Kuwait contractor could be banned for security lapses

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A military contractor providing key services for U.S. soldiers in Kuwait should be banned from future contracts because some of its employees worked in sensitive positions without required security clearances or access cards, according to a new watchdog report.

“Contractor employees in sensitive positions without security clearances is not acceptable and poses a security risk for military, civilian, and contractors in Kuwait,” the Pentagon’s inspector general said in a sternly-worded report. Although the contract is scheduled to expire this month, “Corrective actions identified in this report must be established and implemented in follow-on contracts,” the watchdog added.

At issue is a $3.3 billion contract for security guards, system administrators, and other jobs awarded to Combat Support Associates, a company created in 1999 by partners AECOM Technology Corp., Aleut Corp. and Research Analysis and Maintenance Inc.

The contract was overseen by Army officials in Kuwait until late 2007 when the secretary of the Army transferred it to the Rock Island Contracting Center “due to fraud and quality issues,” the report said.

Some 20 Combat Support Associates employees remained in sensitive jobs without required security clearance even after the Defense Contract Management Agency told the company of the breach, the report said. Further, the Army failed to ensure that 36 employees who had no security clearance or security file were issued access cards programmed to prohibit their access to restricted areas on the base.

The Army should consider debarring Combat Support Associates from future contracts for failing to comply with the terms of the billion-dollar deal, the inspector general said.

A Center for Public Integrity story last month detailed the difficulties of ensuring military contractors and subcontractors do the work they are being paid for. The story included allegations that some subcontractors were sneaking prostitutes into Baghdad’s Green Zone by abusing their security access cards.

FAST FACT: A review of 49 Combat Support Associates employee security files showed that only 8 of them had all documents required by the Army, the report said. The company could not find employee files for its chief operating officer, a range safety technician and two guards, all of whom had access to sensitive information.

Other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities:

FINANCE

* Congress needs more information to monitor FHA’s mortgage insurance fund, which fell below its capital reserve requirement to 0.5 percent last year, from 6.8 percent in 2006. If the fund’s reserve is depleted, more taxpayer money will be needed to cover FHA’s credit costs (GAO).

* SEC should expand credit rating agencies’ performance disclosure requirements, add staff needed to examine the biggest raters every two years, and develop a plan to drop credit rater references from its rules (GAO).

* Auditor KPMG says Treasury Dept’s Bureau of Public Debt has effective computer controls to calculate interest payments and process investment redemptions (OIG)

* HUD incurred $1 million in holding costs because Michaelson, Connor and Boul Inc., which managed HUD properties in Michigan, failed to monitor closing agents and report deficiencies with closings (OIG).

HEALTH CARE

* In 2009, nearly 8 percent of Medicare fee-for-service claims or $24.1 billion should not have been paid, and both Medicare and Medicaid pay too much for some services and medical products (OIG)

* CMS failed to report all its actions against health care providers and suppliers to the Healthcare Integrity and Protection Data Bank, which helps prevent fraud and abuse in Medicare program (OIG)

NATIONAL SECURITY

* Homeland Security Dept. must improve how it shares terrorism- and security-related information with subways, buses, and other public transit agencies (GAO).

ENVIRONMENT

* Homeland Security Dept. inspector general now examining if Coast Guard has enough manpower for safety inspections on offshore drilling platforms. Separately, it will soon begin reviewing how effectively the department’s Unified Command handled BP oil spill in the Gulf of Mexico (OIG congressional testimony).

MISC.

* FEMA still lacks a final, comprehensive set of plans for any single emergency scenario (GAO).

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