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Contractor, Army Office Fell Short, Audit Finds

Report Examines Reconstruction in Iraq

By Griff Witte
Washington Post Staff Writer
Saturday, April 23, 2005; Page E01

A controversial British firm responsible for a $293 million U.S. Army security contract in Iraq could not prove that its armed employees received proper weapons training or that it had vetted Iraqi employees to ensure they did not pose a threat, according to a government audit released yesterday.

In addition to criticizing Aegis Defence Services Ltd., the audit took aim at the Army's contracting office in Iraq for poor oversight. It reported that the official who was supposed to keep watch over Aegis's contract had not been trained in either monitoring contracts or security. The office was also severely short-staffed: At the time of the audit, 41 officials were administering 6,500 contracts and task orders.

The findings mean "there is no assurance that Aegis is providing the best possible safety and security for government and reconstruction contractor personnel and facilities," according to auditors with the Office of the Special Inspector General for Iraq Reconstruction.

Aegis, an almost three-year-old London-based firm whose chief executive provided military assistance to warring factions in Asian and African conflicts in the late 1990s, received its Iraqi security contract last May. With the award, Aegis was put in charge of providing armed bodyguards for the Army's Project and Contracting Office, which oversees reconstruction projects, as well as coordinating security for 10 other prime contractors in Iraq.

An Aegis spokeswoman responded to the audit with a statement noting that "the auditors found that Aegis was generally in compliance with the terms of the contract," and, "As a result of our performance to date our contract has been formally extended for a further year." The original contract was for one year, with options to extend it for two more.

Yesterday's report came in the midst of other reminders of the security challenges that Iraq continues to pose. On Thursday, six Blackwater USA contractors were killed when the helicopter in which they were riding went down north of Baghdad. And yesterday, Halliburton Co., the single biggest U.S. contractor in Iraq, said it may have to pull out of work restoring Iraqi oil fields because of insurgent attacks.

While Aegis generally met its requirements in providing security to U.S. officials and other contractors, the auditors reported, the company fell short in several key areas. A random survey of 20 Aegis employees who had been issued weapons -- including AK-47 and M4 assault rifles -- showed that the company did not have the needed weapons training documentation for 14 of them. As a result, auditors could not say whether "all contractor personnel are qualified on the weapons that they had been issued."

The inspector general's report also faulted the company for not adequately documenting background checks on its 125 Iraqi employees. While the company was supposed to conduct interviews and other checks on the employees to make sure they did not pose "an internal security threat," auditors found documentary evidence that the vetting process was often lacking.

Maj. Gen. Daniel E. Long Jr., director of the Project and Contracting Office, wrote in a letter responding to the audit that his office generally concurred with the criticisms and was working to correct them.

The special inspector general's office, which was created by Congress, provides oversight of the billions of dollars in U.S. government funds being spent to rebuild Iraq following the United States-led invasion in 2003. It has issued 16 reports and has at least 10 others in progress, a spokesman said.


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