Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Consequences of Pursuit of Profit

That dispute led to the under-equipment and under-preparation of the security team on which the four Blackwater employees died.   Their deaths led the military to launch an invasion of Fallujah.

So here it is: A contract dispute led to a major development in a major war of the United States – and that is Paul’s point.

David Isenberg at PMC Observer

Reduced to its essentials every argument and debate about the use of private military and security contractors comes down to two words; outsourcing and privatization. The argument is simply whether they are good and bad.
Personally I think that, like most other things, the answer is maybe. Hey, if you want absolutes take up physics.

But lately, partly I suppose, in response to the predictable quadrennial Republican party blather about the glories of the free market – cue the inevitable segue into why America needs a purported businessman like Mitt Romney to “fix America” – my repressed academic side has been pondering the pitfalls of privatizing the battlefield.

Before going any further let me acknowledge the contribution and sacrifice of PMSC personnel. To paraphrase Winston Churchill, never has so much depended on such an unacknowledged few.

That said, let’s turn to one of the iconic contractor moments of the U.S.involvement in Iraq; the killing of four Blackwater contractors in Fallujah in 2004.

Please go to David’s blog and read the entire post

 

February 7, 2012 Posted by | Blackwater, Civilian Contractors, Contractor Casualties, Follow the Money, Halliburton, KBR, LOGCAP, Private Military Contractors, Private Security Contractor, Safety and Security Issues | , , , , , , , , | Leave a comment

CENTCOM rewards KBR’s dismal LOGCAP performance with $3.8 billion MATOC Contract

Awarded U.S. Central Command’s Multiple Award Task Order Contract

Cross Posted from MsSparky

BusinessWire – June 30, 2011
KBR (NYSE:KBR) today announced that it has been awarded by the U.S. Army Corps of Engineers Middle East District the U.S. Central Command’s () Multiple Award Task Order Contract (). This new program has an overall value of $3.8 billion, with a period of performance currently at two base years, with one-year options available for the following three years.

Under the previous CENTCOM MATOC program, KBR successfully executed $620M worth of projects across 32 separate task orders, thereby establishing a longstanding history with this client. The current MATOC program will support design-build and construction projects throughout the 20 countries of the CENTCOM area of responsibility, including Afghanistan, Bahrain, Egypt, Iran, Iraq, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Lebanon, Oman, Pakistan, Qatar, Saudi Arabia, Syria, Tajikistan, Turkmenistan, U.A.E., Uzbekistan and Yemen. A large majority of the task orders anticipated for this MATOC program include vital projects directly supporting the U.S. Military and U.S. Government in the various regions.

“It is a privilege for KBR to be given the opportunity to continue to work with the Middle East District , and to continue to offer a high level of services and quality facilities to our military personnel located throughout the world,” said , Group President, Infrastructure, Government & Power.

KBR is a global engineering, construction and services company supporting the energy, hydrocarbon, government services, minerals, civil infrastructure, power, industrial, and commercial markets. For more information, visit www.kbr.com. (Click HERE for original article)

Please see the original post at MsSparky.com

June 30, 2011 Posted by | Civilian Contractors, Contractor Oversight, Contracts Awarded, KBR, LOGCAP, Safety and Security Issues | , , , , , | Leave a comment

Sallyport Wins KBR LOGCAP Contract and Transitions in 60 Days

Press release from PR Web  June 29, 2011

Sallyport was awarded the Fire and Emergency Services contract for Iraq under the Logistics Civil Augmentation Program (LOGCAP III). The Prime contractor for the LOGCAP in Iraq is Kellogg Brown & Root Services Inc, who provides basic life support services to Soldiers, Sailors, Airmen, Marines, and civilian contract personnel.

Fire and Emergency Services is categorized as a “High Risk” job, and has many critical components. Recognizing Sallyport’s reputation in this critical sector, KBR sub-contracted the entire Fire and Emergency portion of the BLS to them. This allowed KBR to focus on what they do best, whilst benefiting from Sallyport’s industry-wide experience in protecting lives, fighting fire, and mitigating property damage.

