Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Improper time-and-materials contracts prove costly

by Robert Brodsky at GovExec

Army contracting officials improperly awarded time-and-materials contracts and task orders to support the wars in Iraq and Afghanistan, potentially costing taxpayers nearly $3.7 million, according to the Defense Department inspector general.

The report, released on Aug. 27, found that contracting and program officials regularly ignored federal and defense acquisition regulations mandating competition and adequate justification when using time-and-materials contracts.

“As a result, the Army did not have the opportunity to obtain cost savings through competition and may have incurred additional costs by not negotiating reasonable prices and by unnecessarily using the riskiest contract type,” the audit said.

Time-and-materials awards have fallen out of favor because the contractor’s profit is built into the labor rates, reducing the company’s incentive to control costs and work efficiently. The Obama administration has directed agencies to cut their use of time-and-materials contracts, and the Defense Department has indicated it will phase out this type of contract altogether.

The IG reviewed seven contracts and 11 task orders with a total value of $605 million. Investigators reported that Army acquisition officials failed to open three of the contracts and seven task orders to competition.

In September 2006, for example, the Army Contracting Agency at White Sands Missile Range in New Mexico awarded a $9.9 million sole-source task order to Computer Sciences Corp. for “operation, training and maintenance of foreign aviation systems at Kabul Afghanistan International Airport.” The Army had noted CSC was the only firm capable of performing the work due to its specialized nature, but officials offered no evidence to back up their claim, auditors said.

“The justification also included an unexplained assertion that it would take 24 months and cost $25 million for another contractor to acquire the skills needed to gain proficiency for this effort,” the report said. “This assertion was shown to be false a year later, when CSC was forced to compete for the follow-on contract and lost to Northrop Grumman.”

Please read the entire article here

September 1, 2010 Posted by | Afghanistan, Civilian Contractors, Contractor Oversight, Iraq, Pentagon | , , , , , | Leave a comment

Army Secretary says KBR contract still classified

“Who is it precisely we’re keeping information from?” he asked. “It appears the only reason to invoke this classification at this point is to keep information from the American public.”

Julie Sullivan The Oregonian

The Army’s combat mission in Iraq has ended, but details of the no-bid contract it signed with Kellogg, Brown and Root before the war started remain classified.

On Tuesday, Sec. of the Army John McHugh said he would not release the contract’s specifics that holds taxpayers — and not KBR — responsible for any harm to a soldier or civilian as it worked restoring Iraqi oil flows in 2003.

But in a two-page response to U. S. Rep. Earl Blumenauer‘s demand for details, McHugh reveals how unusual the Army’s arrangement with the former Halliburton subsidiary was.

“Apart from the Restore Iraqi Oil contract with KBR, no other Army contracts awarded since 2001….contain indemnification provisions,” McHugh wrote. “The Army has made no payments as a result of indemnification provisions with contractors supporting contingency operations in Iraq. Afghanistan or anywhere else.”

In July, Blumenauer demanded the Army produce the contract after KBR’s claims of immunity emerged in a U.S. District Court case in Portland. Chris Heinrich, a KBR attorney, said in a sworn deposition that after KBR signed its Restore Iraqi Oil contract and as the March 2003 invasion was taking place, he went to the Pentagon himself to demand immunity for KBR.

He told Army officials that KBR refused to do the restoration without “broad coverage.” KBR required that taxpayers — not the war contractor — pay for any property damage, injury or death at any KBR site. That applies even if the harm resulted from KBR negligence. KBR eventually billed the government $2.5 billion for the work.

But it could cost taxpayers millions more. Dozens of National Guard soldiers from four states have sued KBR since 2008 claiming the contractor knowingly or negligently exposed them to a cancer-causing chemical at the Qarmat Ali water treatment plant. Among them: 26 Oregon Army National Guard soldiers who arrived at the Iraq plant in late May 2003. They claim breathing, stomach and skin issues result from their exposure to hexavalent chromium.

Blumenauer expressed disbelief that the specifics would remain classified — even after combat operations ceased.

“Who is it precisely we’re keeping information from?” he asked. “It appears the only reason to invoke this classification at this point is to keep information from the American public.”

Blumenauer said he is drafting a bill requiring such an arrangement be reported to Congress in the future. “There ought to be someone looking over their shoulders.”

Meanwhile, the National Guard soldiers’ case is moving forward in Portland. Monday, U.S. District Magistrate Judge Paul Papak denied a KBR motion to dismiss.

Spokeswoman Heather Browne said KRB disagrees with the judge and may appeal. She restated KBR’s stand that the Army was responsible for safety at the plant.  Original Story here

September 1, 2010 Posted by | Civilian Contractors, Contractor Oversight, Iraq, KBR | , , , , | Leave a comment