Whistleblower Exposed $1.34 Million in Army Losses

The Office of Special Counsel said improper contracting practices were a factor.

A whistleblower exposed how the Army lost possession of six government-purchased fuel trucks, mainly due to improper contracting procedures, which cost the service about $1.34 million.

The Office of Special Counsel sent a letter to the White House and Congress on Wednesday, which included a June 2018 Army report and its own findings regarding the revelation, making it public for the first time.

“Whistleblowers play such a critical role in ensuring taxpayers' money is not misused," said Special Counsel Henry Kerner in a press release. “In this case, because a whistleblower spoke up, the Army is now taking steps to recover assets worth more than a million dollars. [Office of Special Counsel] is proud to work with whistleblowers to ensure taxpayer money is not wasted or mismanaged." 

The whistleblower, an anonymous U.S. Army materiel command contracting representative, reported that a former U.S. Mission Installation Command director at Fort Rucker, Alabama, failed to reacquire six fuel trucks though the private company Primus Solutions, a division of Arctic Slope Regional Corporation, a federal holding company. This was despite recommendations from officials to do so, according to the letter. 

However, Kerner said that this former director “did not act unreasonably” because the original contracting officer did not follow the designated contracting procedure or provide sufficient documentation that would justify the purchase. 

The contracting officer “issued a modification to purchase six vehicles” to the firm-fixed-price contract. That action “was not part of the original score of this type of contract, which contributed to the government's inability to quickly uncover the error and correct it,” according to the army.  

To recover the approximately $1.34 million loss, the Army is working to reacquire the fuel trucks, audit the existing contract, and retrain the personnel involved. Additionally, the Army is resolving the “ownership and title” of the trucks with Primus through the Armed Services Board of Contract Appeals, an independent forum that resolves contract disputes between the government and contractors.  

The former director left his position in March 2018 and is no longer with the Army. In closing the matter, Kerner wrote, “the report meets the statutory requirements and the [Army’s] findings appear reasonable.”