The transition for this contract was exceptional; within 60 days, Sallyport had established an HQ in Baghdad, transitioned 21 sites across the country – an area the size of Florida, Georgia, and Alabama combined – and built an operational capacity of over 500 firefighters. This made Sallyport the largest contract fire department in the DoD, and the 78th largest fire department nationwide.  Read the entire press release here

June 29, 2011 Posted by | Civilian Contractors, Contracts Awarded, Government Contractor, Iraq, KBR, LOGCAP | , , , , | Leave a comment

DynCorp International Mourns the Loss of LOGCAP Team Member

March 28, 2011 The DI family is mourning the loss of Logistics Civil Augmentation Program (LOGCAP) team member Angela Kiti of Nairobi, Kenya, who was killed on March 27, 2011 during a rocket attack in Kandahar, Afghanistan.

Ms. Kiti, 26, joined the team as a billeting coordinator on February 2, 2011.

“Every one of our team members who leaves the comforts of his or her home in order to help others around the world is a hero. Angela worked with our LOGCAP team in Kandahar and, sadly, is now part of a group of heroic individuals who made the ultimate sacrifice while supporting coalition military and civilian personnel in Afghanistan,” said DI chairman and CEO Steve Gaffney. “We are deeply saddened by this loss and our hearts go out to all of Angela’s loved ones during this difficult time.”

Please keep Angela’s family, friends, colleagues and the entire LOGCAP team in your thoughts and prayers.

March 30, 2011 Posted by | Civilian Casualties, Civilian Contractors, Contractor Casualties, DynCorp, LOGCAP | , , , , , , | 14 Comments

KBR Managers Allegedly Received Kickbacks from Dining Facility Subcontractor

MsSparky at MsSparky.com  March 16, 2011

WASHINGTON – March 16, 2011 – In response to a pending lawsuit from Kellogg Brown & Root Services Inc. (KBR) in the U.S. Court of Federal Claims, the Department of Justice has filed counterclaims alleging that KBR managers had received kickbacks from a dining facility subcontractor in violation of the and the .  The subcontractor was retained in connection with KBR’s contract with the U.S. Army to provide logistical support to the military in Iraq and elsewhere.  The counterclaims also allege that the kickbacks should cause KBR to forfeit its claims against the United States and to return money paid by the United States as reimbursement to KBR upon the tainted subcontract.

The counterclaims assert that, from late 2002 through 2003, , who was KBR’s regional food services manager for Iraq and Kuwait, and his deputy, , received more than $45,000 in kickbacks from , vice president of Global Company.  Khan provided the kickbacks to ensure that was treated favorably by KBR.  Hall and Holmes used their positions to advocate on behalf of , and, during the time that they received the kickbacks, KBR awarded subcontracts worth more than $400 million.  Other KBR managers knew of apparent irregularities involving the Tamimi subcontracts, but approved them anyway.

Please read the entire post here

Department of Justice Press Release

March 16, 2011 Posted by | Civilian Contractors, Contractor Corruption, Government Contractor, Iraq, KBR, Kuwait | , , , , , , | Leave a comment

Another Dyncorp LOGCAP IV Project Manager bites the dust

March 1, 2011 MsSparky

It was just last September when I wrote about the resignation/demotion/transfer call it what you will of Dyncorp’s manager Hank Miller and his Deputy Project Manager . Many many employees breathed a sigh of relief as these two headed to the tarmac.

During the rein of Hank Miller and Scott Mount, many Dyncorp employees were not being paid on time, employee turnover was very high, moral was very low and according to my sources the client was not happy with Dyncorp’s performance. There was much anticipation with the announcement that would replace Hank Miller in the position of Project Manager. I have to be honest the number of complaints I’ve heard from Dyncorp employees has drastically reduced since took the helm.

That didn’t last but six months and now Joe Schmitt has joined the ranks of “Past LOGCAP PM’s”. Reportedly there was a “incident” at near Kandahar involving Schmitt and the Base Commander, Colonel Applegate. It is alleged, the incident may have gotten physical. Regardless of the reasons, no one should EVER go there, especially our leaders. I don’t know if it was a voluntary or encouraged resignation of his position, but Dyncorp really had no other choice but to remove him from Theater. I have yet to confirm the rumors regarding Colonel Applegate’s consequences. It’s unfortunate on both sides.

Please read the entire post with documents and comments here

March 2, 2011 Posted by | Afghanistan, Civilian Contractors, DynCorp, LOGCAP | , , , , | 3 Comments

Troops or Private Contractors: Who Does Better in Supplying Our Troops During War?

