Controller Called No-Bid Darfur Contracts a "Troubling Pattern," PAE in Congo
Matthew Russell Lee of Inner City Press at the UN: Exclusive
November 12 -- The UN's award of a
$250 million no-bid contract to Lockheed
Martin for Darfur peacekeeping
infrastructure, which the UN has said was the work of its Procurement Division,
was in fact heavily criticized by the UN's own Controller, as head of the
Procurement Division, documents show. In a
July 20, 2007 memo to Jane Holl Lute,
chief of the UN's Department of Field Support (DFS), Mr. Sach wrote under the
headings "Darfur Sole Source negotiations with PAE for Multifunctional Logistics
Services" and "Fuel Contract for Darfur" that
"With regard to the Darfur Planning Team
of DPKO, I understand that it has been tackling this project for over 18 months.
Regrettably, this effort failed to yield the expected result in a Scope of
Requirement, the basis for competitive procurement action to take place... I
sincerely hope that you are aware that those actions constitute a pattern, to
which Oversight bodies of the UN may be less charitable toward and may well find
the pattern as troubling." Memo online
"sole source" contract with Lockheed Martin's Pacific Architects & Engineers (PAE)
subsidiary has given rise to several rounds of questions, and ever-shifting
defenses of the lack of competition. These defenses have in effect tried to
shift responsibility for the decision to seek to suspend normal bidding away
from Jane Holl Lute, the official who, available
documents show, first requested sole
source to PAE on April 19, to
the more amorphous Procurement Division, a side-stepping which the
published today appears to refute.
Repeatedly UN spokespeople have said that the Security Council's July 31, 2007
resolution triggered the need to contract with Lockheed on a no-bid basis, to
move quickly. But Inner City Press has obtained and published an April 19 memo
from Jane Holl Lute arguing even then, more than three months before the
Security Council resolution, for "a sole source contract with PAE." Click
the memo, and
the Headquarters Committee on Contracts minutes, which recite that the U.S.
Department of State, after its own sole source deal with Lockheed's PAE, had
finally put the contract out to bid, with DynCorp also a finalist. Only then did
the UN take over (or "inherit," as Mr. Guehenno put it) the AMIS contract, also
on a sole source basis with Lockheed's' PAE.
Sach's just-released memo
to view -- says clearly that "AMIS' contract may not represent the best value
for the UN." Jane Holl Lute, the memo at under the heading AMIS says, was "suggesti[ng]
to assume AMIS support contracts without renegotiation."
Warren Sach, no-bid Darfur
contracts not shown
Lute has yet to answer any questions about the no-bid contract for U.S.-based
Lockheed Martin's PAE. In fact, UN spokespeople have repeatedly sought to divert
the questions from the role of DFS and Jane Holl Lute onto the lower profile
(and less involved) UN Procurement Department, which was circumvented by the
no-bid contract pushed by Jane Holl Lute since, at latest,
April 19, 2007.
At the UN noon
briefing of November 6, asked UN Deputy Spokesperson Marie Okabe to explain how
the previous defense of the no-bid contract, that competition was not possible
after the July 31 Security Council resolution, with the April 19 date of Ms.
Lute's request to go sole source to PAE. Ms. Okabe, as best as Inner City Press
could make out, and contrary to
Ms. Lute's April 19 memo,
maintained that the July 31 Security Council resolution was the answer. Video
More specifically, Ms. Okabe said that the no-bid contract to Lockheed
"was a procurement decision and as you know the action was taken by the
procurement department. You're referring to something from another department.
I'm not aware of that." From the
Press: Maybe you'll get back to it. There seems to be an authenticated
document from Jane Holl Lute to Warren Sach, dated 19 April, saying, quote, "We
request your approval for sole-source contract, with the same company, PAE."
As I mentioned, this was a decision taken by procurement and not by the
department that you mentioned, so the information that we have is that our
procurement operation went ahead with this decision based on all the reasonings
that we've given you up to this date. I have nothing further than that.
But in the
memo being published
today, Warren Sach speaking for the Procurement Division expressed deep
reservations to Jane Holl Lute about the "patterns" of Peacekeeping and Field
Support, stating that "those actions constitute a pattern, to which
Oversight bodies of the UN may be less charitable toward and may well find the
pattern as troubling."
caused by jamming through the no-bid contract with Lockheed Martin extends, UN
sources requesting anonymity from fear of retaliation say, to providing yet
another basis for skepticism about, and delay of, the long-promised Darfur
peacekeeping mission. While to date the Office of Internal Oversight Services
has been notably silent, the General Assembly's budget (5th) committee will
soon, albeit after-the-fact, consider the Darfur mission budget, including the
no-bid contract. In the run-up, one further pertinent fact: PAE being selected
despite its inflated prices was already subject to criticism, including by the
GA's Advisory Committee on Administrative and Budgetary Questions. In a
March 11, 2002 session on UN's
peacekeeping mission in the Congo
expressed concern at the decision to award a contract for air services to a
company that was not the lowest bidder. The representative of Ghana was
seriously concerned by the reports of an overrun of outsourcing policies and
procurement procedures carefully laid down for tendering and selecting bids. At
a time when the international community was asking for more resources for United
Nations peacekeeping operations, it was a sad commentary to witness such a gross
dissipation of resources."
