The joint venture team of Contrack, AICI, OCI and Archirodon (CAOA JV) would like to correct and clarify the Engineering News-Record magazine article published Dec. 29, 2004, on enr.com entitled "Contracks Design/ Build Contract Terminated for Non-Performance, Government Says," and in the Jan. 3-10 print issue (ENR 1/3-10 p. 19).
The joint ventures transportation contract was not terminated for lack of performance. In a letter sent to the CAOA JV dated Oct. 27, 2004, Charles M. Hess, director of the Project and Contracting Office, provided his reasons for contract termination:
"As we agree, circumstances have changed such that the business model of using large design-build firms to execute some portions of the Iraq reconstruction program is no longer in the best interests of the government, the contractor or the reconstruction mission. It is now appropriate that we change our business model to more direct fixed-priced contracting with local Iraqi firms whenever possible. This change is more appropriate to current circumstances and has significant cost and security benefits. I want it clearly understood that I believe our mutual action in no way reflects unfavorably on CAOA JV or any of the joint venture partners.
As the letter from the PCO clearly states, the joint venture was not terminated for a failure to perform, as stated in ENRs article. Any statements to the contrary are inaccurate. Further, the joint venture partners each have a long track record of successfully completing projects and have never been terminated for nonperformance.
Thank you for permitting Contrack International Inc. and the joint venture members the opportunity to correct the record.
Setting It Straight
January 17, 2005