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Chaffetz and Tierney Investigate Multi-Billion Dollar Defense Food Contract in Afghanistan

(Press Release) – Washington, DC – May 24, 2012 – Today, Rep. Jason Chaffetz and Rep. John F. Tierney, Chairman and Ranking Member of the Subcommittee on National Security, Homeland Defense and Foreign Operations, sent joint letters to Supreme Foodservice GmbH and the Defense Logistics Agency (DLA) requesting a host of documents relating to their ongoing investigation into a multi-billion dollar contract to provide food and other supplies to American bases in Afghanistan.

“It is outrageous that DLA could ever be in the position of possibly overpaying any vendor by three quarters of a billion dollars- especially at a time when troop levels are being scaled back because funding is tight,” said Chairman Chaffetz. “The Subcommittee will work with the Department of Defense to investigate the facts and circumstances surrounding this apparent lack of oversight.”

“The American taxpayers refuse to accept a government contractor that bills more than $750 million in unsubstantiated charges, and they refuse to accept the Pentagon’s failure to manage this contract properly,” said Ranking Member Tierney.  “Chairman Chaffetz and I plan to continue our vigorous bipartisan oversight efforts, to fully investigate the problems with this contract, and to determine how they will affect the impending award of the new contract.”

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Air Force Lifts Booz Allen Suspension, Contractor Admits to “Broader Systemic Ethical Deficiencies” and “Additional Improper Actions”

Neil Gordon – (POGO) – April 17, 2012 – On Friday, Booz Allen Hamilton announced that its San Antonio office was removed from the Excluded Parties List System (EPLS) and regained full eligibility to compete for new federal contracts. Booz Allen entered into a three-year administrative agreement with the U.S. Air Force. We strongly encourage you to read the agreement, which contains several astonishing admissions about the company’s ethics environment and business practices.

POGO blog readers may remember that Booz Allen’s San Antonio office was proposed for debarment in February because, in April 2011, an employee at the office disseminated protected, non-public procurement information in apparent violation of the Procurement Integrity Act. On his first day of work, retired Air Force Lieutenant Colonel Joselito Meneses shared with his co-workers sensitive pricing data he had obtained while at the Air Force that gave Booz Allen an unfair competitive advantage in an upcoming procurement. Meneses and four of the co-workers with whom he shared the data were also proposed for debarment. (A search of the EPLS today reveals that Meneses and two co-workers are still proposed for debarment. The other two employees’ suspensions were lifted in March.)

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Contracting Time Out for Booz Allen Hamilton

NEIL GORDON – (POGO) – February 8, 2012 – The Air Force has just suspended from federal contracting a unit of global consulting firm Booz Allen Hamilton and recommended it for debarment. The notice was posted in the Excluded Parties List System on Monday.

The EPLS record cites the action as a proposed debarment pursuant to Federal Acquisition Regulation (FAR) section 9.406-2, which outlines the various causes for debarment: conviction of or civil judgment for commission of fraud or a criminal offense in connection with a contract; violation of federal or state antitrust laws relating to the submission of offers; commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, violating federal criminal tax laws, or receiving stolen property; commission of any offense indicating a lack of business integrity or honesty; or serious violations of the terms of a federal contract or subcontract.

In a statement to Federal News Radio, Booz Allen said the Air Force’s action “relates specifically and solely to the San Antonio office and individually to two current and three former employees based there.” The EPLS notice indicates that the proposed debarment includes four individuals. According to the company, the incident “involved a former government employee who we hired who inappropriately retained and provided government procurement-sensitive information.”

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Neil Gordon: Two Former Watchdogs Ring in the New Year on the Other Side of the Revolving Door

NEIL GORDON – (POGO) – January 5, 2011 – Welcome to another episode of “As the Washington Revolving Door Turns.” The two latest ex-government officials to land jobs with private companies formerly served as very high-profile watchdogs of those companies.

The first revolver is Michael Thibault, former co-chairman and commissioner of the Commission on Wartime Contracting in Iraq and Afghanistan (CWC). The CWC released its final report in August and officially sunset a month later—with all of its internal records sealed from public view until 2031, unfortunately. Last month, Thibault joined DynCorp International as its vice president of government finance and compliance. Thibault worked for many years at the Defense Contract Audit Agency (DCAA), serving as Deputy Director from 1994 until 2005. Between his government postings at the DCAA and CWC, Thibault briefly worked for federal contractors Navigant Consulting and Unisys.

DynCorp, one of the three primary LOGCAP IV contractors, is currently the 32nd largest contractor in POGO’s Federal Contractor Misconduct Database. It has nine instances of misconduct since the early 2000s and $19.6 million in penalties. Readers of POGO’s blog are probably familiar with some of DynCorp’s checkered history, as are those who saw the 2010 movie “The Whistleblower”, which was based on the harrowing experiences of former DynCorp employee Kathryn Bolkovac.

Pentagon Seeks $756.9 Million Overpayment Refund From Supreme Foodservice

Tony Capaccio – (Bloomberg) – December 13, 2011 – The Pentagon is pressing one of the largest contractors in Afghanistan, Supreme Foodservice AG, to refund within 30 days overpayments of $756.9 million in unsupported transportation costs, according to a spokeswoman.

The Defense Logistics Agency made the decision last week“after extensive negotiations, in which Supreme and the agency were unable to agree on final rates” for a contract first awarded in December 2005, said agency spokeswoman Mimi Schirmacher in a statement.

Supreme Foodservice of Ziegelbrucke, Switzerland, through Sept. 30 has been paid $5.5 billion since 2005 to supply and transport food, water, three-layered corrugated packing boxes and other non-food items to U.S. troops in Afghanistan. It provides fresh fruits and vegetables to as many as 246 sites in Afghanistan under the agency’s “Subsistence Prime Vendor”program.

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