U.S. gave firm low rating for Afghan work — and more business

McClatchy NewspapersFebruary 14, 2011 

WASHINGTON — A U.S. contractor who's continued to receive government contracts despite criticism of its work in Afghanistan got low ratings for its performance on two more high-profile projects in the war-torn country than had been disclosed previously.

McClatchy has learned that the U.S. government criticized Black & Veatch for poor oversight and delays on a Kabul power plant project and for a study of the viability of developing a natural gas field in the Sheberghan region in northern Afghanistan.

McClatchy has pressed the U.S. government for more than a year to offer its assessment of the projects for a series of stories about U.S. contractors in Afghanistan. But the U.S. Agency for International Development, the main agency overseeing the projects, has declined to describe its doubts about the company or its work.

It turns out that the USAID gave the company "unsatisfactory" ratings in 2008 and 2009 on the quality of work, its management and its adherence to a schedule on the gas study. The agency also gave the company a "poor" rating for the quality of its service on the power plant and an "unsatisfactory" rating for its construction schedule for the plant.

The Commission on Wartime Contracting, an independent, bipartisan legislative panel established to study U.S. contracting in Iraq and Afghanistan, is holding a hearing Monday at which company officials and other contractors will testify.

The congressionally created commission recently criticized the USAID for awarding a $266 million sole-source contract to Black & Veatch in November that includes refurbishing the Kajaki dam, a major pillar in the effort to revive the economy in southern Afghanistan's Taliban strongholds. The agency exempted the company from competing for the work, claiming that competition would "have an adverse effect on programs."

Black & Veatch defended its projects, saying that it worked on the gas field study "under difficult circumstances."

The company noted that in the most recent evaluation of the power plant, the USAID rated its performance as "good" and its compliance with safety standards as "outstanding." Black & Veatch blamed problems with a subcontractor for the delays at the plant, an assertion the subcontractor has disputed.

McClatchy also has learned that another major contractor, Louis Berger, has fallen almost a year behind on an important road project for the U.S. government. Louis Berger is expected to appear before the contracting commission at a later date.

The road project is supposed to stretch 63 miles between Gardez and Khost. But construction on an 18-mile section has stalled since the subcontractor fled because of deteriorating security conditions. As a result, the road could cost as much as $33 million more, bringing the total to $177 million.

The USAID said that heavy — sometimes incessant — insurgent attacks had delayed the project.

Last spring, for example, insurgents attacked the work force almost daily. In one attack, two people were killed. Soon after, the subcontractor refused to resume work.

"The Gardez-Khost Highway is a classic example of how dangerous it can be to build a road in a war zone in rugged terrain," the USAID said in a written response to McClatchy's questions. "These threats and delays require manpower changes, planning alterations, delays. Cumulatively they become expensive."

The agency said the highway was a vital link between the isolated province of Khost and the rest of the country.

"Because it is expected to be a major trade route to Pakistan upon completion, failure to complete this road will have serious consequences for Khost province, including a significant loss of economic benefits," the USAID said. "This is one reason that insurgents have targeted it."

Louis Berger said it had awarded a new contract to two Afghan companies to finish the work and didn't expect the road project to stall again.

"We have developed strong working relationships with the local communities and government," the company said. "The local communities not only provide us with a work force and equipment but also with security intelligence, because they want to see this road built."

One of the wartime contracting commissioners has questioned whether the USAID should be more skeptical of Louis Berger, given its troubled history.

Late last year, the company agreed to pay a nearly $70 million fine for knowingly and systematically overcharging the U.S. government. In 2006, the USAID tapped Louis Berger and Black & Veatch to jointly oversee $1.4 billion in reconstruction contracts in Afghanistan, even after a whistleblower came to the U.S. government with the overbilling allegations.

"USAID seems remarkably uncritical of Louis Berger's shortcomings," said commissioner Charles Tiefer, who's a professor of government contracting at the University of Baltimore School of Law. "This new instance of USAID tolerating delays and cost overruns by Louis Berger fits only too well with the agency letting them get away with a plea without suspending them from government contracts for even one day."

USAID officials, however, said they were trying to hold contractors accountable.

"USAID recognizes it is a steward of the U.S. taxpayers' dollars, and we continuously re-evaluate the costs and the benefits to ensure that public funds are used judiciously," the agency said.

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