Contractor Gets $30+ Million but Didn't Build Anything

By D. Cupples |  Even before the Iraq war, it was common for government contractors to find creative ways to bilk us taxpayers out of money: defense contractors, insurance companies, drug companies, hospitals, general equipment suppliers....  Since the Iraq war, we cannot scan news reports or government records without running smack into evidence of contractor fraud.

The latest story, printed Friday, indicates that the U.S. Military paid a Florida contractor nearly $32 million to build offices and barracks for Iraqi military units -- but nothing was ever built, because the project was abandoned.  USA Today reported:

"The project had to be abandoned because the Iraqi Defense Ministry couldn't obtain rights to the land where the headquarters was to be built, according to a report released this month by the Defense Department's Office of Inspector General. Contracting records show the buildings would have housed one brigade and three battalions of the Iraqi military in Ramadi, a hotbed of the Sunni Muslim insurgency and capital of Anbar province.

"Still, the Air Force agency overseeing the project paid contractor Ellis Environmental Group $31.9 million of the $34.2 million obligated for the project, the report said.

"An Air Force spokesman, Michael Hawkins, said in an e-mail that Air Force auditors are reviewing the contract. Although the inspector general's report said the Air Force was considering suing the contractor, Hawkins said any talk of a lawsuit was premature until the Air Force audit is complete.

"Ellis Environmental Group spokesman Steve Brownstein said the work was reassigned to Ellis World Alliance Corp., a related company. Bob Smith, of Ellis World Alliance headquarters in Gainesville, Fla., said contracting rules barred any official comment." (USA Today, reprinted in Army Times)

At some point, Ellis likely should have known that -- in fact -- it was not building or had not built the barracks and offices in Iraq that the military contract had called for.  Similarly, the military should have known that the building project had been cancelled and that it didn't owe Ellis $32 million.

Our nation's problems with contractors are two fold: 1) contractors aren't always on the "up and up," and 2) federal agencies don't put enough resources into monitoring contractors.

For an idea of how common contractor waste, fraud and abuse has been, see the posts linked below.

Related BN-Politics' Posts:

* Re-visiting the Privatization Myths of the 1980s

* Contractor Fraud: Driving up Healthcare Costs

 

* Govt. Contractors: Driving up War's Costs?

* Private Insurers Milking Medicare 

* Whatever happened to the 190,000 Missing Weapons?

* "Billions over Baghdad": Poor Accounting Enabled Waste & Fraud

* Blackwater Took Iraqi Airplanes, CEO Misled Congress?

* DoD Rewarding Bad Contractor Performance?

* Taxpayers Losing Money to Engorged Contractors

* Inspector General Blocked Investigations re: Waste and Fraud?

* Embassy in Iraq: Waste, Bad Planning & Contractor Fraud?