Charles M. Smith for Truthout Wednesday February 23, 2011

In testimony before the House on March 11, 2010, Undersecretary of Defense for Acquisition, Technology and Logistics, Dr. Ashton B. Carter, stated, “All studies show that that [organic support, i.e. using troops] is more expensive than contractors and a distraction from military functions for military people.”(1)

While this is sometimes an accurate statement, the Army should not just automatically choose contractor support over organic support without serious and honest additional analysis. With the continuing experience of extensive LOGCAP logistics support for Afghan and Iraq wars, the Army has the opportunity to re-evaluate decisions to use contractors for combat service support. The main support contractor for most of the time of these current wars, KBR, has had many failed reviews and received much criticism by DoD investigators and Congress. With the price tag of KBR’s LOGCAP contracts hitting above $40 billion, there are many lessons to be learned from their cost and performance failures. Such a review can evaluate the additional risks posed by contractors on the battlefield, along with any cost savings.

Cost Comparison

The major cost comparison study of troop versus KBR LOGCAP support was performed by the Congressional Budget Office (CBO) in 2005. This study was performed during the first two years of combat in Iraq and had significant data. The CBO compared Task Order 59 on the LOGCAP III contract, which provided support to Joint Task Force Seven (CJTF-7), the initial designation of troop units in Iraq. Task Order 59 accounted for over 50 percent of LOGCAP costs during the two years it was in effect.

The CBO estimated the number of Army units necessary to carry out the full range of tasks which Task Order 59 provided for JTF-7. They determined that “177 units of 38 distinct types, populated by 12,067 soldiers” would be required. They took into account units already in the military force structure, but unavailable because they are assigned to other missions, such as Korea. For their model, CBO assumed a 20-year period with two contingency operations and two periods of peacetime, in which units were trained and reconstituted. They calculated the cost per soldier, with the average length of service and the accumulation of veterans and retirement benefits. Unlike previous studies, the CBO factored in the different costs of reserve and regular Army units.

Based on these calculations, the cost of troop support would be $78.4 billion for the 20-year period. LOGCAP support is calculated to cost $41.4 billion for this period. Based upon the CBO calculations, the cost difference over a 20-year period would be $37 billion dollars, in 2005 dollars. The study found that organic support costs approximately 90 percent more than using contractors.

The CBO study examined a variety of operational scenarios, differing lengths for missions and peacetime, and found that the cost differential was not sensitive to these variations. The study is, however, extremely sensitive to a major assumption of the analysis, the Army’s rotation schedule. The Army policy is for a three-year rotational schedule. One year is spent performing a mission, followed by a year of reconstitution and a year of training for the next mission. Given this schedule, each unit created to replace the LOGCAP contract must have two other similar units to complete the rotation cycle. If the Army could live with a two-year rotational schedule for support units, the cost differential between organic support and LOGCAP would be significantly reduced especially since, in reality, the Army has not strictly kept to a three-year schedule and many of our troops are on their fifth or sixth deployment to Iraq or Afghanistan.

Please read the entire article/report here

February 23, 2011 Posted by | Afghanistan, Civilian Contractors, Contractor Corruption, Contractor Oversight, Government Contractor, Halliburton, Iraq, KBR, LOGCAP, Pentagon, Wartime Contracting | , , , , , | Leave a comment

The Latest on Contractors From SIGIR

By David Isenberg at Huff Post

The latest Quarterly Report to Congress from the Office of the Special Inspector General for Iraq Reconstruction has been released.

The following are excerpts relevant to private military contractors.

Number of contractors: Current, 119,700. Peak, 171,000 (Q4 2007)

p. 2

On July 22, 2010, several rockets impacted inside the International Zone, killing three foreign-national contractors working for Triple Canopy, a U.S.-based security company.Figure1.10 [ see p. 16] lists the 15 contracting companies that have reported the largest number of deaths in Iraq since March 2003.
This quarter, the Department of Labor (DoL) received reports of 12 additional deaths of contractors working on U.S.-funded programs in Iraq. DoL also received reports of 882 injuries this quarter that caused the injured contractors to miss four or more days of work. Since 2003, at least 1,487 death claims have been filed with the DoL.
p. 15

DoS has also requested that it be allowed to use the Logistics Civil Augmentation Program (LOGCAP) III to support its operations in Iraq beyond December 2011. As of June 30, 2010, however, Kellogg, Brown and Root, Inc. (KBR)–the sole LOGCAP III contractor–is scheduled to remain in Iraq only until the end of 2011. According to U.S. Embassy-Baghdad, it does not have a plan to meet its support requirements if KBR pulls out.  more here

July 31, 2010 Posted by | Civilian Contractors, Contractor Corruption, Iraq, Private Military Contractors, Private Security Contractor, State Department | , , , , | Leave a comment

Oversight of war zone subcontractors is lacking, panel finds

Robert Brodsky at GovExec

Prime contractors in Iraq and Afghanistan are not managing their subcontractors’ performance and fees consistently, the Defense Department’s top auditing official told the Commission on Wartime Contracting on Monday.

