The State Dept. is reviewing contracts it awarded that involve First Kuwaiti Trading and Contracting, which has a $592-million contract on a new U.S. embassy under way in Baghdad. The company is a subcontractor on three other embassy projects, State Dept. officials say.
“I’ve asked that we review all of our contract possibilities with First Kuwaiti and that review is under way,” Secretary of State Condoleezza Rice told a House Oversight and Government Reform Committee hearing on Oct. 25.
In an Oct. 9 letter to Rice, Committee Chairman Henry Waxman (D-Calif.) said Justice Dept. court filings assert that First Kuwaiti’s managing partner was involved in a 2003 kickback arrangement on U.S. Army contracts. Anthony Martin, a former KBR employee, pleaded guilty in July to violating federal anti-kickback law. Waxman said that was in connection with a subcontract allegedly awarded to First Kuwaiti. In a statement, First Kuwaiti said, “Martin made his allegations to receive a reduced sentence. First Kuwaiti’s work is always subject to the oversight of the U.S. government, and we welcome their review.”
In light of the allegations, Rep. Danny Davis (D-Ill.) asked Rice why First Kuwaiti received work on three other embassy projects. Rice said the company is a subcontractor to Grunley-Walsh LLC, Rockville, Md., which won a contract for an embassy project in Jeddah, Saudi Arabia. The contract, awarded Sept. 28, totaled $122.3 million, according to www.fedbizopps.gov. Rice said the State Dept. was not aware of the allegations concerning Martin, which were in a sealed indictment.
A Website operated by advocacy group OMB Watch (www.FedSpend ing.org) says Grunley-Walsh in 2006 won a $55-million State Dept. contract for a Libreville, Gabon, embassy and a $47.3-million contract for a Surabaya, Indonesia, embassy. A State Dept. official says Grunley-Walsh was awarded those two contracts and has First Kuwaiti as a subcontractor. A Grunley-Walsh official didn’t return a call seeking comment.
Asked about the behind-schedule Baghdad embassy, Rice said First Kuwaiti’s contract is fixed-price and added, “We’re going to continue to make sure that [First Kuwaiti] remediates any problems at its own expense.”