Iraqi labourers work June 7 on new sewege pipes being installed in Baghdad. A Special Inspector General for Iraq Reconstruction questioned more than $4 million in costs in a review of Anham LLC's contracts after finding the contractor billed the Defense Department $900 for a $7 switch. (Ali Al-Saadi / AFP via Getty Images)
By SARAH CHACKO
August 1, 2011
The Defense Department's lax contract oversight overseas has allowed one contractor to bill the government $900 for a $7 switch, a new quarterly report by the Special Inspector General for Iraq Reconstruction (SIGIR) shows.
The inspector questioned more than $4 million in costs found through a limited review of Anham LLC's $119 million reconstruction and logistics contract, the report said.
The review raised questions about competition practices, inappropriate bundling of subcontractor work, and possible ownership affiliations between Anham, which is based in Dubai in the United Arab Emirates, and some of its subcontractors.
The SIGIR has asked the Defense Department to look into all of the contract's costs and recommended review of the billing practices in all of Anham's Iraq and Afghanistan contracts, which total about $3.9 billion.
The SIGIR also criticized the State Department's lack of cooperation in submitting information regarding reconstruction programs, which the department will take over as the military withdraws from Iraq.
By the end of this year, four remaining reconstruction teams will close, the State Department will resume responsibility for Iraqi police training, and the U.S. embassy in Baghdad is planning to double its personnel from 7,980 to around 16,000 government employees, contractors and locally employed staff.
Officials at the Baghdad embassy declined to give information to the SIGIR about support contracts being used to provide services to State Departments posts in Iraq that are currently managing reconstruction programs, according to the report.
The SIGIR also found:
• U.S. money was unnecessarily spent on reconstruction projects that had Iraqi government funding.
• No agency has been appointed to monitor government-funded private security contractors that support Defense and State department programs and the U.S. Agency for International Development.
• 40 percent of contracting officer representatives who monitor security service contracts said they did not receive sufficient training and 25 percent said they did not have enough time to effectively oversee contracts. Also, contracting officer representatives are not completing monthly checklists that should be used to monitor contractor compliance with the terms of a task order.
The Defense Department's lax contract oversight overseas has allowed one contractor to bill the government $900 for a $7 switch, a new quarterly report by the Special Inspector General for Iraq Reconstruction (SIGIR) shows.
The inspector questioned more than $4 million in costs found through a limited review of Anham LLC's $119 million reconstruction and logistics contract, the report said.
The review raised questions about competition practices, inappropriate bundling of subcontractor work, and possible ownership affiliations between Anham, which is based in Dubai in the United Arab Emirates, and some of its subcontractors.
The SIGIR has asked the Defense Department to look into all of the contract's costs and recommended review of the billing practices in all of Anham's Iraq and Afghanistan contracts, which total about $3.9 billion.
The SIGIR also criticized the State Department's lack of cooperation in submitting information regarding reconstruction programs, which the department will take over as the military withdraws from Iraq.
By the end of this year, four remaining reconstruction teams will close, the State Department will resume responsibility for Iraqi police training, and the U.S. embassy in Baghdad is planning to double its personnel from 7,980 to around 16,000 government employees, contractors and locally employed staff.
Officials at the Baghdad embassy declined to give information to the SIGIR about support contracts being used to provide services to State Departments posts in Iraq that are currently managing reconstruction programs, according to the report.
The SIGIR also found:
• U.S. money was unnecessarily spent on reconstruction projects that had Iraqi government funding.
• No agency has been appointed to monitor government-funded private security contractors that support Defense and State department programs and the U.S. Agency for International Development.
• 40 percent of contracting officer representatives who monitor security service contracts said they did not receive sufficient training and 25 percent said they did not have enough time to effectively oversee contracts. Also, contracting officer representatives are not completing monthly checklists that should be used to monitor contractor compliance with the terms of a task order.
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