Coming to AID's Aid

o Rep. Michael Turner, it sounded like John Marshall was making excuses, and the Ohio Republican wasn't buying them. "When we are dealing in an environment where every day the question comes up-'How is the United States perceived in foreign countries?'-the concept that your answer would be, 'We're too busy to plan to be effective,' is, I think, shocking and disserving," he told Marshall, the head of management at the U.S. Agency for International Development, at a congressional hearing last fall.

Marshall had a sharp and frank response of his own: "We've had so many mandates and so little funding, we're always robbing Peter to pay Paul," he said. "It's a matter of priorities, but in our agency everything is urgent and everything is a priority." Marshall outlined AID's many challenges in overseeing development contracts in Iraq and Afghanistan and pleaded with Congress to provide more funding.

The exchange with Turner was just one of many tough moments Marshall has endured since taking over management of AID in December 2001-and one of many occasions where he has held his own. After a decade in which members of Congress stripped AID of much of its funding and personnel, it's ironic that they now are looking for the agency to work miracles. But that is exactly what is happening, and Marshall finds himself in the daunting role of miracle worker, charged with rebuilding an agency where virtually every management system was in disarray when he arrived in December 2001.

Marshall, who was an aide to Sen. Ted Stevens, R-Alaska, when Stevens headed the Governmental Affairs Committee, joined IBM's consulting practice in 1997 and worked on a project for AID during 1997-98. In 2001, the agency's administrator, Andrew Natsios, asked him if he would consider joining AID full time.

Marshall had been advising the agency on how to fix one of its more alarming management disasters in recent memory: the demise of a $100 million software system designed in the 1990s to help the agency oversee its development contracts. Marshall helped the agency salvage what it could and launch a new system-one that actually works-last year. Partly as a result, AID received a clean financial audit in 2003 for the first time.

But Marshall faces his biggest challenge in the area of human resources. During the 1990s alone, nearly 40 percent of AID's employees either left and were not replaced, or were laid off during a 1995 reduction in force. In 2000, AID bottomed out at 1,950 employees.

Today, the agency relies on for-profit contractors and nongovernmental charitable organizations to carry out its development work overseas. But the agency's staffing problems and tiny training budget have hampered its ability to oversee their work.

Enter Marshall. "It didn't take him very long to identify the antiquated systems that the agency had," says Alan Chvotkin, senior vice president of the Professional Services Council, a trade group that represents AID contractors. Among the most significant reforms was a move to simplify AID's procurement process by reducing the number of different contract models that the agency uses. Marshall and Natsios also have taken steps to boost competition by lowering barriers to small businesses interested in AID contracts, Chvotkin says.

And after years of budget cutbacks forced the agency to stop planning for future workforce needs, Marshall has launched a pilot project to study the strengths and weaknesses of AID's global health, procurement and human resources staffs. He is looking at which skills the agency needs, the gap between the skills and those of the existing workforce, and the steps the agency could take to close the gap. The plan is ultimately to repeat that process for the entire AID workforce. This year, AID wrested $10 million from Congress to start rebuilding its training program.

A study of AID's staff allocation last year prompted the agency to move about 20 foreign service officers from overstaffed Latin American missions to Asia and the Near East. Marshall also has taken steps to develop a "surge capacity" to help the agency respond to sudden needs, such as the reconstruction of Iraq, by assembling a list of ready-and-willing contractors and retired foreign service officers who can be called on at short notice.

Finally, Marshall has reached out to both the for-profit contractors and the charitable groups with which the agency works closely and who often vie for pieces of the agency's funding. He has held "partner days" to assuage their concerns and discuss management reforms.

"The signs of progress are there," Marshall says. But as he told Turner last year, "Rome wasn't built in a day . . . and the turnaround of an organization in the state of dysfunction that USAID was and has been doesn't happen overnight either. This is a four- or five-year project to turn around the agency."