By Ellen McCarthy Washington Post Staff Writer
Thursday, July 8, 2004; Page E01
CACI International Inc. will not be banned from doing business with the federal government, the General Services Administration told the company yesterday.
The GSA told the Arlington defense contractor in a letter that it will not be prohibited from federal contracts for using an information technology contract to provide the Army with interrogators in Iraq, including at the Abu Ghraib prison.
The GSA can bar companies that act unethically or violate federal contracting rules. "I do not feel that, at this time, it is necessary for me to take any formal action to protect the interests of the Federal government," Joseph A. Neurauter, GSA's suspension and debarment official, wrote in the letter.
Neurauter did raise a number of issues, including the role CACI employees played in writing the language used to describe some of the work the company would perform in Iraq.
"I believe that CACI's possible role in preparing Statements of Work continues to be an open issue and potential conflict of interest," Neurauter wrote. He asked the company to respond within two weeks to questions he raised.
"We were very pleased with the outcome," CACI chief executive J.P. "Jack" London said in an interview. "It was an appropriate conclusion to the review, one that we were hopeful for."
The threat of debarment from federal contracts shook investors because the company got 92 percent of its revenue from federal clients last year. Its stock price dropped 12 percent, to $37.48 a share, the day the GSA investigation was announced. It rose $2.04 yesterday to close at $41.40.
The GSA began an inquiry into CACI's procurement procedures in May.
The issue involves a GSA contract awarded in 1998 to Premier Technology Group Inc., a Fairfax firm that CACI acquired last July. The contract, managed by the Interior Department, was designed to allow federal agencies to quickly purchase information technology products and services from the company.
Last year the Army used the contract to hire CACI for interrogation support in Iraq. GSA officials have said the agency's regulations require contractors to notify officials if they are asked to perform services that fall "outside the scope of their contract."