CACI Faces New Probe Of Contract

Interrogators Hired Under Army IT Deal

CACI International Inc. said yesterday that the General Services Administration is investigating whether the Arlington-based company violated contracting rules and whether it should be banned from future government contracts.

Most of CACI's business comes from the federal government. News of the investigation sent its share price down 12 percent to close yesterday at $37.48. CACI shares have fallen 18 percent since April 30, the Friday before reports broke that one of its interrogators, Steven A. Stefanowicz, was implicated in an Army investigation into abuse of Iraqi prisoners at Abu Ghraib prison in Baghdad.

CACI chief executive J.P. "Jack" London said the GSA is investigating how the company was able to use an information technology contract to hire and supply civilian interrogators to the Army. "That's the scope, at least at this point, of their investigation," London said in a conference call with analysts.

"If there have been some mistakes on our part from the contracting side, inadvertently, we will work diligently to correct them," London said. "We anticipate that the government will accept our efforts to remedy these problems and that either any suspension or debarment actions will not be needed."

The GSA sent a letter to CACI on Wednesday requesting information about the contract, said Mary Alice Johnson, a GSA spokeswoman. "The suspension and debarment official of GSA . . . asked CACI to come in and talk," Johnson said. "Some things have come to that individual's attention and he has asked the company to come in and discuss them."

London said CACI is aware of four other investigations into the company's involvement at Abu Ghraib in addition to the GSA's. Those include inquiries by the Army's Office of the Inspector General, the Defense Contract Audit Agency, the military intelligence investigation led by Maj. Gen. George R. Fay and the Interior Department's inspector general.

An Army report on Abu Ghraib accused Stefanowicz of encouraging soldiers to set conditions for interrogations and said he "clearly knew his instructions equated to physical abuse." Stefanowicz's lawyer has said his client was wrongly accused.

CACI's interrogation work for the Defense Department was done under a contract managed by the Interior Department. The contract was a blanket-purchase agreement, a type of contract that is large and vaguely worded to give agencies flexibility and to speed up purchases. CACI's contract was designed for purchases of information technology services and equipment, but the Interior Department's contracting officer approved an Army request to use the contract to buy interrogation services.

The GSA, in addition to the Interior Department, has oversight over the contract because it monitors large blanket-purchase agreements for federal supplies and services.

Johnson said companies are required to notify contracting officials if their government clients are requesting products or services that fall "outside the scope of their contract." She said that there is no set penalty for contractors that do not comply, but that GSA can impose a range of enforcement actions, including temporary and permanent suspensions.