Dubai company Overbilled Pentagon 900 dollars by $7, Bowen says

July 31, 2011, 1: 49 AM EDT by David Lerman and Tony Capaccio

(Updates with comment from the company since the sixth paragraph.)

July 30 (Bloomberg) - contractor to United States in Iraq overbilled the Pentagon at least 4.4 million for oil spare parts and equipment, including $900 for a switch of electronic control valued at $7.05, according to a new audit."Based on questionable expenses identified in $ 300 million contract based in Dubai Anham LLC, United States must review all contracts with the company in Iraq and Afghanistan, totaling approximately $ 3.9 million, said the Inspector General for reconstruction Stuart Bowen of Iraq".The audit found weak supervision in multiple areas which left vulnerable to incorrect charges, the Government "Bowen wrote on his 30 quarterly report, issued today." The contract in question was financed by a combination of money earmarked for funds for maintenance and operations of the army and Iraqi security forces.Between the "flagrant examples of overbilling" Anham were $4,500 for a circuit breaker valued at $183.30, $3,000 for a circuit breaker from $94.47 and $80 for a small segment of pipe drainage valued at $1.41 Bowen's Office requested a thorough review of the contract after discovering "significant deficiencies" in the supervision of the Governmentquestionable competition practices and affiliations of possible undisclosed ownership between Anham and some of its subcontractors.StatementAnham of the company said in a statement of email today to the auditor "findings are false, without legal justification in fact or in law". The company said that it worked closely with us officials when he opted to subcontractors and "not a single screw or nail was acquired without prior approval by the Government of United States."Anham said it would closely collaborate with the Auditors "to resolve these inaccurate conclusions".Iraq Bowen's latest count shows that six months earlier of the 46,000 American troops remaining are scheduled to leave Iraq, Pentagon, State Department and U.S. Agency for international development, since that started the war in Iraq, they had executed 34,728 contracting actions or grants for a total of $ 35.9 million expenditure.The special inspector general, created to serve as a watchdog on the help of American reconstruction at Iraq, questioned nearly 39 per cent, or $ 4.4 million, of the $ 11.4 million in costs considered.These costs, he said, "appear to be fair and reasonable or had not been documented properly."Undisclosed TiesIn one cases, Iraqi pioneer Trading Co., a subcontractor Anham, responsible for us $900 for a switch of level control of water that had been offered a competitor for Member 7.05.$ of the family group that has, through a subsidiary, 50 per cent of Anham also holds a stake of 90 per cent in pioneer, although this relationship was never disclosed to the defensaque contract administration agency oversees military contracts, Bowen found Office. "The lack of transparency as regards the relationship between Anham and their subcontractors casts doubt on if you are using Anham due diligence to ensure that the United States Government receives a fair price for goods and services purchased,"report of the inspector general agreed.""In other cases, Anham use subcontractors to purchase items that could have purchased directly from the manufacturer to lower prices, said the report.Speaker ChargesWhen Anham asked him to buy a loudspeaker system to alert employees of any danger, that he decided not to buy the system directly from the manufacturer in the price of sale retail of $44,615, says the report.On the other hand, Anham sought bids from contractors and paid a company called Knowlogy $90,908. That price includes $20,000 for the installation to the configuration of the system means little more than wheeling it in place and connect it.Private Anham LLC is a contracting company for projects in the Middle East, Asia, Europe and North Africa. It provides vehicles, transportation, construction, management of facilities, procurement, food, power generation, management of health, monitoring and training services.Based on all found questionable expenses, the inspector general special "believes that all charges under this contract must be examined carefully, as well as all contracts awarded to Anham," says the report.Cost - Plus ContractThe U.S. military awarded Anham in September 2007, the contract of Iraq, with a price ceiling of $ 300 million to operate and maintain two warehouse and distribution facilities in Abu Ghraib and Umm Qasr, Iraq.The contract at the end, had obligations 119.1 million, of which at least $ 55 million spent by subcontractorssaid the report.The contract was structured in the form of "cost plus", which means that the Government must repay Anham all their costs, rather than accepting a fixed price.Joint theater command contracting support Central command, which was awarded the partially in agreement with the recommendations of Bowen. The defense contract management agency agreed to conduct a new review of the system of acquisition of Anham.

-Editors: Steven Komarow, Robin Meszoly

To contact the reporters on this story: David Lerman at Washington in dlerman1@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva in msilva34@bloomberg.net

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