Friday, September 14, 2007
U.S. military awards $475 mn. security contract to British firm
Contracts
(Washington Post) - The U.S. military confirmed yesterday that it awarded the largest security contract in Iraq to a private British firm, Aegis Defence Services, in a deal worth up to $475 million over two years. Aegis won the high-stakes derby over six other contenders, said sources who spoke on condition of anonymity because of the confidential nature of the bidding process.
The deal, however, is being challenged by another British company that bid on the contract. Erinys Iraq is seeking an injunction from the U.S. Court of Appeals for the Federal Circuit to stop the Army from carrying out the contract. Erinys, which is also planning a separate appeal of the award to Aegis, had unsuccessfully sought to challenge the Army's decision in protests with the Government Accountability Office and the U.S. Court of Federal Claims.
Members of Congress, meanwhile, continue to raise questions about the use of foreign private security forces, such as Aegis, to protect U.S. commanders and soldiers. Federal lawmakers have requested that the GAO look into the use of private security contractors in Iraq. The Special Inspector General for Iraq Reconstruction also is conducting its second audit of Aegis, based on a request from a member of Congress who has expressed concerns about the firm's chief executive, Tim Spicer. He is a retired British military officer whose previous private military company, Sandline International, had been hired to quell insurgencies in countries such as Papua New Guinea and Sierra Leone.
"We are very pleased to receive this award, which we believe is a fine reflection of both our previous performance and our ongoing commitment to serve our client, the U.S. Army Corps of Engineers Gulf Region Division, to the best of our ability," Spicer said in a statement. Aegis holds the current contract, a three-year deal worth $293 million, to provide intelligence services to the Army and security for the Army Corps of Engineers on reconstruction work in Iraq.
While a military official in Baghdad confirmed Aegis as the contract winner, he did not elaborate; an announcement is expected soon. It was unclear yesterday why Aegis prevailed over what sources said was the other top contender, another British firm, ArmorGroup International. But over the past several months, sources said Aegis worked to show the military that it had a strong track record, stressing that none of its U.S. military clients had been killed in three years while traveling more than 3 million miles in Iraq. Sources also said Aegis underscored to the military that it made little sense to change contractors by bringing in another private firm to oversee a complicated security operation with offices throughout Iraq just as U.S. forces were seeking to scale back and eventually withdraw from the country.
Aegis was not the lowest bidder, but it was close in price to ArmorGroup's proposal, sources said. ArmorGroup, which is one of the largest security firms in Iraq, with more than 1,200 employees, tried to persuade the military that it was a better choice than Aegis in part by stressing its track record for protecting clients in Iraq, sources said. ArmorGroup spokesman Patrick Toyne-Sewell declined to comment.
ArmorGroup also tried to highlight some of the controversies involving Spicer and Aegis, sources said. After winning the first U.S. Army contract, Aegis quickly ran into problems. A special inspector audit found that the company failed to perform adequate background checks on some Iraqi employees. The company said it had just won the contract and immediately addressed the issue.
Erinys, which has about 1,000 employees in Iraq and provides security for some military personnel there under a separate contract, has maintained that the Army did not thoroughly review its proposal and failed to follow procurement rules. An attorney for Erinys declined to comment.
Members of Congress, meanwhile, continue to raise questions about the use of foreign private security forces, such as Aegis, to protect U.S. commanders and soldiers. Federal lawmakers have requested that the GAO look into the use of private security contractors in Iraq. The Special Inspector General for Iraq Reconstruction also is conducting its second audit of Aegis, based on a request from a member of Congress who has expressed concerns about the firm's chief executive, Tim Spicer. He is a retired British military officer whose previous private military company, Sandline International, had been hired to quell insurgencies in countries such as Papua New Guinea and Sierra Leone.
"We are very pleased to receive this award, which we believe is a fine reflection of both our previous performance and our ongoing commitment to serve our client, the U.S. Army Corps of Engineers Gulf Region Division, to the best of our ability," Spicer said in a statement. Aegis holds the current contract, a three-year deal worth $293 million, to provide intelligence services to the Army and security for the Army Corps of Engineers on reconstruction work in Iraq.
