Millions In Iraq Contracts Earmarked For 'Dummy Vendor'
By Cliff Montgomery
A recent review of Iraq reconstruction efforts determined that 96 contracts totaling $362 million were earmarked for a
mysterious "Dummy Vendor" who did not actually exist.
The Special Inspector General (IG) for Iraq Reconstruction uncovered the contract entries in the Army Corps of
Engineers' accounting records during a review of the Corps' Iraq Relief and Reconstruction Fund 2 (IRRF 2), a three-year
appropriation program that expired Sept. 30.
Officials with the IG office determined that the "Dummy Vendor" contracts were not properly assigned; they therefore were
voided at the end of September. Previous IG reports have found that a slew of Iraq reconstruction projects have gone over
budget and have been delayed, amidst numerous allegations of fraud and abuse.
Investigators learned from talks with Army Corps financial managers that the "Dummy Vendor" name was regularly used in
its contracting system, in cases dealing with a non-existent supplier of goods or services.
In other words, "for accounting purposes" $362 million of U.S. tax-payers' money was actually contracted to an entity which
did not exist.
Officials stress that the contracting system has since been modified so that "Dummy Vendor" is no longer allowed as an
entry. And though the contracts were recorded between November 2004 and August 2006, investigators say it appears that
no "Dummy Vendor" funds were actually disbursed.
"We do not believe...there was any attempt to mislead on the true status of obligations," the investigators wrote in their final
report.
The funds were overseen by the Army Corps' Gulf region division project and contracting office, and dealt in five categories:
contingency, public works center costs, design/build program close out, supervision and administration, and claims and
unknown.
But that's not all: in addition to the voided "Dummy Vendor" contracts, IRRF 2 held an extra $464 million in Army Corps funds
that had not been contracted to anyone, for a total of $826 million not properly allocated, according to the report.
Like many U.S. agency appropriations, the remaining $464 million in IRRF 2 had to be committed before the appropriation
program expired, or it also would be voided and lost to new contracts. Doug Garman, an Army Corps spokesman, told
Government Executive magazine that the Corps had contracted more than half of that sum by September 25th, and was
daily tracking the fund to spend most of it by Sept. 30th.
But was it money well spent? And was it given to an actual contractor this time? Only time will tell.
By Cliff Montgomery
A recent review of Iraq reconstruction efforts determined that 96 contracts totaling $362 million were earmarked for a
mysterious "Dummy Vendor" who did not actually exist.
The Special Inspector General (IG) for Iraq Reconstruction uncovered the contract entries in the Army Corps of
Engineers' accounting records during a review of the Corps' Iraq Relief and Reconstruction Fund 2 (IRRF 2), a three-year
appropriation program that expired Sept. 30.
Officials with the IG office determined that the "Dummy Vendor" contracts were not properly assigned; they therefore were
voided at the end of September. Previous IG reports have found that a slew of Iraq reconstruction projects have gone over
budget and have been delayed, amidst numerous allegations of fraud and abuse.
Investigators learned from talks with Army Corps financial managers that the "Dummy Vendor" name was regularly used in
its contracting system, in cases dealing with a non-existent supplier of goods or services.
In other words, "for accounting purposes" $362 million of U.S. tax-payers' money was actually contracted to an entity which
did not exist.
Officials stress that the contracting system has since been modified so that "Dummy Vendor" is no longer allowed as an
entry. And though the contracts were recorded between November 2004 and August 2006, investigators say it appears that
no "Dummy Vendor" funds were actually disbursed.
"We do not believe...there was any attempt to mislead on the true status of obligations," the investigators wrote in their final
report.
The funds were overseen by the Army Corps' Gulf region division project and contracting office, and dealt in five categories:
contingency, public works center costs, design/build program close out, supervision and administration, and claims and
unknown.
But that's not all: in addition to the voided "Dummy Vendor" contracts, IRRF 2 held an extra $464 million in Army Corps funds
that had not been contracted to anyone, for a total of $826 million not properly allocated, according to the report.
Like many U.S. agency appropriations, the remaining $464 million in IRRF 2 had to be committed before the appropriation
program expired, or it also would be voided and lost to new contracts. Doug Garman, an Army Corps spokesman, told
Government Executive magazine that the Corps had contracted more than half of that sum by September 25th, and was
daily tracking the fund to spend most of it by Sept. 30th.
But was it money well spent? And was it given to an actual contractor this time? Only time will tell.
Today's Article
Are millions in
American taxpayer
dollars at stake?
American taxpayer
dollars at stake?
The American Spark
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