Army Corps of Engineers unit tightens contract standards

By Walter Pincus
Washington Post Staff Writer
Saturday, April 3, 2010

The U.S. Army Corps of Engineers unit with major construction projects in Afghanistan has set new standards for contracts, following a report from the Defense Department's inspector general saying that more than $20 million in performance-award fees could not be supported.

The report, made available Friday, says that the Army Corps of Engineers Middle East District had granted performance awards totaling approximately $20.6 million for construction tasks in Iraq and Afghanistan worth $116.4 million. It says the awards were granted "without sufficient support, justification or assurance that contractors were paid award fees commensurate with their level of performance."

In one case, the report says, "a single field evaluation report from an unknown source" was used "to support the award fee determination process."

In another case, an evaluation board did not explain what a contractor did to receive a high rating.

In January, the engineers unit was shown a draft copy of the report and said it had already put a moratorium on the use of award-fee contracts. In a memorandum attached to the report, the unit acknowledged the problems.

Joan F. Kibler, spokeswoman for the Army Corps of Engineers Middle East District, said Friday that the unit now awards fixed-price contracts, "so award fees do not apply . . . [to] new contract awards."

The change in the contracting standards comes as the Corps is expected to step up activity in Afghanistan, with about 165 projects costing an estimated $2.6 billion for fiscal 2010 and 2011, according to Army Col. Ronald N. Light, commander of the Engineers Gulf Region.

"The current surge in Afghanistan underscores [how] construction priorities change rapidly in the region, and the market rewards those firms that are poised to react and adapt to those dynamic priorities," Light said in a presentation in February to the Institute for Defense and Government Advancement's Military Construction Summit in Vienna, Va.

Light said that in the three months ending June 30, the Middle East District expects to award about 25 projects in Afghanistan, going from the $1 million to $5 million range to the $25 million to $100 million range.

Some of those projects will be central to the effort in southern Afghanistan, where U.S. forces are planning to secure Kandahar.

Light listed three separate $25 million to $100 million projects to be awarded to upgrade the Kandahar Airfield.

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