While a military official in Baghdad confirmed Aegis as the contract winner, he did not elaborate; an announcement is expected soon. It was unclear yesterday why Aegis prevailed over what sources said was the other top contender, another British firm, ArmorGroup International. But over the past several months, sources said Aegis worked to show the military that it had a strong track record, stressing that none of its U.S. military clients had been killed in three years while traveling more than 3 million miles in Iraq. Sources also said Aegis underscored to the military that it made little sense to change contractors by bringing in another private firm to oversee a complicated security operation with offices throughout Iraq just as U.S. forces were seeking to scale back and eventually withdraw from the country.
Aegis was not the lowest bidder, but it was close in price to ArmorGroup's proposal, sources said. ArmorGroup, which is one of the largest security firms in Iraq, with more than 1,200 employees, tried to persuade the military that it was a better choice than Aegis in part by stressing its track record for protecting clients in Iraq, sources said. ArmorGroup spokesman Patrick Toyne-Sewell declined to comment.
ArmorGroup also tried to highlight some of the controversies involving Spicer and Aegis, sources said. After winning the first U.S. Army contract, Aegis quickly ran into problems. A special inspector audit found that the company failed to perform adequate background checks on some Iraqi employees. The company said it had just won the contract and immediately addressed the issue.
Erinys, which has about 1,000 employees in Iraq and provides security for some military personnel there under a separate contract, has maintained that the Army did not thoroughly review its proposal and failed to follow procurement rules. An attorney for Erinys declined to comment.
Labels: Aegis Defense Services, Armorgroup, Erinys Iraq, GAO, GRD, Iraq, security contract, Tim Spicer, U.S. military, USACE
Friday, September 07, 2007
A summary of recent reports on the Iraq war
Reports
(AP) - Findings and recommendations by recent studies on the Iraq war:
The Independent Commission on the Security Forces of Iraq, chaired by retired Marine Corps Gen. James Jones, released Sept. 6:
-Iraq's security forces will be unable to assume control of the country without U.S. help in the next 12 to 18 months.
-Reduction of U.S. forces and handing off combat mission to Iraqis is "possible and prudent," and changes could begin in early 2008.
-The national police force is rife with corruption and infiltrated by militia forces and should be disbanded.
-An adequate logistics system to support the Iraqi army is at least two years away.
-On the Web: http://www.csis.org
The Government Accountability Office progress report on Iraq, released Sept. 4:
-Of its 18 stated political and security goals, Iraq failed to meet 11 of them with the least progress made on the political front.
-Iraq fully met three of the 18 goals: establishing joint security stations in Baghdad, ensuring minority rights in the Iraqi legislature and creating support committees for the Baghdad security plan.
-Violence remains high, and it is unclear whether sectarian-fueled attacks has decreased because it is too difficult to prove intent.
-The number of Iraqi security forces capable of conducting independent operations has declined, and militias remain armed.
-On the Web: http://www.gao.gov/new.items/d071195.pdf
White House progress report on Iraq, dated July 12:
-Of its 18 stated political and security goals, Iraq has made satisfactory progress on eight of them, including eliminating safe havens for outlaws and deploying three trained brigades to Baghdad.
-Judges Iraq has made unsatisfactory progress on nine benchmarks, including increasing the number of Iraqi security forces able to operate independently and passing major legislation believed critical to calming sectarian feuds.
-Judges that it is too early to judge Iraq's progress on two benchmarks: enacting amnesty legislation and establishing a program to disarm militias.
-On the Web: http://www.whitehouse.gov/nsc/iraq/2007/FinalBenchmarkReport.pdf
The National Intelligence Estimate on Iraq, released Aug. 23:
-Represented the most authoritative written judgments of all 16 spy agencies, with the Central Intelligence Agency and Defense Intelligence Agency as key contributors.
-Determined that the Iraqi government is strained by rampant violence, deep sectarian differences among its political parties and stymied leadership.
-Found Iraq's neighbors will continue to try to expand their leverage in the fractured state in anticipation that the U.S. will soon leave.
-Noted some security progress but elusive hopes for reconciliation among Iraq's feuding groups.
The Independent Commission on the Security Forces of Iraq, chaired by retired Marine Corps Gen. James Jones, released Sept. 6:
-Iraq's security forces will be unable to assume control of the country without U.S. help in the next 12 to 18 months.
-Reduction of U.S. forces and handing off combat mission to Iraqis is "possible and prudent," and changes could begin in early 2008.
-The national police force is rife with corruption and infiltrated by militia forces and should be disbanded.
-An adequate logistics system to support the Iraqi army is at least two years away.
