Libya operation causing headaches for U.S. contractors, grantees

As U.S. and coalition forces continue to pound Libyan leader Moammar Gadhafi defense systems from the air and sea, U.S. contractors and grantees operating in the embattled country have ceased their operations as they wait for the violence to ease, according to several interviewed by Government Executive.

The federal government, almost exclusively through the State Department and the U.S. Agency for International Development, since 2006 has spent more than $25.6 million on more than 750 contracts and grants with private companies, universities and nongovernmental organizations for myriad projects in Libya, according to the USASpending.gov database of federal contracts.

That figure has declined somewhat in recent years, with only $4 million spent for work in Libya in fiscal 2010 and roughly $1.2 million thus far in fiscal 2011. A portion of the funds allocated in recent months has been devoted to rescue-and-relief operations related to the ongoing crisis.

But other groups performing work unrelated to the Libyan uprising have found themselves desperately trying to escape the pandemonium of the past few months.

For example, the International Organization for Migration, an intergovernmental group focused on migration assistance, was issued a $500,000 grant by State last September to train Libyan police, judges and prosecutors on measures to combat human trafficking. That work is now on hold as all of the group's international aid workers have been evacuated.

"We are at a standstill now," said IOM spokeswoman Niurka Pineiro. "There is no way to conduct these activities in the chaos over there now."

Most of the organization's international staff in the region -- they also have locally born workers -- have fled toward the border near Tunisia or Egypt, where they are helping migrant workers flee the violence and head back to their home countries.

Other federal grantees, meanwhile, benefited from fortuitous timing. For four and a half years, Baylor College of Medicine in Houston has worked with Libyan doctors and nurses under a State Department grant to expand services to 420 HIV-infected children in Benghazi, the country's second-largest city.

On a periodic basis, the college would send officials to work in person with medical officials in Benghazi. But when the airstrikes began on Sunday, no American staff were on the ground in Libya, said Dr. Mark Kline, president of Baylor's Pediatric AIDS Institute. While their staff is safe, Kline is frustrated that his work has been halted.

"In the short term, it won't be a big deal," he said. "But if this continues in the long term, this could have serious implications for the children there."

The State Department on Feb. 25 issued a travel advisory to all American citizens in Libya, urging them to depart the country as tensions rose. Although no specific warnings have been issued for contractors or grantees, department spokeswoman Nicole Thompson said very few Americans, with the exception of journalists and individuals with dual citizenship, should remain in the country at this point.

"Most companies and organizations that are professionally run and travel frequently are familiar with our warning messages and know what to do," Thompson said.

It is difficult to get a clear picture of who the U.S. government has hired to perform work in Libya. State and USAID have issued more than 640 contracts, worth more than $7 million, to companies designated as "miscellaneous foreign contractors," according to the federal database. The vague classification allows the government to mask the identity of its contractors, though these companies can be foreign subsidiaries of large American-based firms.

Few of these contracts are classified. For example, a $12,000 contract was issued last August for carpeting while nearly $3,400 was spent on catering services in March 2010 at the U.S. ambassador's residence. But in both cases, it is impossible to determine the identity of the companies involved, whether they are American or whether they are still in the region.

The lack of clarity also prevents the public from learning whether the U.S. has any ongoing contracts with the government of Libya or firms controlled by Gadhafi. A Feb. 25 executive order by President Obama froze all Gadhafi's assets and those of his government.

The order also applies to any contracts the United States has with the Libyan government, including its "agencies, instrumentalities and controlled entities," said Curt Dombek, a partner with the Washington law firm Sheppard Mullin.

"The sanctions extend to dealing in contracts in which the Libyan government 'has an interest,' so a U.S. company that hired another company operating in Libya would not be allowed to proceed if the Libyan government were deemed to have an interest in their contract, or if the company hired in Libya had a contract with the Libyan government in which the U.S. company was deemed to be dealing," Dombek said. "In other words, the 'dealings' and 'interests' that are affected by the sanctions can be indirect dealings and interests."

The Obama administration also recently has begun issuing contracts focused on providing aid, relief and assistance to those who remain in Libya. USAID issued a $1 million contract on March 11 to the World Health Organization for "health activities in Libya." And an additional $210,000 has been allocated by USAID to two U.S.-based firms to charter individuals and property out of the region, according to the database.

Chapman Freeborn Air Chartering, a company based in Fort Lauderdale, Fla., was awarded a $161,000 contract for freight air transportation out of Libya last week. Andy James, regional manager for Chapman Freeborn's London offices, did not have specific information on the contract, but said the company has evacuated roughly 13,000 foreign workers and refugees from the country since the street protests began last month. The majority, he said, have crossed the border into Tunisia.