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Dyncorp: Letter to Secretary Condoleezza Rice Print
March 27, 2007

The Honorable Condoleezza Rice Secretary of State
2201 C Street NW Washington, DC 20520

Dear Madam Secretary:

DynCorp International LLC recently completed an evaluation of the report prepared jointly by the Office of the Special Inspector General for Iraq Reconstruction (SIGIR) and the Office of the Inspector General for the Department of State titled "Review of DynCorp International, LLC, Contract Number S-LMAQM-04-C-0030, Task Order 0338, for the Iraqi Police Training Program Support," which was released on January 30, 2007.

After carefully reviewing the report, we found that it is filled with inaccuracies, misstatements, and unfounded speculation that mischaracterize the company's operations in Iraq. The report's deficiencies have also created negative misperceptions and cast a shadow over the otherwise mutually beneficial relationship the Department of State and DynCorp International have enjoyed since 1991.

I am writing to you because our company performs important work for the Department of State, and I want to personally assure you of this company's integrity and support. We are committed to being fully accountable to the Department of State for the work we do and for the correctness of our management, accounting, and contracting procedures. We are proud to serve our country as the Department of State's partner in the important work of civilian police training, mine removal, Africa peacekeeping, drug eradication, and security.

We understand that the work DynCorp International performs throughout the world inevitably places us in the public spotlight, and we believe scrutiny of public contracting is healthy and necessary. As policymakers debate the role the private sector plays in supporting the work of government, both domestically and abroad, this scrutiny has become more intense, and we accept that as well. However, I am dismayed at charges of impropriety in the SIGIR's report that are not borne out by the facts.

These accusations-both overt and implicit-are particularly troubling because DynCorp International and its subcontractors mobilized quickly and worked on this task order under a verbal notice to proceed and an abbreviated statement of work for nine weeks, all in response to the Department's urgent need. The verbal notice to proceed received on April 17, 2004, was followed by a signed task order on June 24, 2004 and provided for a 90-day period of performance and liquidated damages of
$10,000 per day.

One very troubling allegation in the report concerns the construction of a swimming pool at the Adnan Palace facility in Iraq. In the SIGIR report, and in subsequent Congressional testimony based on the SIGIR report, questions were raised as to whether construction of a swimming pool was appropriate because there was no express language in the Statement of Work requiring it. The SIGIR report even speculates that the company may have built the pool at the instruction of the Iraqi Ministry of the Interior. These inflammatory assertions are without merit.

The CIVPOL contract under which this task order was issued required our company to establish and administer a morale, welfare, and recreation (MWR) program. The very brief Statement of Work from the State Department did not specify what MWR activities or programs this camp should have; rather, the Contracting Officer gave DynCorp International considerable discretion to determine construction details. We have included MWR facilities such as gyms, television trailers, and shaded picnic and barbecue areas in all camps we have built for the State Department. We therefore reasonably determined that a large swimming pool was an appropriate MWR facility for a camp where over a thousand people would be confined in an environment in which temperatures reach 130 degrees.

Since the construction effort was firm fixed-price, the choice of a swimming pool over other alternatives for an MWR facility did not increase the State Department's costs. Ironically, when the State Department decided to abandon the Adnan Palace project and we halted work, the pool apparently was completed by another company.

Another example of the SIGIR report's inaccurate assertions and consequent creation of misperceptions concerns the construction of so-called "VIP trailers." The SIGIR report claims the assembly of the trailers at Adnan Palace was "unauthorized" and ultimately "unnecessary."

This is again untrue. The task order Statement of Work required our company to construct, deliver, and install trailers, including VIP trailers. Following the issuance of the task order, differences about needs arose between the State Department (our customer) and the Coalition Provisional Authority, which controlled Adnan Palace.

Disagreements also existed within the State Department regarding the level of security protection required for the trailers. Due to the lack of clear guidance caused by these debates within government, DynCorp International halted work without a specific order from the State Department. At the time we interrupted construction, more than half the trailers were completely finished, and the remaining trailers were partially assembled.

After discussions with then-Deputy Assistant Secretary William E. Todd, in which the State Department made clear its intention to eventually use the trailers either at Adnan Palace or elsewhere, we completed assembly and delivered all trailer units to the State Department. Many of the trailers are now scheduled to be used in a residential camp for the CIVPOL program at the Baghdad International Airport.

There are, unfortunately, other serious unfounded charges in the SIGIR report.

For example, the SIGIR report states, "...DoS may have spent another $36.4 million for weapons and equipment, including armored vehicles, body armor, and communications equipment that cannot be accounted for...." This assertion is false. We have verified that the 147 vehicles, weapons, and body armor, and communications equipment are in fact accounted for. All of this equipment was used to enhance the police training program, and much of it is still being used in support of the State Department's mission.

The SIGIR report questions the purpose of an $18.4 million "mobilization fee" and suggests that it was an improper advance payment. In fact, this payment was the first scheduled payment for work already performed under this fixed-price task order. We immediately disbursed most of this payment to our subcontractor, which was responsible for procuring the residential trailers on an expedited basis.

The report also questions a $1.1 million invoice that had not been paid for lack of documentation. In fact, this invoice was paid in December 2006, nearly two months before the SIGIR issued its report. Indeed, the invoice was originally rejected, and the State Department asked DynCorp International to provide additional supporting detail. When we provided the required documentation, the Department approved the invoice.

Without question, the American people should be assured that their government carries out its business properly. And in the urgency and confusion that can exist in time of war in a chaotic country, people make mistakes and work may not be always performed efficiently. Nevertheless, DynCorp International has worked hard not just to carry out the Department's instructions, but to give the Department the most reliable support possible to execute its programs.

To ensure this, we have always maintained open lines of communication with our government customers, particularly the Department of State. The SIGIR report represents a failing in this respect, and I want to bring the truth to your attention.

DynCorp International performed all work on Task Order 0338 in good faith and mindful of the need to provide critical equipment and construction services within the task order's original three-month period of performance.
If we have not delivered on any contractual obligations, we will work conscientiously with the Department to resolve any problems or discrepancies.


Herbert J. Lanese
President and CEO
DynCorp International

cc: Mr. Stuart Bowen, Special Inspector General for Iraq Reconstruction
Hon. Anne Patterson, Assistant Secretary of State for
International Narcotics and Law Enforcement
Hon. Henry A. Waxman, U.S. House of Representatives
Hon. Thomas M. Davis, U.S. House of Representatives
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