-On the Web: http://www.csis.org
The Government Accountability Office progress report on Iraq, released Sept. 4:
-Of its 18 stated political and security goals, Iraq failed to meet 11 of them with the least progress made on the political front.
-Iraq fully met three of the 18 goals: establishing joint security stations in Baghdad, ensuring minority rights in the Iraqi legislature and creating support committees for the Baghdad security plan.
-Violence remains high, and it is unclear whether sectarian-fueled attacks has decreased because it is too difficult to prove intent.
-The number of Iraqi security forces capable of conducting independent operations has declined, and militias remain armed.
-On the Web: http://www.gao.gov/new.items/d071195.pdf
White House progress report on Iraq, dated July 12:
-Of its 18 stated political and security goals, Iraq has made satisfactory progress on eight of them, including eliminating safe havens for outlaws and deploying three trained brigades to Baghdad.
-Judges Iraq has made unsatisfactory progress on nine benchmarks, including increasing the number of Iraqi security forces able to operate independently and passing major legislation believed critical to calming sectarian feuds.
-Judges that it is too early to judge Iraq's progress on two benchmarks: enacting amnesty legislation and establishing a program to disarm militias.
-On the Web: http://www.whitehouse.gov/nsc/iraq/2007/FinalBenchmarkReport.pdf
The National Intelligence Estimate on Iraq, released Aug. 23:
-Represented the most authoritative written judgments of all 16 spy agencies, with the Central Intelligence Agency and Defense Intelligence Agency as key contributors.
-Determined that the Iraqi government is strained by rampant violence, deep sectarian differences among its political parties and stymied leadership.
-Found Iraq's neighbors will continue to try to expand their leverage in the fractured state in anticipation that the U.S. will soon leave.
-Noted some security progress but elusive hopes for reconciliation among Iraq's feuding groups.
Labels: GAO, Gen. James Jones, Iraq, National Intelligence Estimate, reports, White House progress report
Wednesday, August 15, 2007
Army to reopen bidding on $4.6 bn. Iraq translation services contract
Contracts
(Washington Business Journal) - The Army will reopen the bidding process on a five-year translation services contract awarded to DynCorp International Inc. last year for work in Iraq. The contract is worth more than $4.6 billion. L-3 Communications Holdings Inc., which had the contract before DynCorp, protested the bidding process. The General Accounting Office sided with L-3 Communications in March and ordered the Army to rebid the contract.
Global Linguist Services, a joint venture of Falls Church-based DynCorp and McNeil Technologies Inc., was awarded the contract Dec. 18. L-3 has continued to do the work under an extension granted in March for its original contract. "We are pleased that this procurement is moving forward in a serious manner that will address the concerns raised by the GAO [Government Accountability Office] and ensure a timely decision," DynCorp chief executive Herbert Lanese said in a statement. "We look forward to an expedited conclusion of this procurement."
The rebidding process will consider both companies' experience and ability to provide personnel on a timely basis. DynCorp had agreed to hire up to 6,000 local translators in Iraq and provide up to 1,000 more American linguists. DynCorp (NYSE: DCP) and L-3 (NYSE: LLL) have until Aug. 24 to resubmit bids.
Global Linguist Services, a joint venture of Falls Church-based DynCorp and McNeil Technologies Inc., was awarded the contract Dec. 18. L-3 has continued to do the work under an extension granted in March for its original contract. "We are pleased that this procurement is moving forward in a serious manner that will address the concerns raised by the GAO [Government Accountability Office] and ensure a timely decision," DynCorp chief executive Herbert Lanese said in a statement. "We look forward to an expedited conclusion of this procurement."
The rebidding process will consider both companies' experience and ability to provide personnel on a timely basis. DynCorp had agreed to hire up to 6,000 local translators in Iraq and provide up to 1,000 more American linguists. DynCorp (NYSE: DCP) and L-3 (NYSE: LLL) have until Aug. 24 to resubmit bids.
Labels: DynCorp International, GAO, Global Linguist Services, L-3 Communications Holdings Inc., McNeil Technologies Inc.
Monday, August 06, 2007
190,000 weapons missing in Iraq
Security
(BBC) - The US military cannot account for 190,000 AK-47 assault rifles and pistols given to the Iraqi security forces, an official US report says. The Government Accountability Office (GAO) says the Pentagon cannot track about 30% of the weapons distributed in Iraq over the past three years. The Pentagon did not dispute the figures, but said it was reviewing arms deliveries procedures.
