Although anyone with any experience in military logistics could have written this report a year ago, here it is finally from GAO. Of course, don’t look for it in the liberal press…..
GAO: No-Bid Contracts in Iraq Appear Legal
By KEN GUGGENHEIM
Associated Press Writer
April 27, 2004, 9:09 PM EDT
U.S. officials met legal guidelines in awarding billions of dollars in new contracts for Iraq reconstruction to a Halliburton subsidiary and other companies without seeking competitive bids, congressional investigators say in a draft report.
But the government often appeared to go beyond the rules when it ordered new work under older, existing contracts, the General Accounting Office said in its review of 25 reconstruction contracts. The contracts represented almost all of the $3.7 billion committed for reconstruction through September.
The draft report, which has been submitted to federal agencies for comment and to Congress, was obtained by The Associated Press.
Democratic lawmakers have accused the Bush administration of showing favoritism to companies such as Halliburton, Vice President Dick Cheney’s former company, that were major contributors or had close ties to the Bush administration.
Among the contracts reviewed by the GAO, Congress’ investigative and auditing arm, was the Army Corps of Engineers’ $1.39 billion contract to Halliburton subsidiary KBR to repair Iraq’s oil infrastructure. The GAO found that the contract met legal standards because KBR was the only source capable of performing the work, which was planned before the war.
Overall, the GAO found that the 14 no-bid or limited-competition contracts it reviewed generally complied with requirements. But its review of 11 “task orders” — work ordered under existing contracts — were generally questionable. Only two were deemed to be within the scope of the contracts, seven were at least partly outside the scope, and two were unclear whether they were within the scope.
For example, a Pentagon acquisition office used a management improvement agreement with Science Applications International Corp. to obtain media services and experts from the company. Because the work didn’t involve management improvement activities, it was outside the scope of the contract, the GAO said. The two task orders cost a total of $49 million.
The House Government Reform Committee will consider the report as it examines contracting issues, said David Marin, a spokesman for committee Chairman Tom Davis, R-Va.
Marin said he understood the report would “paint a predictable good-news, bad-news picture.” He said Davis has maintained that “procurement in a war zone, where lives are literally at stake, is a tremendously complex matter prone to mistakes.”
In a separate investigation, the GAO found that food distribution problems in Iraq continued even after the U.N. oil-for-food program ended in November. The history of corruption in the program also raises concerns about how a new Iraqi government will distribute food and handle billions of dollars in international aid, a GAO official said in testimony prepared for a congressional hearing Wednesday.
The GAO has found that Saddam Hussein’s government collected $10.1 billion through kickbacks and smuggling from the oil-for-food program. The United Nations has approved an independent investigation into the allegations.
The program allowed Saddam’s government to sell unlimited amounts of oil provided the money went primarily to buy humanitarian goods and pay reparations to victims of the 1991 Gulf War. When the program ended, pending contracts worth $6.2 billion were turned over to the U.S.-led Coalition Provisional Authority that governs Iraq.
But poor coordination and communication between the United Nations and the CPA, inadequate staffing and security problems have hampered deliveries of food, according to testimony prepared by Joseph A. Christoff, director of the GAO’s International Affairs and Trade division for a House International Relations Committee hearing. The AP obtained a copy of the prepared testimony.
Christoff said the CPA’s failed plans to privatize the food distribution system and delayed negotiations with the U.N. World Food Program to administer it resulted in localized shortages. The GAO said 60 percent of Iraqis rely on monthly rations as their main source of nutrition.
The interim Iraqi government expected to take control July 1 “will have to balance the need to reform a costly food subsidy program with the need to maintain food stability and protect the poorest populations,” he said.