Iraq: Report Rips SAIC Over Contracts

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In a scathing report yesterday, the Pentagon's inspector general sharply criticized contracts issued last year to San Diego's SAIC for reconstruction and humanitarian work in Iraq.

The inspector general's findings were part of a broader review of two dozen relatively small contracts issued in the months after U.S. troops moved into Baghdad. The report found Pentagon procurement rules were not followed in 22 of 24 deals awarded by the Defense Contracting Command.

Defense auditors said there were initially no written plans or strategies and no acquisition support for reconstruction and humanitarian efforts in post-war Iraq. As a result, these defense acquisitions were plagued by poor planning and inadequate government oversight.

In particular, defense auditors highlighted problems with SAIC's work to create a free and independent Iraqi Media Network, or IMN, that was ostensibly to be modeled on Britain's BBC.

The Defense Contracting Command awarded the $15 million contract to SAIC on March 11, 2003, without an acquisition plan or competitive bidding. By the end of September, however, SAIC's costs under the contract had escalated to $82.3 million.

The command justified the award by saying SAIC was the only acceptable contractor to take over Saddam Hussein's broadcast network and that there was an unusual and compelling urgency for the sole-source contract.

But SAIC's work to create IMN began to come under criticism several months ago for its amateurish quality and chauvinistic broadcasts.

Former NBC correspondent Don North, who worked in Baghdad as a senior TV adviser on the project, wrote in TelevisionWeek last year that instead of operating as an independent and democratic media outlet, "IMN has become an irrelevant mouthpiece for Coalition Provisional Authority propaganda, managed news and mediocre programs."

The inspector general's report, however, uncovered more troubling practices by SAIC managers in Iraq.

For example, the report said SAIC's media program manager sought to purchase a Hummer H2 and a Ford C-350 pickup for his use on the contract and he chartered a DC-10 cargo jet to fly the vehicles to Iraq.

When a defense acquisition specialist refused to allow these items to be added to the contract, the manager "went around the authority of this acquisition specialist" to a high-level Pentagon office and gained approval, the report said.

Contracting officers were unable to pinpoint the exact cost of the airlifted vehicles, although one invoice titled "Office and Vehicle" totaled roughly $381,000.

Ben Haddad, spokesman for the company also known as Science Applications International Corp., said yesterday it was difficult to comment because he had not yet reviewed the inspector general's report.

"SAIC has worked very diligently to ensure that we're performing to the customer's satisfaction," Haddad said.

The inspector general's report concludes that "In each phase . . . DCC-W (Defense Contracting Command-Washington) cut corners, from generating the initial requirements to surveillance of the contractor."

In 22 of 24 contracts reviewed, the "DoD cannot be assured that it was either provided the best contracting solution or paid fair and reasonable prices for the goods and services purchased," the report said.

It recommended "appropriate administrative action" be taken against officers who did not follow the rules.

The commander of the Defense Contracting Command-Washington acknowledged that his office had taken shortcuts, the inspector general's report said. Still, the commander said the report "represented a serious injustice to the personnel in his command, was riddled with faulty assumptions, erroneous conclusions."

The $82.3 million spent on the Iraqi broadcast network accounted for most of the work that SAIC performed for the Coalition Provisional Authority in Iraq, the report said.

Of the 24 contracts reviewed, eight were awarded to SAIC (including the TV contract) for a total of $108.2 million. That amounted to roughly 88 percent of the $122.5 million awarded for the 24 contracts.

The inspector general report noted that one SAIC contractor was paid even though he was on vacation. In another, a "subject matter expert" hired for SAIC's media contract was instead put in charge of determining how to dispose of garbage in Iraq. He was then assigned a role for advising Iraq's Ministry of Youth and Sport.

The Pentagon moved several months ago to seek competitive bids for a new contract to rebuild Iraq's broadcast network. In January, the Pentagon awarded a $96 million contract to Harris Corp. of Melbourne, Fla., to take over the project.
The full report can be found on the inspector general's Web site (
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