CACI Won't Be Penalized for Contract Misuse

By Leon Worden
Signal City Editor

Saturday, July 10, 2004

*MEDIA—MANDATORY CREDIT: The Signal newspaper of Santa Clarita, Calif.

hen the Army needed civilian interrogators to question Iraqi detainees last fall, it hired them under a standing, multi-year contract for information technology services — i.e., for computer systems and high-tech engineers.
    Was the scope of the contract exceeded?
    "It appears" so, a U.S. General Services Administration official determined.
    Was the contracting company to blame?
    As much as anybody else, the GSA's Joseph A. Neurauter said in a letter Wednesday to CACI International Inc., an Arlington, Va.-based information technology provider.
    After Maj. Gen. Antonio Taguba's report on Iraqi prisoner abuse was leaked to the public in late April, the GSA decided to investigate the way CACI's contract was used.
    In his report, Taguba identified two CACI employees as "responsible" parties in the scandal.
    Taguba was only half right about the men's employer. Steve Stephanowicz, 34, of Philadelphia, is indeed a CACI contract interrogator.
    But John B. Israel, 48, of Canyon Country, actually works for a subcontractor to Titan Corp., an unaffiliated firm that provided Arabic-speaking translators to the prison. GSA spokeswoman Mary Alice Johnson wouldn't say Friday whether her agency is reviewing Titan's Army contract.
    Since Sept. 1, 1998, the Army has turned to Premier Technology Group and its successor, CACI, when it wanted new software, technical support, or classroom training for soldiers who would be using specialized computer systems in places such as Bosnia or Kosovo. Using one blanket contract, the Army would place individual "task orders" whenever a new need fell within the scope of the contract.
    But in Iraq, the Army placed six orders under that information technology contract "to perform interrogation of detainees," the GAO's Neurauter found.
    On May 26, Neurauter gave CACI 10 days to say why he shouldn't put the company on the "suspension and debarment" list, which would have precluded CACI from receiving any more contracts from any federal agency. His rationale was that CACI's contract was "misused ... with the knowledge and consent of CACI."
    CACI is a $1 billion, publicly traded corporation with more than 9,400 employees. Interrogation work "is a very small fraction, less than 1 percent, of the company's total worldwide business," CACI said recently.
    Neurauter's review was strictly limited to determining whether CACI acted improperly — not the Army or any other government agency.
    Neurauter extended CACI's answer period and met in mid-June with company officials. In the meeting, Neurauter said, CACI President J.P. "Jack" London chided the process, thinking it "unseemly for the government to shift blame to contractors."
    Neurauter made his ruling Wednesday. He had some lingering questions but decided not to suspend or debar the company.
    "I still have concerns about whether you understand that all parties to a transaction are responsible for ensuring that the rules are followed and the integrity of the system is maintained," Neurauter wrote to CACI. "Nonetheless, I do not feel that, at this time, it is necessary for me to take any formal action to protect the interests of the federal government."
    CACI responded with a press statement titled, "GSA determines that no suspension or debarment of CACI is necessary."
    "CACI welcomes the opportunity to provide the additional information requested by GSA in order to eliminate any misunderstandings and clearly convey its commitment to complying with all of the rules governing purchases by the U.S. government," the company said.
    Neurauter still wants to know, among other things, whether there's reason to believe allegations that some CACI workers in Iraq were crafting their own job descriptions.
    But Neurauter's "no formal action" letter doesn't mean the Army will get any more CACI interrogators under the blanket contract.
    As if to complicate matters, the Interior Department, not the Army, administers CACI's contract. It has done so since January 2001, when the contract was extended for five years without going to a competitive bid.
    As it stands, when the Army wants new CACI interrogators, it tells the Interior Department, which orders them from CACI.
    No more, said Interior Department spokesman Frank Quimby.
    The Interior Department's inspector general is conducting a separate review of the way CACI's contract was used, and the Interior Department won't approve any more orders for interrogators until that review is completed. And probably not afterward, either.
    "It's likely that any requests for interrogators would have to be newly contracted" if the Interior Department is going to be involved, Quimby said Friday.
    In the meantime, the Army could go to CACI directly if it wants more interrogators, Quimby said.
    CACI shares closed at $41.40 Friday, up 1 percent on the day.