DOD Officials Take Heat From House Panel
On Iraq Contracting; DOJ to Probe Halliburton
"Contractor performance in Iraq has not been perfect, but it has not been terrible," Zakheim told the committee, recognizing the difficult conditions under which the contractors are working in Iraq. "We believe that contractor financial and internal control problems will resolve themselves," he said, but reiterated that his people will "take whatever steps are necessary to protect the government's financial interests."
Dining facilities subcontract costs. DCAA found that KBR did not adequately support billed dining facilities costs and that meals billed "significantly" exceeded meals served. This finding led to agreements with KBR where the company is voluntarily withholding $140.7 million in future billings and DCAA is suspending $35.8 million in current billings (81 FCR 175).
Violation of Anti-Kickback Act. KBR discovered and reimbursed the government for $6.3 million that might have been paid to two former employees in the form of kickbacks. Zakheim emphasized that this kind of reporting should be encouraged and KBR should not be faulted for it (81 FCR 78).
Application of the FAR. DCAA found that KBR was not observing the 85 percent limit in the reimbursement vouchers it submitted for its undefinitized LOGCAP task orders. Zakheim said that applying the 15 percent withhold to all costs billed under undefinitized LOGCAP task orders could result in a reimbursement of $200 million.
Zakheim told the committee that allegations by these government employees contributed to DCAA's decision to refer the fuel overcharging issue to the DOD IG.
KBR is also under investigation by the State Department.
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http://subscript.bna.com/SAMPLES/fcr.nsf/0/61a2bc731759dfa885256e59001c8d73?OpenDocument However, now Dov Zakheim, former DOD Comptroller is under investigation!
DOD IG is investigating Zakheim, who reported directly to Paul Wolfowitz. Apparently there is the matter of the money that was appropriated for Afghan reconstruction that got sidetracked for the invasion of Iraq before there was any Congressional authorization for doing so.