WASHINGTON — The government watchdog of U.S. contracting in Afghanistan is scrutinizing a sole-source contract that was awarded to a firm even though it was widely criticized for its construction of a power plant project in Kabul.
In November, the U.S. Agency for International Development awarded Black & Veatch the contract, valued at $266 million, despite complaints about its handling of a power plant that were detailed in a series of stories by McClatchy over the last year.
The special inspector general for Afghanistan reconstruction announced that he is now looking into the agreement during Monday's hearing before the Commission on Wartime Contracting in Iraq and Afghanistan.
The new contract includes work on a different power plant and the refurbishing of the Kajaki Dam, major pillars of an effort to revive the economy in southern Afghanistan's Taliban strongholds. The USAID exempted the company from competing for the work, claiming that such a process would "have an adverse effect on programs."
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Wartime contracting commissioners, however, criticized USAID's handling of the award, pointing out that the agency had told a competitor a year ago that it planned to bid the project out.
The commissioners implied that the USAID's handling of the contract and power plant raised questions about the agency's overall ability to oversee projects in Afghanistan.
"Aren't you out of your league?" Commissioner Michael Thibault asked a USAID official who testified during the hearing. "Is it possible that you've been asked to do something that is outside your capacity?"
Alex Thier, the director of the USAID's office of Afghanistan and Pakistan affairs, defended his agency, saying officials had concluded that Black & Veatch had addressed previous concerns about its work. The USAID now is imposing stricter standards for vetting subcontractors and dividing up contracts so the agency doesn't have to regularly rely on one firm, he said.
"We have initiated aggressive reforms in Afghanistan," he said.
However, he acknowledged that dangerous conditions in certain regions of the country and a lack of expertise among subcontractors hampered efforts to improve the situation.
"I cannot overemphasize the challenges," he said.
Black & Veatch has refuted the characterization of the power plant project as troubled and says it can handle another project for the USAID.
"The company is now focused on delivering high-quality project results in an area of substantial hostile threats," Black & Veatch said in a statement.
However, the latest McClatchy story revealed that U.S. officials voiced outrage behind the scenes over the slow pace of the Kabul power plant project and its skyrocketing costs. Despite those problems, those same officials more than doubled the plant's budget from $125 million to $300 million.
McClatchy found that the power plant was just one of at least 15 large-scale programs and projects overseen by USAID that grew from about $1 billion to nearly $3 billion despite the government's questions about their effectiveness or cost.
An inspector general's spokeswoman said her agency's inquiry into the contract is not yet officially an investigation or audit.
But Commmissioner Charles Tiefer, who is a professor of government contracting at the University of Baltimore School of Law, said if the initial examination shows that AID had no real justification for awarding it to Black & Veatch, then the inspector general's office should consider launching a full-fledged investigation or "others will pull the same kind of thing."
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