About $19.2bn has been spent by the US since 2003 on Iraqi security forces. GAO, the investigative arm of the US Congress, said at least $2.8bn of this money was used to buy and deliver weapons and other equipment. Correspondents say it is now feared many of the weapons are being used against US forces on the ground in Iraq.
The GAO said weapons distribution was haphazard and rushed and failed to follow established procedures, particularly from 2004 to 2005.
MISSING IRAQ WEAPONS
AK-47 rifles: 110,000
Pistols: 80,000
Body armour pieces: 135,000
Helmets: 115,000
During this period, security training was led by Gen David Petraeus, who now commands all US forces in Iraq.
The GAO reached the estimate - 111,000 missing AK-47s and 80,000 missing pistols - by comparing the property records of the Multi-National Security Transition Command for Iraq against records maintained by Gen Petraeus of the arms and equipment he ordered.
Deputy Assistant Defence Secretary Mark Kimmitt told AFP the Pentagon was "reviewing policies and procedures to ensure US-funded equipment reaches the intended Iraqi security forces under the Iraq program". The report comes as a political battle rages in Washington over the progress of the war in Iraq.
Gen Petraeus and US Ambassador to Iraq Ryan Crocker are scheduled to report to Congress by mid-September on the success of efforts to halt sectarian violence and return Iraq to viable self-governance. Meanwhile, at the end of July, the US Defence Department admitted that the US-led coalition in Iraq had failed to deliver nearly two-thirds of the equipment it promised to Iraq's army.
The Pentagon said only 14.5m of the nearly 40m items of equipment ordered by the Iraqi army had been provided. The US military commander in charge of training in Iraq has asked for help in speeding up the transfer of equipment. Iraq's ambassador to the US said the delays were hindering the fighting capacity of its armed forces.
About $19.2bn has been spent by the US since 2003 on Iraqi security forces. GAO, the investigative arm of the US Congress, said at least $2.8bn of this money was used to buy and deliver weapons and other equipment. Correspondents say it is now feared many of the weapons are being used against US forces on the ground in Iraq.
The GAO said weapons distribution was haphazard and rushed and failed to follow established procedures, particularly from 2004 to 2005.
MISSING IRAQ WEAPONS
AK-47 rifles: 110,000
Pistols: 80,000
Body armour pieces: 135,000
Helmets: 115,000
During this period, security training was led by Gen David Petraeus, who now commands all US forces in Iraq.
The GAO reached the estimate - 111,000 missing AK-47s and 80,000 missing pistols - by comparing the property records of the Multi-National Security Transition Command for Iraq against records maintained by Gen Petraeus of the arms and equipment he ordered.
Deputy Assistant Defence Secretary Mark Kimmitt told AFP the Pentagon was "reviewing policies and procedures to ensure US-funded equipment reaches the intended Iraqi security forces under the Iraq program". The report comes as a political battle rages in Washington over the progress of the war in Iraq.
Gen Petraeus and US Ambassador to Iraq Ryan Crocker are scheduled to report to Congress by mid-September on the success of efforts to halt sectarian violence and return Iraq to viable self-governance. Meanwhile, at the end of July, the US Defence Department admitted that the US-led coalition in Iraq had failed to deliver nearly two-thirds of the equipment it promised to Iraq's army.
The Pentagon said only 14.5m of the nearly 40m items of equipment ordered by the Iraqi army had been provided. The US military commander in charge of training in Iraq has asked for help in speeding up the transfer of equipment. Iraq's ambassador to the US said the delays were hindering the fighting capacity of its armed forces.
Labels: GAO, General David Petraeus, Iraq, missing weapons, MNSTC-I, Pentagon, Ryan Crocker
Tuesday, July 31, 2007
British firms emerge as finalists for largest U.S. security contract in Iraq
Contracts, Reconstruction
(Washington Post) - Two British firms have emerged as finalists to win the largest U.S. security contract in Iraq, according to sources familiar with the matter. In what has become a contentious competition, Aegis Defence Services and ArmorGroup International are considered top contenders for a contract worth up to $475 million to provide intelligence services to the U.S. Army and security for the U.S. Army Corps of Engineers on reconstruction work in Iraq. Aegis won the initial contract in 2004, a three-year, $293 million deal.
