Behind Lockheed's No-Bid UN Contract, State Department Timing, DynCorp, Dissent

Byline: Matthew Russell Lee of Inner City Press at the UN: Exclusive

UNITED NATIONS, November 2 -- Documents obtained by Inner City Press reveal substantial disagreement inside the UN before a no-bid $250 million contract was given to U.S.-based military contractor Lockheed Martin, through its subsidiary Pacific Architects & Engineers, for the upcoming Darfur peacekeeping mission. Contrary to defense that have since been offered for the sole source process with Lockheed, that it was an unavoidable emergency triggered by the Security Council's July 31 resolution on the peacekeeping mission, and only Lockheed could provide the infrastructure services, numerous UN officials internally urged competitive bidding.

     Documents show that the decision to go sole-source with Lockheed was made as far back as April, three months before the Council resolution, based on a request by the chief of the UN's Department of Field Support, Jane Holl Lute. Click here for Ms. Lute's April 19 request and UN Controller Warren Sach's April 25 approval, which urged that any "follow on arrangements will be executed until established procurement procedures and rules" and that "DPKO develop a logistics concept no later than three months to respond to emergency situations of this nature to prevent reoccurrence of exceptions to competitive bidding." Contrary to Mr. Sach's proviso, more than five months later, a no-bid contract was given to Lockheed, outside of established procurement procedures.

            The reason for the second round of rushing, it now appears, went beyond the Security Council's July 31 resolution. Lockheed's contract with the U.S. Department of State was expiring on August 31, and that day the UN's Headquarters Committee on Contracts met on "an urgency reported by Procurement Services and the Department of Field Support... involving an award of a contract for the provision of the multi-function logistics services in Darfur." See Minutes, obtained exclusively by Inner City Press and now online here.  According to the Minutes:

"The Committee questioned the terms of the PAE contract with the US State Department (USDOS). In response, Procurement Services stated that they are given to understand that the contract with PAE is expiring at midnight today (31 August). They are also given to understand that a new bidding exercise is at the concluding stage with DynCorp and PAE as the two finalists vying for the new contract." (Page 4)

            The U.S. State Department had been criticized, including by U.S. government auditors, for lack of competition in giving its Darfur camp services contract to Lockheed's PAE. Therefore the USDOS has put it out to bid, and had another finalist, DynCorp (which has its own contracting issues with the U.S.). But Lockheed was able, despite the GAO criticism, to keep getting paid in Darfur on a sole-source basis, by being selected by the UN without bidding for the infrastructure contract. The Minute reflect substantial questioning and criticism of the process, and even a dissenting opinion, based on a lack of "comparators to the agreed price" and "overhead charged by PAE on airfield related services." Click here.  As the controversial nature of the approval, however qualified, to eschew competitive bidding for this contract because more clear, the participants decided to in essence further immunize themselves by convincing Secretary-General Ban Ki-moon to issue an October 2 letter waiving the applicability of procurement and other rules to the Darfur peacekeeping mission.

UN in Sudan, Lockheed Martin and competitive bidding not shown

            Ban's letter and its reasoning have been sited by defenders of the contract, notably from the Mission to the UN of the United Kingdom and of the U.S.. As reported, the U.S. Mission's spokesman on November 1 said that if there were irregularities beyond "innuendo" concerning the no-bid awarding of the Darfur contract to Lockheed, the U.S. would be the first ones to demand more transparency. That time has come.

            The August 31 Contract Committee Minutes also "note that the US Government has a contract with PAE for the provision of these kinds of good and services. The Committee was informed that the Procurement Service... had not been able to obtain all the prices under that contract from the US Government. The Committee opined that such prices could have been used as a benchmark. The Committee was not informed of the reasons why the US Government would not share such prices with the UN."

            These documents and others more generally lead some to see the involvement of the U.S. State Department, perhaps not through its formal Mission to the UN, as involved in the timing and no-bid awarding of the Darfur contract to Lockheed Martin. Others point to the hands-on involvement of the UN procurement official put in charge of the so-called "Darfur Team," Dmitri Dovgopoly. These sources say that Dovgopoly remains in touch, including by cell phone, with disgraced and convicted UN procurement official Alexander Yakovlev, who pled guilty among other things to soliciting bribes from contractors in the UN Oil for Food scandal.

            The day after the UN contract with Lockheed was announced, Inner City Press asked Ban Ki-moon why it had been done without competition. Mr. Ban said that it had been an emergency triggered by the tight timelines in the Security Council's July 31 resolution, but vowed that the UN would be transparent about the contract. But Ban's spokesperson then reversed course and said that the contract will not be made public. It is in this context that Inner City Press is putting online the Headquarters Contract Committee meeting minutes and the Lute - Sach correspondence of April, putting the sole-source process in place, with a three month time limit, well before the Council's July 31 resolution, and five months before Lockheed got its $250 million no-bid contract. The time for more transparency has come. Watch this site.

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Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund.  Video Analysis here

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