By Richard Lardner
The Associated Press, 15 January 2008
WASHINGTON - Oversight for nearly $4 billion in Iraq war contracts has been shifted from a troubled procurement office in Kuwait to an Army organization in Illinois as part of an ongoing effort to curb waste, fraud and abuse in military purchasing.
Moving control of the 12 contracts for maintenance and other support work is not a reflection of poor performance by the companies, according to Mike Hutchison, deputy director for acquisition at Army Sustainment Command in Rock Island, Ill. Rather, the transfer is part of a broader initiative aimed at overhauling the Kuwait contracting office, which the Army had identified as a hub of corruption.
And in a separate-but-related action, two teams poring through hundreds of other contracts issued by the Kuwait office have referred an unspecified number of awards to criminal investigators and Army auditors for further review, according to the Army Materiel Command at Fort Belvoir, Va. If any wrongdoing is uncovered, the number of Army military and civilian employees accused of accepting bribes and kickbacks could grow. More than 20 have been charged with contract fraud so far.
The Kuwait contracting office, located at Camp Arifjan, buys gear and supplies to feed, clothe and house U.S. troops as they move in and out of Iraq. The pace of that operation grew rapidly after the beginning of the Iraq war in March 2003.
An initial Army probe of the Kuwait office uncovered numerous problems, including inadequate staffing and oversight, high staff turnover, and poor record-keeping. In the midst of those shortcomings came billions of dollars in money to pay for combat operations in Iraq, creating an environment ripe for mistakes and misconduct.
Over the past few months, new leadership has been installed in the Kuwait office and more contracting officers have been assigned there. The Army also transferred active contracts worth $1 million or more to Sustainment Command where there's a deeper pool of acquisition personnel with experience handling complex acquisitions.
"We brought back quite a bit," Hutchison said.
The work being done under the dozen support contracts ranges from janitorial services, transportation, operating a firing range, running dining facilities, and providing security at U.S. installations in Kuwait.
The largest of the dozen contracts now being managed by Sustainment Command is held by Combat Support Associates. The California company, a joint venture of several larger firms, gained notoriety for hiring the former Blackwater USA guard accused of killing an Iraqi in Baghdad in December 2006.
Since 1999, Combat Support Associates of Orange, Calif., has been paid close to $2.4 billion for maintaining military gear and supporting information systems at U.S. installations across Kuwait. Despite the contract's size, the company has operated out of the spotlight.
In early October, Combat Support Associates was pulled into the controversy over the performance of Blackwater USA when a congressional committee demanded to know how the defense contractor could have hired Andrew Moonen. A former Blackwater guard, Moonen allegedly shot and killed an Iraqi security worker on Christmas Eve 2006 in Baghdad's Green Zone.
After the shooting, Moonen was fired by Blackwater, had his security clearance revoked, and was returned to the United States. Two months later, though, he got a job with Combat Support Associates. Because Moonen had not been charged with a crime, the company said its background checks did not reveal anything that would bar his employment.
Moonen left Combat Support Associates in August.
Hutchison said the Sustainment Command did a review of the Combat Service Support contract and found areas that could be improved. But the Army is satisfied with the company's record.
"We're having the normal issues that you would experience in managing a large dollar service contract being performed in an austere environment," he said.
The contract review teams examined a sampling of the roughly 6,000 contracts worth $2.8 billion issued by the Kuwait office since 2003. The goal of the teams was to ensure these contracts were free of fraud and had been awarded properly.
One team in Kuwait inspected 339 contracts under $25,000 in value; another team in Warren, Mich., checked over 313 contracts worth more $25,000.
Both found problems during their reviews and alerted the Army Audit Agency and the Army Criminal Investigation Command, according to an information paper prepared by Army Materiel Command. The paper did not say how many contracts had flaws, nor did it say exactly what the problems were.
The Criminal Investigation Command has 87 ongoing criminal investigations related to contract fraud in Iraq, Kuwait and Afghanistan, according to spokesman Chris Grey.
Grey said 24 individuals have been charged with contract fraud - 19 of those are Army military and civilian employees - and more than $15 million in bribes has changed hands.
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On the Net:
Army Sustainment Command: http://www.aschq.army.mil/home/index.htm
Citation: Richard Lardner. " Oversight for Iraq war contracts shifts," The Associated Press, 15 January 2008.
Original URL: http://news.yahoo.com/s/ap/20080115/ap_on_go_ca_st_pe/iraq_contracts_2