The Army has eliminated another British firm, Erinys Iraq, but that company is contesting the decision in sealed documents filed in the U.S. Court of Federal Claims, said sources who spoke on condition of anonymity because the contract review process is confidential. It was unclear yesterday whether the Army had chosen other finalists, but two other firms confirmed that they, too, are out of the running -- Control Risks of Britain and Blackwater Security Consulting of North Carolina.
The battle for the lucrative contract has drawn the attention of members of Congress who have questioned the use of private security contractors, about 20,000 of whom operate in Iraq, and whether the military should be outsourcing such critical tasks as security and intelligence to private firms. Based on a request from a member of Congress, the Special Inspector General for Iraq Reconstruction is conducting its second audit of Aegis.
Meanwhile, federal lawmakers have requested that the Government Accountability Office, Congress's investigative arm, also look into the use of private security contractors in Iraq. The GAO has begun to review contractors there, building on previous reports, spokesman Paul Anderson said. "We're still early in the process."
"The Army's decision to once again remove Erinys from the bidding process is bad economics and demonstrates the fundamental flaws in this procurement," said an Erinys spokesman. "We are taking steps to ensure that our proposal is given fair treatment on a level playing field, in accordance with applicable government laws and regulations."
ArmorGroup spokesman Patrick Toyne Sewell declined to comment. ArmorGroup already is one of the largest security firms in Iraq, with more than 1,200 employees. Aegis, which also has about 1,200 contractors in Iraq, declined as well to comment on the new contract, but Kristi M. Clemens, the firm's executive vice president, touted its work on the current contract.
The Army is expected to make a final decision soon. "We are proceeding with discussions and preparation for award," said Chuck D. Martino, deputy chief of staff of the Joint Contracting Command-Iraq/Afghanistan in Baghdad.
The Army has eliminated another British firm, Erinys Iraq, but that company is contesting the decision in sealed documents filed in the U.S. Court of Federal Claims, said sources who spoke on condition of anonymity because the contract review process is confidential. It was unclear yesterday whether the Army had chosen other finalists, but two other firms confirmed that they, too, are out of the running -- Control Risks of Britain and Blackwater Security Consulting of North Carolina.
The battle for the lucrative contract has drawn the attention of members of Congress who have questioned the use of private security contractors, about 20,000 of whom operate in Iraq, and whether the military should be outsourcing such critical tasks as security and intelligence to private firms. Based on a request from a member of Congress, the Special Inspector General for Iraq Reconstruction is conducting its second audit of Aegis.
Meanwhile, federal lawmakers have requested that the Government Accountability Office, Congress's investigative arm, also look into the use of private security contractors in Iraq. The GAO has begun to review contractors there, building on previous reports, spokesman Paul Anderson said. "We're still early in the process."
"The Army's decision to once again remove Erinys from the bidding process is bad economics and demonstrates the fundamental flaws in this procurement," said an Erinys spokesman. "We are taking steps to ensure that our proposal is given fair treatment on a level playing field, in accordance with applicable government laws and regulations."
ArmorGroup spokesman Patrick Toyne Sewell declined to comment. ArmorGroup already is one of the largest security firms in Iraq, with more than 1,200 employees. Aegis, which also has about 1,200 contractors in Iraq, declined as well to comment on the new contract, but Kristi M. Clemens, the firm's executive vice president, touted its work on the current contract.
The Army is expected to make a final decision soon. "We are proceeding with discussions and preparation for award," said Chuck D. Martino, deputy chief of staff of the Joint Contracting Command-Iraq/Afghanistan in Baghdad.
Labels: Aegis Defense Services, Armorgroup, Blackwater Security Consulting, Chuck D. Martino, contracts, Control Risks, Erinys Iraq, GAO, Iraq, Iraq reconstruction, USACE
Thursday, July 19, 2007
Defense contractors challenge LOGCAP IV award, seek stay from GAO
Contracts
(Government Executive) - Faced with the prospect of missing out on the Army's most lucrative logistics contract in Iraq, a pair of teams of defense contractors is challenging the service's decision to award the work to three rival companies. Last week, Contingency Management Group LLC, a team composed of AECOM Government Services, Shaw Group and PAE Government Services, filed a protest with the Government Accountability Office, claiming that the Army's Sustainment Command improperly evaluated the group's proposal for the Logistics Civil Augmentation Program (LOGCAP) IV contract. The team is seeking a stay of the new contract until GAO can review the July 11 protest.
