McCaskill, Collins Demand Answers on $70 Million Settlement with Contractor DynCorp
Despite these failings, in December 2011, USACE reportedly released DynCorp from all contractual obligations, including any obligations to fix or repair existing and latent defects. Under the settlement, USACE paid DynCorp $70.8 million, more than 97% of the contracts’ total value. In addition, USACE retroactively extended the contract’s duration by 948 days, effectively absolving DynCorp from any liability for the schedule delays. According to SIGAR, USACE agreed to this settlement despite having previously issued the contractor partial termination notices for default under the contracts and unsatisfactory performance evaluations.
SIGAR also questioned whether the actions by USACE violated federal regulations, which require settlements over $100,000 to be submitted to an audit agency for review prior to agreement. According to SIGAR, USACE initially claimed that its settlement was a “negotiated contract modification” which did not trigger the audit requirement. SIGAR found that the substance of the agreement clearly demonstrated settlement terms and conditions and internal USACE documents refer to the agreement as a settlement. USACE has since agreed to submit its actions for review by the Defense Contract Audit Agency.
The terms of this settlement appear materially unfavorable to the government. In light of the harm to taxpayers and the damage to the nation’s objectives in Afghanistan that may have resulted from the Corps’ actions, we request that you provide us with the following information and documents:
(1) The number, type, value, and obligations to date of USACE’s contracts with DynCorp International LLC;
(2) Evaluations or audits of the contractor’s performance;
(3) The number, qualifications, and locations of the contracting officers’ representatives, quality assurance representatives, and other personnel responsible for conducting oversight of DynCorp International LLC contract(s) in Afghanistan;
(4) USACE’s policy and procedures for entering into settlement agreements, “negotiated modifications” of contracts, recovery of liquidated damages, and enforcement of construction defects on construction contracts;
(5) The justification for the decision to enter into the settlement agreement with DynCorp, including a copy of the settlement agreement;
(6) The names and titles of all officials responsible for reviewing and approving the settlement agreement with DynCorp; and
(7) Additional actions being taken by USACE following SIGAR’s report, including whether additional steps will be necessary to recover costs associated with any additional actions necessary to correct performance failures on contracts performed by DynCorp or to complete the contracts.
We request that you provide the information and documents on or before December 3, 2012. We also request that you provide a briefing for Subcommittee staff on or before December 7, 2012. (Click HERE for original article)
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