A Defense Contract Audit Agency review of prime contractors’ billing and cost records identified several situations in which they failed to award fixed-price subcontracts based on fair and reasonable prices, often leading to unreasonable or unallowable costs.

“Prime contractors must be held accountable for establishing fair and reasonable subcontract prices,” Patrick Fitzgerald, director of DCAA told commission members.

Subcontractors comprise about one-third of the roughly 200,000 contractor employees in Iraq and Afghanistan, according to the commission’s data. But federal regulations limit government officials’ visibility into the activities of in-theater subcontractors.

Federal agencies enter into agreements with the prime contractors and have no direct business relationship, known as privity of contract, with subcontractors. Prime contractors are legally responsible for managing subcontractors, but many lack the internal controls or oversight mechanisms to carry out that role, the panel suggested.

For example, DynCorp International billed the government roughly $6 million for work performed by Kuwaiti-owned subcontractor Al-Shora International General Trading and Contracting Co. The cost-type subcontract terms required Al-Shora to provide cost data to support its invoices. When DCAA requested that Al-Shora open its books to document its costs, the company declined, citing Kuwaiti law. DCAA has since suspended payment for DynCorp’s billed costs from Al-Shora.

“If foreign companies want to be in business with this government, they ought to play by our rules,” said commission member Dov Zakheim.

DCAA plans to recommend that Pentagon officials consider adding a contract clause that would require primes to manage its subcontractors more closely.

“Prime contractors should have systems or processes in place to review subcontractor billing processes to ensure [they] are in accordance with subcontract terms and conditions,” Fitzgerald said.

In addition, the Defense Contract Management Agency has yet to approve the purchasing systems of two of the three prime contractors — DynCorp and Fluor — for the Army’s multibillion-dollar LOGCAP IV logistical-support contract for operations in Iraq and Afghanistan. The government relies on data from prime contractors’ purchasing systems to ensure subcontract costs are reasonable.

Commission members cited ethical, security and logistical concerns with wartime subcontractors, including allegations of exploitation of unskilled foreign laborers, human trafficking and excessive costs from tiering contracts, or adding layers of subcontractors to obscure fees and credentialing.

“Subcontracting is a normal business practice,” said commission co-chairman Christopher Shays. “But what makes sense for an office renovation project in Maryland can create some unique risks when the contractor is hiring subcontractors in a combat zone half a world away.”

The daylong hearing included officials from four federal agencies, four prime contractors and six subcontractors. Each agreed that subcontracting in a wartime environment presents unique security and operational concerns.

“We recognize the risks of contracting in a contingency operation,” said Edward Harrington, deputy assistant secretary of the Army for procurement. “We must ensure that America’s integrity is not harmed by the actions of our contractors and subcontractors.”

Both State Department and U.S. Agency for International Development officials said prime contractors must obtain their contracting officers’ written consent prior to the award of a subcontract.

Prime contractors told the panel that oversight of subcontractors was lacking at the start of the wars in Iraq and Afghanistan, in part, because relatively few foreign-owned firms in the region had any experience working with the U.S. government. They said the environment has improved considerably in recent years, but challenges remain.

For example, the federal government frequently prevents local citizens from working on U.S. bases, where much of the subcontract work is performed, said John Supina, DynCorp’s senior vice president of business administration.

“Vetting of host country employees to ensure that they do not support insurgents, will not divert funds to insurgent causes, or pose a threat to U.S. and allied personnel is very difficult,” he said.  Original here

July 26, 2010 Posted by | Civilian Contractors, Contingency Contracting, Contractor Corruption, Contractor Oversight, DynCorp, Wartime Contracting | , , , , , , , , , | Leave a comment

Report Finds Army broke contracting regulations in Iraq

Robert Brodsky at Gov Exec

he Army broke federal procurement rules in 2004, when two commanding generals improperly directed a contracting officer to pay millions of dollars in fees to KBR Inc., according to a report released on Monday by the Defense Department inspector general.

