for standard  shipping. For  example, limited commodity supply and limited numbers of suppliers for  domestic prepositioning purchases are two possible factors, according to  U.S. officials and commodity vendors whom we interviewed. USAID Does Not Systematically Monitor Prepositioning to Maximize Time Savings and Cost Effectiveness

USAID has taken some steps to evaluate timeliness and costs associated  with prepositioning. USAID Does Not Collect and Assess Data Needed to Systematically Monitor Delivery Time Frames for Prepositioned Commodities

Although USAID’s goal for prepositioning is to improve the timeliness of  emergency food aid, USAID does not collect or assess data needed to  systematically monitor delivery time frames for prepositioned emergency  food aid shipments. Limitations in some data from several other cooperating  sponsors. USAID Does Not Systematically Monitor the Total Cost of Prepositioning to Maximize Cost Effectiveness

Although USAID collects data on the cost of its international food aid  programs, it does not use these data to systematically monitor the total  cost of prepositioning in order to maximize the program’s cost  effectiveness. According to USAID’s Automated Directives System, the  agency should collect and analyze data to make necessary program  adjustments and to guide higher-level decision making and resource  allocation. Such data could also help USAID assess the tradeoffs  between prepositioning’s timeliness and its additional warehouse,  shipping, and commodity costs. Recommendations for Executive Action

To strengthen USAID’s ability to help ensure that its food aid  prepositioning program meets the goal of reducing delivery time frames in  a cost-effective manner, we recommend that the USAID Administrator  take the following three steps to systematically  1.  collect, and ensure the reliability and validity of, data on delivery time  frames for all emergency food aid shipments, including prepositioned  food aid shipments;  2.  monitor and assess data on delivery time frames for prepositioned  food aid shipments; and  3.  monitor and assess costs associated with commodity procurement,  shipping, and storage for prepositioned food aid shipments. In its comments, USAID concurred with our  recommendations. In addition, USAID stated that it is working to identify  actions needed to ensure the collection of reliable data on delivery time  frames for all emergency food aid. Appendix I: Objectives, Scope, and Methodology

We examined (1) the effects of USAID’s prepositioning on delivery time  frames for emergency food aid shipments, (2) the effects of prepositioning  on the costs of emergency food aid, and (3) the extent to which the  agency monitors prepositioning to manage program resources effectively. In  addition, the data indicate whether the shipment was diverted. World Food Program: Stronger Controls Needed in High-Risk Areas.
Why GAO Did This Study

Through Title II of the Food for Peace Act, the United States provides U.S. agricultural commodities to meet emergency food needs in foreign countries. In fiscal years 2007 to 2012, USAID delivered $9.2 billion in emergency food aid to recipient countries through cooperating sponsors. In 2000, Congress authorized USAID to order, transport, and store food for prepositioning in both overseas and domestic locations. Through prepositioning, the agency orders food before it is requested and stores it in warehouses in or near regions with historically high needs.
GAO was asked to examine U.S. international food aid procurement. This report examines (1) the effects of prepositioning on emergency food aid delivery time frames, (2) the effects of prepositioning on the costs of the food aid, and (3) the extent to which the agency monitors prepositioning to maximize time savings and cost effectiveness. GAO analyzed data on delivery time frames and costs; reviewed agency documents; and interviewed agency officials and representatives from WFP, other cooperating sponsors, and ocean freight contractors.

What GAO Found

The U.S. Agency for International Development (USAID) reduces the average delivery time frame for emergency food aid by prepositioning food domestically—that is, in warehouses in the United States—and overseas. GAO estimates that compared with USAID's standard shipping process, which can take several months, prepositioning food aid shortened delivery time frames by an average of almost a month for shipments to the World Food Program (WFP). GAO also estimates that prepositioning shortened delivery time frames by an average of more than 2 months for other organizations—“cooperating sponsors”—that receive USAID grants. In addition, USAID reduces delivery time frames when it diverts shipments en route to overseas prepositioning warehouses to areas with immediate needs. For all cooperating sponsors, GAO estimates that diversions saved, on average, about 2 months.
Prepositioning food can increase the cost of emergency food aid because of additional warehouse, shipping, and commodity costs. For example, in fiscal year 2012, USAID paid approximately $8 million for its overseas and domestic prepositioning warehouses. USAID also paid $13 million to ship food by ocean freight from overseas prepositioning warehouses to recipient countries, in addition to the cost of shipping from the United States to the warehouses. Further, USAID generally paid higher weighted annual average prices for domestically prepositioned commodities than for standard shipment commodities. U.S. officials and vendors noted that factors such as limited commodity supplies and few participating suppliers may have contributed to higher prices.
USAID has taken some steps to evaluate prepositioning, but the agency does not collect and analyze data needed to systematically monitor delivery time frames for prepositioned commodities. In addition, some available data are unreliable. Further, USAID does not systematically monitor the total cost of prepositioning. According to USAID policy and federal internal control standards, the agency should monitor its programs by collecting and analyzing data to guide higher-level decision making and allocate resources. Without such monitoring, USAID is limited in its ability to assess prepositioning's impact on delivery time frames and costs and to maximize emergency food aid's timeliness and cost effectiveness.

What GAO Recommends

GAO recommends that USAID systematically collect, and ensure the reliability of, data for prepositioned food aid and systematically monitor and assess the effectiveness of food aid's delivery time frames and costs. USAID concurred with the recommendations and is working to improve both the collection of reliable data and its monitoring of prepositioning.