Two days later, IAP Worldwide Services Inc., a Cape Canaveral, Fla., contractor, filed its own protest, also citing improper technical or price evaluations, according to Michael Golden, GAO's chief procurement attorney. IAP led a team of contractors that included industry giants Lockheed Martin, CACI and Blackwater. Officials with Contingency Management Group and IAP both declined to discuss the reasons for the protest.
The Army awarded its mammoth 10-year LOGCAP IV contract last month to three firms: the incumbent contractor, Kellogg, Brown and Root Services of Houston; former contract holder DynCorp International LLC of Fort Worth, Texas; and Fluor Intercontinental Inc. of Greenville, S.C. The three companies are each capped at $5 billion per year, although the Army does not expect the firms to reach the maximum value in any given year.
A fourth contractor, Serco Inc. of Vienna, Va., was awarded a $225 million support contract last February. The Army says Serco will assist in its planning and provide independent cost estimates, but will not play any oversight role or conduct any inherently governmental work.
In an e-mailed statement, KBR deferred questions about the protests to the Army, stating only that the company is "proud to have been chosen as one of three logistics support providers under the LOGCAP IV contract. We look forward to continuing our service to the U.S. forces deployed in the Middle East."
The three prime contractors will compete to deliver fuel, water and food, as well as field operations such as postal services, laundry and sanitation, to troops stationed in Iraq and Afghanistan. The indefinite quantity/indefinite delivery contract has a one-year base with nine option years and could be worth as much as $150 billion.
The use of multiple contractors is a departure from the sole-source strategy the Army has employed since the first LOGCAP contract was awarded in 1992. The change is "designed to enhance competition and reduce overall risk," said Daniel Carlson, a spokesman for the Army.
Previous incarnations of the logistics contract relied primarily on cost-plus task orders in which the Army and the contractor negotiated a price based on an estimate and adjusted the cost as needed. The government then paid the contractor a base reimbursement fee -- typically 1 percent -- on every task order and an additional 2 percent award fee if the work was done efficiently and honestly.
But watchdogs say the contract has been prone to abuse. KBR, which until recently was a subsidiary of Halliburton, was roundly criticized for its work on the 2001 LOGCAP III contract. Reports by GAO, the Defense Department inspector general and the Defense Contract Audit Agency found KBR overbilled the government for fuel and failed to justify $1.8 billion worth of work in Iraq and Kuwait.
And just days after the Army awarded the LOGCAP IV contract, the Special Inspector General for Iraq Reconstruction released a report alleging that KBR provided its employees with better housing than U.S. soldiers, overspent on food by $4.5 million and failed to provide accurate measurements of the fuel services it provided. KBR is in the process of reviewing the report, company spokeswoman Heather Browne said.
DynCorp, meanwhile, has been rapped for providing vague invoices on a State Department contract in Iraq, while Fluor was heavily criticized for its work on a temporary housing contract for Gulf Coast residents in the wake of Hurricane Katrina.
The Army plans to begin using its new LOGCAP IV contract in October, although the protests could delay its implementation. KBR's current LOGCAP contract expires in December, but the Army could exercise an option and extend it if needed.
Two days later, IAP Worldwide Services Inc., a Cape Canaveral, Fla., contractor, filed its own protest, also citing improper technical or price evaluations, according to Michael Golden, GAO's chief procurement attorney. IAP led a team of contractors that included industry giants Lockheed Martin, CACI and Blackwater. Officials with Contingency Management Group and IAP both declined to discuss the reasons for the protest.
The Army awarded its mammoth 10-year LOGCAP IV contract last month to three firms: the incumbent contractor, Kellogg, Brown and Root Services of Houston; former contract holder DynCorp International LLC of Fort Worth, Texas; and Fluor Intercontinental Inc. of Greenville, S.C. The three companies are each capped at $5 billion per year, although the Army does not expect the firms to reach the maximum value in any given year.
A fourth contractor, Serco Inc. of Vienna, Va., was awarded a $225 million support contract last February. The Army says Serco will assist in its planning and provide independent cost estimates, but will not play any oversight role or conduct any inherently governmental work.
In an e-mailed statement, KBR deferred questions about the protests to the Army, stating only that the company is "proud to have been chosen as one of three logistics support providers under the LOGCAP IV contract. We look forward to continuing our service to the U.S. forces deployed in the Middle East."
