Chemonics International
Founded1975 (1975)[1]
FounderThurston F. (Tony) Teele[1]
Headquarters1275 New Jersey Avenue SE,
Washington, D.C.
,
United States[2]
Areas served
  • Africa
  • Asia
  • Europe
  • Latin America and the Caribbean
  • Middle East
[3]
Key people
US$1.5 billion (FY2019)[9]
Websitechemonics.com

Chemonics International, Inc. is a private international development firm based in Washington, D.C. It was established in 1975 by Thurston F. (Tony) Teele as a subsidiary of Erly Industries. The employee-owned company offers a variety of services globally and with more than $1.5 billion in USAID contracts in 2019 is the largest for-profit recipient of U.S. government foreign aid.[10][9] As of 2019 the company has approximately 5,000 employees in 100 countries.

Overview

Chemonics, established in 1975 as a subsidiary of Erly Industries,[11] is an employee-owned, for-profit corporation based in Washington, D.C.[3] The international development and consulting firm has received some of the U.S. government's largest aid contracts supporting agriculture, conflict and crisis, democracy, economic development, education, energy, governance, health care and supply chain, international trade, microfinance, sustainability, water, welfare reform, and youth programs.[3][12][13] It has received some of the U.S. government's largest aid contracts and has been labeled a Beltway Bandit.[14][15][16]

According to Devex, the firm offers capacity building, communications, corporate social responsibility, knowledge management, performance management and appraisal, and program design services, and has worked on projects in more than 150 countries throughout Africa, Asia, Europe, Latin America and the Caribbean, and the Middle East.[3] Funders have included the Overseas Private Investment Corporation, United Nations Development Programme, U.S. Agency for International Development (USAID), U.S. Trade and Development Agency, U.K. Department for International Development and World Bank.[17][18]

As of December 2018, the firm has offices in downtown Washington, D.C., and Crystal City, Arlington, Virginia, and plans to relocate headquarters to a building under construction in Navy Yard.[19][20] Chemonics employs approximately 1,200 people in Washington, D.C., and Crystal City, as of December 2018.[21] In 2019, Chemonics established an office in London, United Kingdom, to increase its aid work with the UK's Department for International Development and Foreign and Commonwealth Office.[22] As of 2019, there were approximately 5,000 employees in 100 countries.[22] Susanna Mudge chairs the board of directors.[4][5] Jamey Butcher serves as president and chief executive officer (CEO).[6][7] The company has said 63 percent of its employees in Washington, D.C., are women, and 39 percent are racial minorities.[21]

History

1970s–2000s

Chemonics was established as a subsidiary of Erly Industries in 1975 by Thurston Teele,[23] with support from Gerald D. Murphy, the parent company's CEO and largest shareholder.[11] According to Murphy, he started Chemonics because "I've always wanted a way to do two things: one, have my own C.I.A., and two, be helpful to people."[11] Teele served as the first president of Chemonics until 2002, when he became chairman of the board of directors.[24]

In 1993, The New York Times said the company received 98 percent of its revenue in the form of agency contracts and increased revenues four-fold over the past decade.[11] Chemonics was awarded a $5 million, three-year contract in 1995 to manage the creation of Ukraine's Agricultural Commodity Exchange. In 1997, the company received funding to continue co-managing a privatization project for non-farm land in Ukraine. Chemonics reportedly earned contracts valued at $97 million in 1997 and $58 million in 1998.[17] The company received US$15 million from the USAID between 1996 and 2003.[25]

In mid-2002, the company was awarded a $2.9 million contract to hire 3,000 locals to repair acequia and roads in Afghanistan's Shomali Plain.[23] In Haiti, during the 2000s, Chemonics worked on agriculture programs, the Famine Early Warning Systems Network, and the "WINNER" project, which promotes the farming of Jatropha curcas to serve as biofuel.[26] In 2008, an audit by USAID's Office of Inspector General (OIG) found that the results of Chemonics' $62 million contract in Afghanistan "fell considerably short" of the intended impact,[12] and buildings constructed by subcontractors had significant construction defects.[27] Chemonics said the audit "provided an incomplete picture".[12]

