Federal officials have known for at least four years of serious fraud allegations involving the engineering and construction firm Louis Berger Group, which has handled important rebuilding projects in Afghanistan. But those accusations didn’t discourage the U.S. Agency for International Development from continuing to award contacts to the company, including a $1.4 billion deal it is sharing with another U.S. company, Black & Veatch.

 

Louis Berger Group stands accused of overbilling the government—possibly as far back as the mid-1990s—and performing shoddy construction.

 

The Obama administration faces a difficult choice over what to do about the Louis Berger Group, writes McClatchy Newspapers. If it cuts ties with the company, the decision could set back rebuilding efforts and affect plans to begin pulling out troops next year. But if it stays the course, the administration leaves itself open to criticism from Republicans and others over wasteful spending of U.S. tax dollars.

 

The Obama team inherited from the Bush administration a contract that does not allow the government to fine Louis Berger or Black & Veatch if they miss deadlines. In addition, the two companies, like Halliburton, received cost-plus contracts that reimburse costs and pay a percentage of those costs as a fee.

-Noel Brinkerhoff, David Wallechinsky

 

U.S. Contractor Accused of Fraud Still Winning Big Afghan Projects (by Marisa Taylor and Warren P. Strobel, McClatchy Newspapers)