To which company was this contract
awarded? PAE. The
a contract for
provision of airfield services to MONUC. In March 2001, the Field
Administrative and Logistics Division conducted two technical evaluations of
bidders and recommended award of the contract to Pacific Architects and
Engineers Inc./Daher. The ACABQ finds that the role played by FALD (FALD) in
awarding the contract contradicts the basic "conflict of interest" principle, by
which departments that prepare requisitions for services are barred from
recommending providers of those services. The contract, which is valid until 30
June 2002, was awarded owing to "operational necessity" for an amount not to
exceed $34.22 million for one year.
The choice of
PAE/Daher over the lowest bidder raises troubling questions, the report
continues. The lowest bidder appears to have been rejected because of several
factual and interpretation errors made during the technical evaluation. The
Advisory Committee understands that MONUC had serious reservations regarding the
contract, indicating that works costing up to $14.8 million were not needed
since MONUC staff and a South African service provider were providing airfield
services. After consulting with the Department of Peacekeeping Operations,
however, MONUC withdrew its reservations. It appears that the role of MONUC
officials in monitoring and controlling expenditures may have been undermined.
There is a pattern here, as even Warren
Sach put it. If in 2002, PAE's non-competitive $34.22 million contract was of
"concern" as involving a "conflict of interest," how about PAE's no-bid $250
million contract in 2007? Given that this is the very same company being favored
by the UN, "those actions constitute a pattern," as Warren Sach's memo
puts it, "to which Oversight bodies of the UN may be less charitable toward and
may well find the pattern as troubling."
Notably, permanent Security
Council member the United Kingdom still does not believe it has any
responsibility for the no-bid Darfur contract. On October 24, Inner City Press
asked UK Amb. John Sawers if he thought there should have been a competitive
process -- some argue that the sole-source award to U.S.-based Lockheed Martin
has needlessly handed Sudan an issue. Amb. Sawers said, video
Minute 4:54, "I don't have a particularly strong view on that. The
Secretary-General was asked a question on that and he responded. I think it's a
matter for the UN."
Who is "the UN," if not the UK,
permanent member of the Security Council and drafter of the Council's
Presidential Statement on Darfur? Does Amb. Sawers mean that the UK feels it has
nothing to say about the propriety of UN procurement and contracting? Having
asked the Mission if it wished to reconsider it defense of the contract in light
of the Jane Holl Lute April memorandum which pressed for sole source contracting
to PAE three months before the Council resolution, the UK Mission said they
stand by their statement. "I think it's a matter for the UN"? Some oversight...
also an incomplete U.S.
General Accounting Office study of
Darfur, which says among other things that the U.S.
"Department of State's Contracting
Officer's Technical Representative in Darfur is the principal U.S. government
official responsible for oversight of PAE's activities in Darfur. State
Department officials told us that it can be difficult to determine whether PAE's
costs are appropriate and reasonable... During our visit to Darfur, the
Technical Representative told us that he reviewed PAE invoices over $15,000 and
had imposed a freeze on increases in employment and vehicle numbers."
So the UN took
over, for the U.S. State Department's convenience, the AMIS arrangements, about
which the U.S. GAO said that it can be "difficult to determine whether PAE's
costs are appropriate and reasonable." How much more difficult now? While the UN
has repeatedly said that only PAE is present in Darfur, the GAO report at
"DynCorp, won bids to provide troop
equipment and strategic transport for U.S. efforts to build AMIS camps.
According to a State official, DynCorp has received approximately $23.5 million
of the total funding that has gone to support AMIS."
degree that the switch of the PAE contract from the U.S. State Department to the
UN is viewed as the UN taking on the State Department's problem, this evasion of
inquiry into irregularities surrounding Lockheed Martin's PAE, there is interest
on Capitol Hill. From which we hope to report on this soon. Watch this site.
* * *
here for a
AlertNet piece by this correspondent about Uganda's Lord's Resistance Army.
for an earlier
piece about the Somali National Reconciliation Congress, and the UN's
$200,000 contribution from an undefined trust fund. Video
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