During the 2000s, Ashraf Rizk was president and CEO prior to Richard Dreiman.[28][29] Chemonics ranked number 70 in Washington Technology's 2009 list of the "top 100" largest government contractors based on revenue for the 2008 fiscal year and had approximately 3,200 employees at the time.[29]

2010s

Chemonics ranked number 51 in Washington Technology's "top 100" list in 2010.[30] The following year, Chemonics became 100 percent employee-owned through its employee stock ownership program.[31]

The U.S. Department of Labor charged the company with discrimination against qualified African-American job candidates. As part of the settlement, Chemonics agreed to pay nearly $500,000 in damages to 124 job applicants,[21] hired eight of the candidates,[12] corrected hiring software problems, and implemented a diversity program.[19] The company also agreed to sponsor four or more diversity events organized by nonprofit groups and create a training program for local high school students as part of the Summer Youth Employment Program.[21] Chemonics denied liability as part of the settlement and attributed the pattern of discrimination to a manual application system.[32]

In 2012, Chemonics came under scrutiny by USAID's OIG for their work in Haiti after the 2010 earthquake. Chemonics was the largest single recipient of post-earthquake funds from USAID, receiving over $196 million in contracts,[33] many of which were "no-bid".[21][34] Audits specifically cited Chemonics lack of a comprehensive monitoring and evaluation plan and that "some of the performance indicators Chemonics developed were not well-defined."[35] Chemonics also spent more than 75 percent of program budgets on material and equipment when an expenditure of only 30 percent was planned.[36] Chemonics responded, saying that reports, assessments, and the final third-party evaluation of USAID's earthquake recovery program revealed that claims of failure in Haiti were exaggerated.[37]

An Inspector General's report also found that local communities were not sufficiently involved with Chemonics' work, and stated "Chemonics used contractors from Port-au-Prince to implement a number of activities in Cap-Haitien and Saint-Marc; these contractors brought their own people to do the jobs instead of hiring locals."[35] When locals were required by USAID, Chemonics' policies "limited the transparency of the selection process and increase the risk of corruption or favoritism by granting decision-making authority to a few individuals."[36] Chemonics responded, stating that more than 90 percent of the staff on USAID's two largest Chemonics-implemented programs were Haitian and that the company had awarded $96.3 million in grants and subcontracts directly to Haitian organizations over a five-year period.[37]

Chemonics received USAID funding in early 2014 to operate the Sindh Reading Programme to improve literacy in Sindh, Pakistan.[38] The company had received $501.7 million from USAID by November 2014.[13] Chemonics worked with USAID to help three coastal cities in Mozambique adapt to climate change.[39] As part of the work, Chemonics and USAID constructed model homes to teach residents about low-cost solutions to protect homes during storms.[39]

Through USAID, Chemonics has supported the White Helmets, a volunteer organization formed during the Syrian Civil War and operating in parts of rebel-controlled Syria and in Turkey.[12][40] Funding from USAID and the Partnership Initiatives in the Niger Delta allowed Chemonics to operate the Strengthening Advocacy and Civic Engagement governance project in Nigeria from 2014 to 2018.[41] In 2015, USAID awarded Chemonics a $9.5 billion, eight-year IDIQ contract, the agency's largest award to date.[3][12] The contract funds health supply chain programs to prevent and treat HIV/AIDS, malaria, and tuberculosis.[13] In 2017, Devex reported that only 7 percent of the health commodity shipments delivered through the program arrived "on time and in full".[42] Chemonics acknowledged the challenges, saying it undertook a "foundational change," by restructuring "how the project itself functioned from a management perspective".[43] In Year 4, October 1, 2018 through September 30, 2019, 85 percent of health commodity shipments were delivered on time and in full. During that same period the project procured nearly $544 million and delivered almost $699 million in drugs, diagnostics, and other health commodities.[44]

