Best expense account around- your government contract

We, in the the contracting community have been slammed for mismanaging contracts once awarded. The big magnifying glass from above (this week) is on those award fees paid when the contractor is not a good performer. However, in this case involving a pair of contracts (almost $600 million in value) to help Iraq improve their local governing processes, contract payments were made in a curious turn of events:

"On August 19, 2004, Research Triangle Institute physically lost $185,481 in Local Governance Project cash," the report [by the Special Inspector General for Iraq Reconstruction] said. "It reported the loss to USAID, and on October 3, 2004, the USAID Iraq contracting officer issued a letter" stating the loss was "unforeseen" and not the institute's fault. [Inspector General Stuart] Bowen's office said it had no details on how or where the money was lost and the institute and USAID didn't immediately provide an explanation on Tuesday. But Bowen said USAID approved the payment of more than $242,000 to the institute in the case — including the $185,481 in lost cash and an additional $57,000 in "general and administrative expenses" and a "fixed fee."

I guess we need to be more careful out there. If cash is involved, I would hope it's security (and potential loss) would have been "foreseen" and appropriate protections taken.

Maybe next time.

Comments??

Army raked over coals for third tier subcontractor actions

A subcontractor for a subcontractor for a subcontractor to the Army's Logistics Civil Augmentation Program, or LOGCAP, contract turns out to be a private military contractor (PMC). The "news" is that this company used armed guards to protect the transportation of cash used to pay vendors and employees and were part of a contract that does not allow contracting for armed security.

Since the prime contractor is a Halliburton subsidiary (KBR) and the security firm is Blackwater, Inc, from Moyock, NC, it makes headlines and a congressional hearing.

What is interesting to me is that the KBR contract administrator recognized the problem with this and understood his firm's role in flowing the proper clauses down to the subcontracts. He recommended not following the direction that the eventual sub-sub-subcontract went.

Of course, he wrote all this in an email and for some reason "top officials" at KBR were unaware of it. It seems logical that all email traffic is not forwarded to the senior officials at this company that has 57,000 employees.

That happens to me all the time. No one at the Pentagon ever reads these important postings nor my emails and nor takes my opinion seriously. I can't understand why KBR doesn't do a better job with far fewer employees.

I am not sure what the true issue is here. Is it the numbers of contractor personnel in Iraq? Is it the number of contractors that are needed to protect other contractors? Or is this something not contract-related at all- perhaps an issue of rules of "behavior" in-theater- or maybe it is just politics.

Bill targets wartime contracting fraud

Just another in the continuing saga of contracting in Iraq. Of course, increasing the visibility and priority on contract administration would fight this.