Published January 22, 2011
| Associated Press
The U.S. government awarded a no-bid, $266 million contract for a lucrative electricity project in southern Afghanistan despite promising last year to seek competitive bids from other companies, The Associated Press has learned.
The U.S. Agency for International Development quietly made the change despite criticism over how it has managed billions of dollars spent on reconstruction contracts.
In January 2010, USAID said companies would compete for the electricity project, awarded to Black & Veatch Corp. of Overland Park, Kan., a company that the agency earlier had chastised for big cost overruns and busted deadlines on a diesel-fueled power plant in Kabul. But the government let 10 months pass before deciding to award a contract without competitive bids, saying that it couldn't spend more time seeking offers.
A rival company that was interested in bidding, Symbion Power LLC of Washington, D.C., said USAID broke its promise and spent more than it should to expand electricity into war-ravaged Helmand and Kandahar provinces in southern Afghanistan.
"I was stunned because of the cost of it," Symbion chief executive Paul Hinks said.
The no-bid contract comes as the independent Commission on Wartime Contracting is examining how wisely billions of U.S. tax dollars are being spent and how well contractors are being supervised in Afghanistan. USAID and Black & Veatch executives are scheduled to testify Monday at a commission hearing.
USAID opted against seeking competitive proposals "to meet the tight timelines required to have an urgent impact," the agency said in a statement to the AP.
Black & Veatch defended its selection for the work without competition. "The cost of this contract is entirely reasonable" and includes multiple projects in a large area subjected to intense conflict, the company said in a statement.
During the 2008 presidential campaign, Barack Obama criticized the Bush administration for awarding contracts without competition, a practice he said cost U.S. taxpayers billions of dollars each year. But once in office, Obama didn't prohibit sole-source contracts, saying agencies needed the flexibility to tailor contracts to meet their needs.
Hinks, who has previously fought against Black & Veatch over contract issues on the troubled power plant in Kabul, said his company successfully completed more energy projects for less money at the height of fighting in Iraq. Symbion handled about $250 million in Defense Department projects in that country, including building 11 power substations and nearly 300 miles of transmission lines.
Hinks said USAID could have received a better deal. The agency had to discuss the project for months with Black & Veatch to craft a no-bid agreement and should have sought proposals at that time from other companies working in the region, he said.
Agency officials told Hinks in several e-mails last year that Symbion and other companies would have the chance to bid on the work.
"USAID intends to procure services through a full and open competitive procurement process and Symbion is invited to submit a proposal," William Frej, then the agency's Afghanistan director, wrote to Symbion in February 2010. In November, USAID changed course, saying Black & Veatch would receive the no-bid contract because the company already was working on USAID energy projects.
Under the latest contract for work in southern Afghanistan, Black & Veatch will upgrade electrical distribution in Kandahar city, install diesel generators, rebuild power substations and install a third hydro-electric turbine generator to the Kajaki Dam in Helmand province.