USAID also awarded a $37 million contract for Chemonics to operate the "Promote" program in Afghanistan, which seeks to help women find employment in the civil society, private, and public sectors; in 2018, the Special Inspector General for Afghanistan Reconstruction criticized USAID for results achieved to date.[45] Expending nearly $90 million in taxpayer funding over three years, the program placed just 55 women in Afghan government jobs.[45]

In 2016, Chemonics launched the Blockchain for Development Solutions Lab, becoming the first U.S. international development company to develop blockchain technology. The lab aims to support financial inclusion and make business processes more efficient.[46] Chemonics was the leading contractor for USAID in 2016.[47] The firm ranked number 44 and number 28 in Washington Technology's 2016 and 2017 lists of "Top 100 Contractors".[48][49][50] The company ranked number 19 on Washington Technology's "top 100" list in 2018 and reportedly earned contracts valued at $1.613 billion.[51] It was awarded a 2018 Industry Innovator award for its Blockchain for Development Solutions Lab.[52] Chemonics partnered with Arizona State University to incorporate minimasters programming into staff training and development.[53]

In 2018, the Council of the District of Columbia approved a $5.2 million property tax break for Chemonics' headquarters relocation,[54] despite opposition by member Elissa Silverman who objected to the company's troubled history of discriminatory hiring.[19][55] Two years later, construction began.[56][57]

2020s

In June 2020, Chemonics was added to the defendant's list of a lawsuit that was previously filed in December 2019 against six other companies, including DAI, Louis Berger, among others, for allegedly paying bribes, or protection money, to the Taliban in a lawsuit brought by families of American victims. This claim relates to whether Chemonics may have violated the Anti-Terrorism Act which makes it illegal for any individual or entity to provide material support to terrorist groups like the Taliban.[58][59]

