Contractor Accused of Ripping Off Government

FOXNEWS.COM A U.S. government contractor in Iraq charged the Pentagon a whopping amount of money for inexpensive items, including $900 for a $7 control switch, according to a new report from a U.S. watchdog. U.S. Special Inspector General for Iraq Reconstruction Stuart W. Bowen Jr. said review found that Anham, LLC, which is based in suburban Washington, allowed its subcontractors in Iraq to also charge $3,000 for a $100 circuit breaker, and $80 for a piece of plumbing equipment worth $1.41. As a result, Bowen’s inspectors are seeking to review all Anham contracts with the U.S. government in Iraq and Afghanistan, which total about $3.9 billion. Hassan S. Judeh, the administration director at Anham’s headquarters in Vienna, Va., declined to respond to Bowen’s examples because he said the company has not seen the report. But Judeh said Anham has a history of providing competitive prices for services, resulting so far in $132 million in savings to the government. “Anham prides itself on the fact that it watches every penny and strives to always give the government the best cost-benefit in a remarkably hostile war environment,” Judeh said in a statement. A spokesman for the U.S. military didn’t comment on the overcharges but issued a statement regarding the rest of the report, which found that frequent bombings, assassinations and a resurgence in violence by Shiite militias have made Iraq more dangerous now than it was just a year ago. “We anticipated, and stated many times, that there would be militant and terrorist groups trying to take advantage of this period as U.S. forces prepare to fulfill our commitments under the Security Agreement. These groups attack both Iraqi and U.S. forces,” U.S. military spokesman Jeffrey Buchanan said. “From our standpoint, Iraq’s security continues to be an important and complex issue and one that is difficult to summarize in short-term trends and figures.” The findings come during what Bowen called “a summer of uncertainty” in Baghdad over whether American forces will stay past a year-end withdrawal deadline and continue military aid for the unstable nation. “Iraq remains an extraordinarily dangerous place to work,” Bowen concluded in his 172-page quarterly report to Congress and the Obama administration on progress — and setbacks — in Iraq. “It is less safe, in my judgment, than 12 months ago.” The report cited the deaths of 15 U.S. soldiers in June, the bloodiest month for the U.S. military in Iraq in two years. Nearly all of them were killed in attacks by Shiite militias bent on forcing out American troops on schedule. It also noted an increase in rockets launched against the heavily fortified Green Zone in Baghdad, where government offices and foreign embassies are located, as well as constant assassination attempts against Iraqi political leaders, security forces and judges. Bowen accused the U.S. military of glossing over Iraq’s instability, noting a statement in late May by the U.S. military that described Iraq’s security trends as “very, very positive” — but only when compared to 2007, when the country was on the brink of civil war. In contrast, Bowen talked of “the very real fragility” of national security in Iraq today. If the U.S. military leaves on schedule, the American Embassy in Baghdad will pick up the responsibility of training Iraqi police. Bowen called the job “challenging” for the fewer than 200 advisers who would be based in three sites but tasked with supporting Iraqi police in 10 of Iraq’s 18 provinces. There are an estimated 400,000 policemen in Iraq. Anham LLC Defends Themselves GOVERNMENTEXECUTIVE.COM The United Arab Emirates-based Anham, LLC has issued a statement denying charges made Saturday by the Special Inspector General for Iraq Reconstruction that the contractor had marked up the cost of parts by as much as 12,000 percent. “These conclusions are false,” the company said through a publicity agent. “In fact, the company saved the U.S. government and the U.S. taxpayers nearly $153 million dollars through its performance of the contract.” SIGIR, in its quarterly report, summarized an audit that found that, due to weak oversight, the Defense Department was billed $900 for a control switch valued at $7.05 (a 12,666 percent increase) and $80 for a small segment of drainpipe valued at $1.41 (a 5,574 percent increase), among other items. In rebuttal, the company said: “Every purchase by every subcontractor was the result of a competitive bidding process where the lowest price subcontractor was selected, and not a single screw or nail was purchased without prior, advance approval by the U.S. government after their review of the competitive bidding process amongst potential subcontractors. Full disclosure of the nature of every potential subcontractor was fully disclosed to the U.S. government.” Anham added that it “takes enormous exception to the SIGIR implications. Its suggestions — based on innuendo rather than hard facts — are not the result of a meaningful ‘audit.’ Anham is continually audited by the Defense Contract Audit Agency and welcomes such true audits.” Stuart W. Bowen Jr., the IG for Iraq reconstruction, told Government Executive that SIGIR stands by the report. He said neither DCAA nor the Defense Contract Management Agency has performed audits on costs incurred by Anham. “DCAA is years behind in audits,” he said. “But for our audit, these excessive billings would not have been uncovered, possibly for years.” He added that DCAA and DCMA concurred with his conclusions and have agreed to review the company’s contract, which goes back to 2007. “The one true point Anham makes,” Bowen said, “is that the government didn’t complain about the charges. There was a breakdown in the process of cost review, which wasn’t as strong as it should have been, but that doesn’t render the billings valid.”]]]]> ]]>