The recent photographs and report from the Project on Government Oversight detailing alleged lewd, drunken behavior by guards at the embassy just describe the latest and most egregious violation by ArmorGroup, witnesses told the panel. State Department Undersecretary of Management Patrick Kennedy testified that the contract has required "extensive oversight and management."
Since awarding the contract to ArmorGroup on March 12, 2007, State has issued seven deficiency notices addressing 25 deficiencies, one cure notice and one show-cause notice. Each notice demanded separate correction action plans to resolve contractual issues and several involved serious allegations, including that the contractor had deceived the government in its contract proposal.
Despite these problems, State has not terminated the contract with ArmorGroup and has, in fact, exercised an extension of the contract period. State officials said they are awaiting the results of an ongoing investigation into the contractor's conduct at the embassy.
Commissioner Clark Kent Ervin pressed Kennedy to pledge State would terminate the contract if the probe validates the allegations made against the contract employees. While Kennedy was hesitant to speculate on a hypothetical situation, he said he could imagine an outcome of the investigation that would lead the agency to terminate the contract. "We're seeing a serious case being made for termination," he said.
William Moser, deputy assistant secretary of State for logistics management, told the commission a public hearing was not the proper forum to talk about future contract actions. Regardless, he said the department is discussing potential alternatives and approaching the reevaluation of the contract "with a great deal of seriousness."
Danielle Brian, executive director of POGO, said the organization's investigation shows State officials were notified of serious issues relating to the ArmorGroup contract repeatedly, and took limited action.
"For the two years of this contract, State's response to whistleblowers' sustained complaints and to its own finding of severe noncompliance consisted mainly of written reprimands and the renewal of ArmorGroup's contract," Brian said. "Simply documenting a problem or even levying a fine is not effective oversight when those same problems continue to occur."
Brian said State has been "stubbornly defensive" in not recognizing its own failures, and how those failures have caused misconduct and potential lapses in security. While POGO strongly believes the contract should be canceled and ArmorGroup -- or its parent company, Wackenhut -- should be debarred from doing business with the government, that will not prevent future problems, Brian said.
To ensure proper conduct by contractors overseas, State must shorten the rotations of its regional security officers, perform more frequent audits and independent verification of contractor reports of compliance, and prioritize accountability, she said.
"This cultural shift will be aided by canceling contracts when the contractor consistently underperforms -- which will have the added benefit of acting as a deterrent to future contractors -- and by disciplining the State Department officials who are responsible for the failed oversight of the ArmorGroup contract," Brian said.
Commissioner Linda Gustitus said State already lost authority with industry by not terminating its contract with Blackwater Worldwide in the wake of the Nissor Square shooting incident in Iraq.
"That helped to send a message to other contractors that you can do a lot and not have you contract terminated," Gustitus said.
Several commissioners joined Brian in urging Kennedy to hold accountable the State employees responsible for managing Armor Group by firing them, withholding bonuses or taking some other disciplinary action.