Saturday, May 26, 2012
Seven years after it was hired to provide food to troops in Afghanistan, a Swiss company has been accused of overcharging the Department of Defense about three-quarters of a billion dollars.
Supreme Foodservice AG of Switzerland has been paid $5.5 billion since 2005 to deliver water and food, including fresh fruit and vegetables, to U.S. forces at about 246 sites in Afghanistan.
The Defense Logistics Agency (DLA) has now demanded that Supreme refund the government $756.9 million within 30 days for “unsupported transportation costs.”
The overcharges include $124.3 million for transportation and corrugated packing boxes, according to the Pentagon’s inspector general’s report. Another $455 million may have represented inflated prices for the delivery of the fruits and vegetables, which were flown from the United Arab Emirates to Afghanistan.
Pentagon Inspector General Gordon Heddell said the contract given to Supreme demonstrated “just how bad it can get” when contractors are hired without proper review or oversight.
Before he retired as director of the DLA in November 2008, Army Lieutenant General Robert Dail gave the Supreme Foodservice DLA’s New Contractor of the Year award for 2007, for ensuring the successful delivery of food to troops throughout Afghanistan.
Supreme paid back the compliment four months later by hiring Dail as president of Supreme Group USA, and in January 2011 DLA gave Supreme Foodservice a no-bid $4 billion extension of its contract to supply the troops in Afghanistan.
-Noel Brinkerhoff, David Wallechinsky
To Learn More:
Pentagon Seeks $756.9 Million Overpayment Refund From Supreme Foodservice (by Tony Capaccio, Bloomberg)
Food Fight: Contractor Accused of $750 Million Overcharge for Wartime Grub (by Robert Beckhusen, Wired)
Improvements Needed in Contract Administration of the Subsistence Prime Vendor Contract for Afghanistan (Department of Defense, Inspector General) (pdf)
Food Supply Company, Employing Former Head of Defense Contracting Agency, Wins $4 Billion No-Bid Contract (by Noel Brinkerhoff, AllGov)
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