Pentagon Suckered into Grossly Overpaying for Simple Parts
Wednesday, August 03, 2011
A Dubai-based contractor has been accused of overbilling the Department of Defense by more than $4 million for work in Iraq.
According to the Special Inspector General for Iraq Reconstruction (SIGIR), Anham LLC and its subsidiary, Pioneer Iraqi Trading Co., made the Pentagon pay $900 for an electronic control switch valued at $7.05.
Anham overbilled for a $183 circuit breaker, instead charging $4,500. The Pentagon also paid $3,000 for a $94.47 circuit breaker and $80 for a piece of drain pipe valued at $1.41. And Anham charged $20,000 to plug in a loudspeaker system.
The egregious billings were part of a $300 million contract awarded to Anham by the Pentagon, which has paid the contractor nearly $4 billion for projects in Iraq and Afghanistan.
SIGIR also discovered that a member of the family group that owns 50% of Anham also owns a 90% share in Pioneer, although this relationship was never disclosed to the Defense Contract Management Agency.
Anham is a provider of vehicles and other transportation, construction, facilities management, procurement, food, power generation, health management, surveillance and training services.
The company has refuted SIGIR’s findings, saying the auditor’s “conclusions are false, without legal or factual justification.”
Dubai Company Billed U.S. $900 for $7.05 Iraq Electric Switch, Audit Says (by David Lerman and Tony Capaccio, Bloomberg)
July 2011: Quarterly Report and Semiannual Report to Congress (Special Inspector General for Iraq Reconstruction)
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