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$132 Million Overcharge Suspected in Baghdad Embassy Redesign

October 27, 2009

Last week, the United States Department of State and the Broadcasting Board of Governors Office of Inspector General issued a report indicating that some $132 million may have been wrongfully spent on the design and construction of the new U.S. Embassay in Baghdad. The total amount spent on the project (which was awarded to severely-criticized First Kuwaiti General Trading & Contracting) thus far is nearly $600 million. The report attributes the overcharges to:

“construction deficiences; incomplete and undocumented work; additional maintainence charges incurred because of inadequate quality control and commisioning procedures; and contract noncompliance, including liquidated damages and interest for an unauthorized advance.”

The Inspector General also advised the contracting officer to recover the $132 million using “any legal mechanism available.”

To report government contracting fraud and abuse, contact Frohsin & Barger.

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