Under the Federal Acquisition Regulation, the Army Sustainment Command should have withheld 15 percent of its payments to KBR under a cost-reimbursement task order through the massive Logistics Civil Augmentation Program III, because terms and price had not been finalized.

But when a contracting officer tried to withhold the funds, she was overruled by Army leaders who said KBR warned the move could hurt battlefield operations.

“The decision to postpone enforcement of the clause was influenced by contractor claims that withholding of funds might adversely affect vital support services provided to the troops,” the IG report said. “ASC’s failure to enforce the clause from inception of the contract and develop a contingency plan for obtaining LOGCAP III services from other sources put the government at significant risk of overpayment.”

In its written response, the Army disagreed with many of the report’s conclusions, noting that the service had legal authority to suspend the withholding of funds and that top officials, including the assistant Army secretary, agreed with the decision.

“The review also fails to recognize that LOGCAP III is the contingency contract for use by the Army during times of crisis to ensure continuation of essential services,” said Teresa Gerton, the Army’s acting executive deputy to the commanding general.

KBR officials said they still are reviewing the report and aren’t in a position to comment specifically.

Many of the key findings outlined in the report, which was requested by the Senate Armed Services Committee, are not new. But the report does shed light on the timeline of events leading up to the controversial payments to Houston-based KBR, the largest contractor in Iraq.

The Army Sustainment Command awarded the 10-year sole-source LOGCAP III contract in December 2001. KBR was responsible for providing support services such as fuel, food, water and shelter to troops. The firm still operates exclusively in Iraq under the LOGCAP contract, although the Army is planning to compete the work among three firms. The service already has awarded task orders under the revamped LOGCAP IV contract for Kuwait and Afghanistan.

During the initial years of the Iraq war, the Army depended almost exclusively on the former Halliburton subsidiary to take care of troops in theater. And to meet urgent operational needs the Army frequently authorized KBR to begin work before individual task orders were set in stone.

Although “undefinitized” task orders allow contractors to begin work earlier, investigators said they carry major risks to the government. To reduce those risks, the FAR mandates that no more than 85 percent of fees can be paid to a contractor on a reimbursement contract until the terms are finalized.

It was not until February 2004 — more than three years after awarding the contract — that the Army discovered it had failed to comply with the 15 percent rule. After some initial delays, the contracting officer moved to correct the mistake and withhold future funds.

KBR opposed the decision and lobbied the Army to reverse it, saying it would cost the company $60 million per month, the IG report said.

“The contractor warned the Army that it would pass the withholding of funds to its subcontractors, which could cause a severe disruption of vital support services provided to the troops,” the report said. “Two officials, one from ASC and one from the Army Materiel Command, testified that a contractor representative had even threatened to initiate a lawsuit against them personally as well as the Army over any withholding of funds.”

While officials at the Defense Contract Audit Agency and the Defense Contract Management Agency dismissed KBR’s claims of financial hardship, the Army apparently took the company’s threats seriously. ASC leadership began expressing concern that imposing the clause “could seriously jeopardize battlefield operations,” the report said.

After postponing enforcement of the clause for several months in 2004, the Army eventually asked the director of defense procurement and acquisition policy to grant a waiver that would allow them to reimburse KBR for all allowable costs.

But the request lacked key information, such as proof that the Army had considered alternatives in obtaining the LOGCAP III services, the report said. Nonetheless the waiver was granted in February 2005.

“We are not questioning the consequences that might have occurred if the LOGCAP contractor was unable to financially support the Army,” the report said. “We previously stated the Army could not risk a significant disruption of LOGCAP III support services given the critical nature of those services. However, we do question why the Army cited some of the contractor’s financial hardship claims without verifying them.”

The IG also found there was not enough evidence to prove that the Army reassigned Charles Smith, the former chief of the Field Support Contracting Division for the then-Army Field Support Command, because he supported the 15 percent hold.

Smith told a congressional panel in 2008 that he was verbally attacked by then-Brig. Gen. Jerome Johnson, the head of the Army Sustainment Command who later relieved Smith of his duties, at KBR’s offices in June 2004. Smith said he was then told to draft a letter to KBR that would not implement the 15 percent hold.

But the IG said it appeared that the Army wanted to go in a new direction with the LOGCAP contract and that the 15 percent withholding dispute likely was not a primary factor in his reassignment.

February 24, 2010 Posted by | KBR | , , , , | 1 Comment