Oversight of interrogation contracts broke down, GAO finds

Numerous breakdowns in management and oversight occurred when the Interior Department, on behalf of military forces in Iraq, hired private sector interrogators to work in the notorious Abu Ghraib prison, according to a Government Accountability Office report released last week.

Government employees in many cases failed to understand their responsibility for overseeing the hired employees, and this created an environment in which the contractor took on roles and responsibilities normally reserved for government employees, the report (GAO-05-201) stated.

In 2003 and 2004, the Army asked a fee-for-service unit of Interior, called the National Business Center, to hire the interrogators. Interior used an existing contract held by CACI International Inc., a well-established Defense contractor that had supplied intelligence services to the Army in Germany in 1999.

GAO auditors found that the Army failed to provide sufficient and direct oversight of CACI employees in Iraq, as required under federal rules. Army officials who are supposed to oversee contractors on-site mostly "lacked knowledge of contracting issues and were not aware of their basic duties and responsibilities in administering the orders" placed under the contract, GAO concluded. "For example, they did not know that they were required to monitor and verify the hours worked by the contractor and instead just signed off on the invoices provided by the contractor," GAO found.

Also, Interior officials gave responsibility for administration of the contract to less experienced employees, failed to seek discounts in pricing for CACI's work and inappropriately expanded the contract-which it began managing in 1998-from information technology services to intelligence support. When auditors asked why those additions were made to a contract that was only supposed to cover certain commercial items, officials were unable to provide an answer, GAO reported.

In the absence of strong government management, the contractor took on a more official role, GAO found. "Because DOD and Interior officials effectively abdicated certain contracting responsibilities, the contractor was allowed to play a large role in aspects of the procurement process normally performed by government personnel," the report stated.

CACI employees determined the salary and benefits the company would pay the interrogators, and then selected the contract labor categories that would cover the salaries and benefits expenses, overhead and profit, GAO found. "CACI selected the labor categories in the contract for cost and pricing purposes, rather than as a reflection of the work to be performed," the report stated.

The work ultimately was found to be out of scope for CACI's technology contract. But GAO found that CACI employees identified the technology contract as the one Interior should use to procure the services. The company also developed requirements under the contract; drafted statements of work, one of which auditors found in official files drafted on the company's letterhead; and provided Interior with a draft justification for awarding the work to CACI on a sole-source basis, GAO found. Also, because Interior officials had such difficulty communicating with military commanders in the field, CACI became "a conduit for information" from Army to Interior officials, the report said. CACI also directly submitted invoices to Interior rather than, as is customary, submitting them through official channels, GAO found.

"Such a level of participation by the contractor creates a conflict of interest and undermines the integrity of the competitive contracting process," the auditors wrote. GAO used the interrogation contract as an opportunity to highlight problems that arise with fee-for-service agencies in general. When management controls and procedures aren't in place, "particularly in an interagency fee-for-service contracting environment, more emphasis can be placed on customer satisfaction and revenue generation than on compliance with sound contracting policy and required procedures," the auditors wrote.

While Defense has instituted new policies requiring its agencies to review and approve the use of outside contracts, the GAO noted that there's no system in place to track how those new rules are followed. The auditors recommended that the Defense secretary establish such a system. The department agreed, and said it was "considering establishing a community of practice on this issue," the report stated.

CACI took issue with the auditors' findings, arguing in written responses that the wartime environment compelled the government to act quickly, and that the orders fell within the scope of CACI's technology contract.

GAO rebuffed those objections, however, saying that it noted the wartime exigencies in its report, and that the government still failed to follow procedures that would have afforded greater flexibility in the ordering process. As to the scope issues, GAO responded, "While some of the services involved information technology, that, by itself, does not mean that those services (such as interrogation of detainees) can be ordered from CACI's GSA contract," which is reserved for technology, "not for any service that happens to involve the use of information technology," the report stated.

The report also revealed that some employees at Interior's fee-for-service shop believe they haven't received adequate training for their jobs. "Several contracting employees we spoke with were concerned about the frequency and consistency of training they had received. We found that employees took training on their own initiative and that the training was not monitored or enforced by managers," the report stated.