July 1, 2003: CPA Awards No-Bid Contract to Custer Battles for Airport Security

CPA Officials Posing with $2 Million in Cash [Source: US Congress. House Committee on Government Reform] (click image to enlarge)The Coalition Provisional Authority (CPA) awards a $16.84 million sole-source contract to a small McLean, VA -based firm called Custer Battles to provide security at Baghdad International Airport (BIAP). It will later be alleged by former employees of the firm that Custer Battles bilked the CPA by diverting airport personnel to other jobs. An investigation by the Washington Monthly will later discover that the company had very few qualifications for the job and managed the contract in an extremely disorganized manner. One witness describes how the CPA paid the company with a wheelbarrow filled with $2 million in cash. Colonel Richard Ballard, an inspector general for the coalition forces, becomes extremely dismayed with the company’s conduct after examining its performance. His investigation is continuously obstructed by the company which argues that it has no legal obligation to cooperate because it is being paid with Iraqi assets and not money from the Pentagon. He discovers that employees often possess inadequate equipment and training. He is especially appalled by the employees’ “refusal to open the cargo doors of lorries to inspect.” Ballard makes known his concern that the CPA has exercised inadequate oversight of the contract and writes that a “formal audit would likely conclude fraud and potentially gross negligence in the area of contract oversight.” [Special Inspector General for Iraq Reconstruction, 7/30/2004, pp. 50 ; Washington Monthly, 7/2006]