Bloomberg News

DynCorp Let Off Hook by U.S. for Poor Work, Audit Finds

October 25, 2012

The Army Corps of Engineers freed DynCorp International Inc., one of the largest U.S. contractors in Afghanistan, of responsibility for construction at an Afghan Army garrison even though long-standing deficiencies remain, according to an inspector general’s report.

In a 2010 audit, Pentagon inspectors identified failings at the camp in northern Afghanistan that included “poor site grading” and “serious soil stability issues.” Inspectors returned in March of this year to find “additional structural failures, improper grading and new sinkholes,” the Special Inspector General for Afghanistan Reconstruction said in an audit issued today.

DynCorp, which is owned by affiliates of New York-based Cerberus Capital Management LP, oversaw the construction at Camp Pamir in Afghanistan’s Kunduz province. The DynCorp project was part of a U.S. effort to train and house the Afghan Army, which is growing this year to 195,000 personnel.

“Despite the unsatisfactory performance of the contractor, DynCorp,” officials from the Army Corps’s District North region in Afghanistan “released DynCorp from further contractual liability,” John Sopko, the inspector general, wrote in today’s report. The company was paid $70.8 million on the contracts, “releasing it from any further liabilities and warranty obligations.”

DynCorp’s Comment

“We absolutely disagree with several of the report’s conclusions concerning the causes for the issues experienced at this site,” Ashley Burke, a DynCorp spokeswoman, said today in an e-mail. “Further, work was completed and this contract was closed out last year so we are unable to comment on 2012 site conditions that may or may not exist today.”

DynCorp turned over responsibility for the site in 2011, and the current occupants have been accountable for maintenance and care of the facilities since then, Burke said.

Other contractors were doing additional construction and grading work by the time inspectors returned, she said. The company was still reviewing the report, which it didn’t see in advance of its release, Burke said.

Delays at the Kunduz complex hampered training, the special inspector general found in the April 2010 audit. Afghan troops had to be housed in temporary facilities that exposed them to mud, freezing conditions, sewage and unsafe food storage, auditors told Bloomberg News in June 2010.

The contract release, in the form of a December 2011 settlement, “appears to be on unfavorable terms to the U.S. Government,” Sopko said.

‘Questionable’ Terms

Sopko called the settlement terms “questionable” with a “lack of adequate explanation,” in a cover letter dated today to U.S. Central Command Commander General James Mattis and U.S. Forces-Afghanistan commander General John Allen.

Corps of Engineers Transatlantic Division Deputy Commander Colonel John Hurley said in a written statement included in the inspector general’s report that the organization “has initiated an in-depth review of the rationale for the settlement.”

“Many of the key players involved with the settlement are no longer in country and arrangements are being made to obtain and evaluate their rationale,” Hurley wrote. The Corps wants to complete the review by November 9, he said.

Sopko wrote that the camp is “at risk of further structural failures, the construction contractor is not liable and further remediation to protect the initial investment” will require more funds that should be “justified and closely monitored.”

An example of the lingering deficiencies was found during a March 25 inspection at an electrical power transformer where inspectors found “a sinkhole developing and general structural settling,” according to Sopko’s report.

“Failure of the transformer would result in a loss of electrical power over a large portion of Camp Pamir, causing significant financial loss and increasing the risk of injury through fire and electrical shock,” he said.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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