References

  1. 1 2 "Obituaries: Thurston F. 'Tony' Teele Consultant Firm Co-Founder". The Washington Post. 2005-04-02. p. B07. Retrieved 2014-01-20.
  2. ↑ Clabaugh, Jeff (April 9, 2019). "The Yards lands Chemonics as 1st major tenant for Phase 2". WTOP-FM. Retrieved February 14, 2019.
  3. 1 2 3 4 5 Orlina, Ezekiel Carlo (May 27, 2016). "Top USAID contractors for 2015". Devex. Retrieved February 12, 2019.
  4. 1 2 Igoe, Michael (April 2, 2020). "As offices shut, aid leaders work to minimize project disruption". Devex. Retrieved May 26, 2020.
  5. 1 2 "Our Board of Directors". Chemonics. Retrieved May 26, 2020.
  6. 1 2 Igoe, Michael (May 26, 2020). "Q&A: How Chemonics went from corrective action to commercial solutions". Devex. Retrieved October 9, 2019.
  7. 1 2 "Our leadership". Chemonics. Retrieved May 26, 2020.
  8. ↑ "William Keller". Bloomberg.com. Bloomberg L.P. Retrieved February 13, 2019.
  9. 1 2 "CHEMONICS INTERNATIONAL, INC". USA Spending. US Government. Retrieved 14 October 2019.
  10. ↑ "TOP 40 VENDORS". USAID. Archived from the original on 22 June 2020. Retrieved 14 October 2019.
  11. 1 2 3 4 Henriques, Diana B.; Baquet, Dean (October 11, 1993). "Cozy Links to a U.S Agency Prove Useful to a Rice Trader". The New York Times. Retrieved February 12, 2019.
  12. 1 2 3 4 5 6 Schreiber, Melody (November 21, 2016). "Top US government aid partner to pay $500k damages to African American job applicants". The Guardian. Retrieved February 12, 2019.
  13. 1 2 3 Cohen, Rick (May 6, 2015). "Chemonics Int'l Scores Lion's Share of $10.5B USAID Contract Suite—Competition Complains". Nonprofit Quarterly. Retrieved February 12, 2019.
  14. ↑ Bender, Bryan (31 October 2003). "Study finds cronyism in Iraq, Afghanistan contracts - The Boston Globe". Boston Globe. Retrieved 3 September 2019.
  15. ↑ Wissing, Douglas A. (8 August 2016). Hopeless but optimistic : journeying through America's endless war in Afghanistan. Indiana University Press. p. 49. ISBN 978-0253022851. Retrieved 3 September 2019.
  16. ↑ Wolverson, Roya (24 November 2017). "BELTWAY BANDITS". Newsweek. Retrieved 24 November 2018.
  17. 1 2 "Q&A with Thurston Teele". Kyiv Post. October 7, 1999. Retrieved February 12, 2019.
  18. ↑ Villarino, Eliza (August 23, 2011). "Top DfID contractors: A primer". Devex. Retrieved April 22, 2019.
  19. 1 2 3 Giambrone, Andrew (December 19, 2018). "D.C. approves $26M in tax breaks for two large District-based companies". Curbed. Vox Media. Retrieved February 12, 2019.
  20. ↑ Sernovitz, Daniel J. (November 19, 2018). "Forest City finds an anchor tenant for The Yards' next phase, with nearly $6M in help from D.C." Washington Business Journal. American City Business Journals. Retrieved February 12, 2019.
  21. 1 2 3 4 5 Ryals, Mitch (December 7, 2018). "Will D.C. Give Millions in Tax Cuts to a Company With a Record of Racially Discriminatory Hiring Practices?". Washington City Paper. Retrieved February 12, 2019.
  22. 1 2 Edwards, Sophie (June 6, 2019). "Chemonics lands in London". Devex. Retrieved June 13, 2019.
  23. 1 2 Hodge, Nathan (February 15, 2011). Armed Humanitarians: The Rise of the Nation Builders. Bloomsbury Publishing USA. p. 34. ISBN 9781608190171. Retrieved February 12, 2019.
  24. ↑ "Obituaries: Thurston F. "Tony" Teele". The Washington Post. April 2, 2005. Retrieved February 12, 2019.
  25. ↑ Burron, Neil A. (March 3, 2016). The New Democracy Wars: The Politics of North American Democracy Promotion in the Americas. Routledge. ISBN 9781317022923. Retrieved February 12, 2019.
  26. ↑ Dearing, Stephanie (July 26, 2010). "Development and Aid in Haiti: Looking into the shadows Part I". Digital Journal. Retrieved February 12, 2019.
  27. ↑ "Audit of USAID/Afghanistan's Human Resources and Logistical Support Program" (PDF). Office of Inspector General, U.S. Agency for International Development. March 31, 2010. Retrieved February 12, 2019.
  28. ↑ "6 Afghans slain in highway ambush". NBC News. Associated Press. May 19, 2005. Retrieved February 13, 2019.
  29. 1 2 "70 : Chemonics International Inc". Washington Technology. 2009. Retrieved February 13, 2019.
  30. ↑ Hubler, David (June 1, 2010). "Contractors find fertile fields abroad". Washington Technology. Retrieved February 13, 2019.
