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UN's Ban Vows Transparency, After Lockheed Gets $250M Sole-Source Darfur Contract

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

UNITED NATIONS, October 16 -- A day after the UN quietly announced a $250 million sole-source contract with American defense contractor Lockheed Martin for infrastructure for its hybrid peacekeeping operation in Sudan's Darfur region, a UN briefing document emerged claiming that the UN "as a result of negotiations" with Lockheed Martin got the "price reduced from $700 to $250 million." Click here for the document, exclusively obtained and put online by Inner City Press in the spirit of transparency.

   In closed door session of the UN's Administrative Committee on Administrative and Budgetary Questions, several members sarcastically marveled at the UN's new-found haggling skills. Others questioned the credibility of a contractor which would inflate its initial bid by nearly 200 percent. Still others pointed out that the UN's October 15 press release mentioned that the $250 million is for six months, with the option to review for two three-month periods, making the contract potentially worth $500 million. This would make the negotiated savings less than presented to ACABQ, in what would in this scenario become a functionally misleading document.

            Inner City Press asked Secretary-General Ban Ki-moon about why the UN dispensed with competitive bidding, and if future Darfur and UN Peacekeeping contracts would also be sole-source. "I assure you full transparency and accountability in carrying out" this Darfur infrastructure contract, Mr. Ban responded. Video available through here. "There is only one company with all the equipment and readily available to construct the camps" for the hybrid peacekeeping force, Ban said, adding that "I am going to make it very accountable and very transparent."

            But at Tuesday's noon press briefing, basic questions such as who signed the contract and whether it allows for subcontracting were asked but not answered. The UN spokesperson spoke in general terms that "there has been a transparent process" about the contract, that a rule (FR 105.16) was "evoked... in this emergency case." Inner City Press asked how it was an emergency, if the Darfur hybrid force had been discussed all the way back when Kofi Annan was Secretary-General, and there have been fifty people working on planning. "There is always a gap," the spokesperson said.

     "Will the contract be made public?" Inner City Press asked.

            "Sure... yes, yes," the spokesperson said. Video here, from Minute 16:40. That statement, combined with Mr. Ban's later vow of transparency, would seem to militate for the contract to be made public forthwith.

            The General Assembly president's spokesman also took questions. Inner City Press asked about the eight-page briefing paper, whether it had been presented to the GA's Fifth Committee as well as to the ACABQ. The spokesman answered that there is a Fifth Committee consultation scheduled for November 8, at which it will be considered. Video here, from Minute 34:05. The Secretariat spokesperson asked that questions about the contract be pursued later, directly with the Department of Peacekeeping Operations. "Did DPKO sign the contract?" Inner City Press asked.

            "DPKO is in charge of the mission" in Darfur, the spokesperson answered.

            Inner City Press has been told that the contact was signed by the Under Secretary General for Management, Alicia Barcena, with the "blessing" of UN Controller Warren Sach, who must approve waivers of bidding and procurement rules. Sources say that Jane Holl Lute, the acting head of the Department of Field Support, spun off this year from DPKO, was most involved in dealings with Lockheed Martin.

African Union peacekeeper in Darfur, Lockheed Martin not shown

  The eight-page UN memo rationalizing the sole-source contract states that Lockheed Martin's Pacific Architect Engineers, Inc. unit "as a contractor to the US Government, has been performing in Darfur since 2004, constructed and is maintaining all logistical services to the existing 34 AU camps, and already has personnel and assets on the ground." The timing of Lockheed's selection followed a July 16 "sole source request for proposals," which was submitted on August 15.

 "Extensive negotiations [were] conducted from 20 August through 9 September 2007. Negotiations centered around price, terms and conditions, performance bond and insurance. The UN used commercial information available from the US Government sources for benchmarking purposes. OIOS, in its capacity as observer, had been briefed on several occasions during the process of the sole source contracting.

"As a result of negotiations prices reduced from ~$700 million to ~250 million. All other issues [were] resolved to the satisfaction of Procurement Division, Department Field Support [sic], Office of Legal Affairs and Insurance Services... The UN has ensured that PAE maximize local sourcing i.e. cement, gravel, labor, etc.... The suggested approach is... consistent with the principles contained in the Secretary-General's letter to the President of the General Assembly dated 2 October 2007."

   This S-G letter, on which Inner City Press reported yesterday, announced as Ban Ki-moon power "the immediate reassignment of civilian personnel for key administrative positions without advertisement of the posts... [and] entering into non-competitive, single-source contracts for the provision of medical, real estate and security-related equipment and services, as well as prefabricated buildings and water supply equipment, should insufficient time be available to follow normal procurement procedures." Less than two weeks later, the $250 million sole-source contract to Lockheed Martin was quietly announced. What's next?

News analysis: UN insiders requesting anonymity due to fear of retaliation had predicted that one purpose or effect of splitting off the Department of Field Support, and of having an American run it, at least on an ongoing "interim" basis, would be to award more of UN peacekeeping's logistics funds to U.S.-based contractors. Whether true or not, this view is not uncommon along the Group of 77 and China, and has been heard at the margins of the ACABQ's now-moot consultations.

    The insiders pass along the tale that ultimately the U.S. cannot control both the Department of Political Affairs and the Department of Field Support, and that DFS may be being prepared for Pakistan, a major troop contributor, possibly in the form of its Ambassador Munir Akram, currently the chairman of the Group of 77. This elicited a scoff from a denizen of the UN's 38th floor, who also said it is his understanding that the drop from $700 million to $250 million is explained by the UN having removed from the scope of the contract certain heavy American equipment. But how then is Lockheed Martin the only company with the necessary equipment? And how is such a designation not self-reinforcing for the future? Perhaps the transparency and contract-disclosure promised on Tuesday will make all of this clear. 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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