The three prime contractors will compete to deliver fuel, water and food, as well as field operations such as postal services, laundry and sanitation, to troops stationed in Iraq and Afghanistan. The indefinite quantity/indefinite delivery contract has a one-year base with nine option years and could be worth as much as $150 billion.
The use of multiple contractors is a departure from the sole-source strategy the Army has employed since the first LOGCAP contract was awarded in 1992. The change is "designed to enhance competition and reduce overall risk," said Daniel Carlson, a spokesman for the Army.
Previous incarnations of the logistics contract relied primarily on cost-plus task orders in which the Army and the contractor negotiated a price based on an estimate and adjusted the cost as needed. The government then paid the contractor a base reimbursement fee -- typically 1 percent -- on every task order and an additional 2 percent award fee if the work was done efficiently and honestly.
But watchdogs say the contract has been prone to abuse. KBR, which until recently was a subsidiary of Halliburton, was roundly criticized for its work on the 2001 LOGCAP III contract. Reports by GAO, the Defense Department inspector general and the Defense Contract Audit Agency found KBR overbilled the government for fuel and failed to justify $1.8 billion worth of work in Iraq and Kuwait.
And just days after the Army awarded the LOGCAP IV contract, the Special Inspector General for Iraq Reconstruction released a report alleging that KBR provided its employees with better housing than U.S. soldiers, overspent on food by $4.5 million and failed to provide accurate measurements of the fuel services it provided. KBR is in the process of reviewing the report, company spokeswoman Heather Browne said.
DynCorp, meanwhile, has been rapped for providing vague invoices on a State Department contract in Iraq, while Fluor was heavily criticized for its work on a temporary housing contract for Gulf Coast residents in the wake of Hurricane Katrina.
The Army plans to begin using its new LOGCAP IV contract in October, although the protests could delay its implementation. KBR's current LOGCAP contract expires in December, but the Army could exercise an option and extend it if needed.
Labels: Blackwater, CACI, Contingency Management Group LLC, DynCorp, Fluor, GAO, Halliburton, IAP Worldwide Services Inc., KBR, Lockheed Martin, LOGCAP IV, PAE Government Services, Shaw Group
Saturday, May 12, 2007
Billions of dollars of Iraqi oil production unaccounted for
Oil
(Reuters) - Billions of dollars' worth of Iraq's declared oil production over the past four years is unaccounted for, possibly having been siphoned off through corruption or smuggling, The New York Times said on Saturday. Between 100,000 and 300,000 barrels of Iraq's daily output of roughly 2 million barrels is missing, it said, citing a draft report prepared by the U.S. Government Accountability Office and government energy analysts which is expected to be released next week.
The discrepancy was valued between $5 million and $15 million daily, using a $50 per barrel average, the report said. That adds up to billions of dollars over the four years since the March 2003 U.S.-led invasion of Iraq. The newspaper was provided the draft report by a separate government office that received a review copy.
The GAO declined to discuss the draft, the paper said. The report did not make a final conclusion on what happened to the missing oil, and provided alternative explanations besides corruption or smuggling, including possible Iraqi overstating of its production. A State Department official who works on energy matters offered possible explanations including pipeline sabotage, or inaccurate reporting of oil production in southern Iraq.
"It could also be theft," the Times quoted the unnamed official as saying, with suspicion falling on southern Shi'ite militias. "Crude oil is not as lucrative in the region as refined products, but we're not ruling that out either," the official said."There is not an issue of insurgency, per se, but it could be funding Shia factions, and that could very well be true.""That would be a concern if they were using smuggling money to blow up American soldiers or kill Sunnis or do anything that could harm the unity of the country," the Times quoted the official as saying.
The newspaper characterized the report as the most comprehensive look thus far at what it called faltering U.S. efforts to rebuild Iraq's oil and electricity sectors. The GAO tapped experts at the Energy Information Administration within the United States Department of Energy for its oil analysis. Erik Kreil, an oil expert at the administration who is familiar with the analysis, said a review of industry figures worldwide indicated Iraq's stated production figures did not add up.
"Either they're producing less, or they're producing what they say and the difference is completely unaccounted for in any of the places we think it should go," Kreil told the Times. "Either it's overly optimistic, or it's unaccounted for." Analysts outside the government said such a large discrepancy indicated that there was either a major smuggling operation in place or that Iraq was not generating accurate production figures, the newspaper added.
Labels: corruption, GAO, Iraq Oil, smuggling, U.S. Government Accountability Office