  31. ↑ Elsdon, Ron (2013). Business Behaving Well: Social Responsibility, from Learning to Doing. Potomac Books.
  32. ↑ Schreiber, Melody (November 21, 2016). "Top US government aid partner to pay $500k damages to African American job applicants". The Guardian. Retrieved November 21, 2016.
  33. ↑ Johnston, Jake; Main, Alexander (April 2013). "Breaking Open the Black Box: Increasing Aid Transparency and Accountability in Haiti" (PDF). Center for Economic and Policy Research. Retrieved February 12, 2019.
  34. ↑ Mendoza, Martha (December 12, 2010). "Outsourcing quake assistance: Haitian contractors get only 1.6% of U.S. aid". Cleveland.com. Advance Digital. Associated Press. Retrieved February 12, 2019.
  35. 1 2 "Audit of USAID's Haiti Recovery Initiative Activities Managed By Office of Transition Initiatives" (PDF). US Agency for International Development Office of Inspector General. 2012-09-26. Archived from the original (PDF) on 2016-11-24. Retrieved 2015-04-25.
  36. 1 2 "Audit of USAID's Cash-for-Work Activities in Haiti" (PDF). US Agency for International Development Office of Inspector General. 2010-09-24. Archived from the original (PDF) on 2016-03-04. Retrieved 2015-04-25.
  37. 1 2 Gurian, Rhett (May 13, 2014). "4 myths about US aid to Haiti". Devex. Retrieved July 31, 2019.
  38. ↑ Maqsood, Fawad (February 5, 2019). "30,000 out of schools children to be enrolled in Sindh". Business Recorder. Retrieved February 13, 2019.
  39. 1 2 Peters, Adele (March 22, 2019). "Low-cost resilient houses could help Mozambique survive future storms". Fast Company. Retrieved May 13, 2019.
  40. ↑ "White Helmets vows to continue despite 'US funding freeze'". Al Jazeera. May 5, 2018. Retrieved February 12, 2019.
  41. ↑ "PIND pushes for good governance as SACE clocks five". The Guardian. Lagos. November 9, 2018. Retrieved February 13, 2019.
  42. ↑ Igoe, Michael (August 25, 2017). "Exclusive: Documents reveal largest USAID health project in trouble". Devex. Retrieved April 22, 2019.
  43. ↑ Igoe, Michael (August 29, 2017). "Chemonics acknowledges 'challenges' with supply chain project, cites 'proactive steps'". Devex. Retrieved April 22, 2019.
  44. ↑ "GHSC-PSM 2019 Annual Report | USAID Global Health Supply Chain Program".
  45. 1 2 Donati, Jessica (September 14, 2018). "USAID's Largest Program for Afghan Women Is Falling Short, Watchdog Says". The Wall Street Journal. Retrieved February 12, 2019.
  46. ↑ Wakeman, Nick (November 7, 2018). "Inside the 2018 class of Industry Innovators". Washington Technology. Retrieved February 13, 2019.
  47. ↑ Orlina, Ezekiel Carlo (May 12, 2017). "Top USAID contractors for 2016". Devex. Retrieved February 12, 2019.
  48. ↑ "44: Chemonics International Inc". Washington Technology. Retrieved February 13, 2019.
  49. ↑ "28: Chemonics International Inc". Washington Technology. Retrieved February 13, 2019.
  50. ↑ "2018 Top 100". Washington Technology. Retrieved February 12, 2019.
  51. ↑ "19: Chemonics International". Washington Technology. Retrieved February 12, 2019.
  52. ↑ Wakeman, Nick (November 7, 2018). "Inside the 2018 class of Industry Innovators". Washington Technology. Retrieved April 22, 2019.
  53. ↑ Smith, Emma (June 13, 2019). "How this organization supported staff development through minimasters". Devex. Retrieved June 13, 2019.
  54. ↑ Arcieri, Katie (December 18, 2018). "Chemonics, EAB Global score tax breaks from D.C. Council". Washington Business Journal. Retrieved February 13, 2019.
  55. ↑ Arcieri, Katie (December 17, 2018). "Proposal floated to kill proposed tax break to support Chemonics' move to The Yards". Washington Business Journal. Retrieved February 13, 2019.
  56. ↑ Banister, Jon (February 27, 2020). "Brookfield Kicks Off Next Phase Of The Yards With Chemonics Groundbreaking". Bisnow. Retrieved May 26, 2020.
  57. ↑ Ford, Sam (February 27, 2020). "The city within a city: How much The Yards of DC has changed in 15 years". WJLA-TV. Retrieved May 26, 2020.
  58. ↑ Donati, Jessica (June 8, 2020). "Lawsuit Accusing Contractors of Paying Protection Money to Taliban Is Expanded". Wall Street Journal. Retrieved June 8, 2020.
  59. ↑ FARRICK, RYAN J. (June 10, 2020). "Updated Lawsuit Says U.S. Companies Paid Off Taliban to Keep Contracts Active". LegalReader.com. Retrieved June 10, 2020.
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