GSA reviews CACI contract

"We've had an impeccable record of dealing with the U.S. government." ? Jack London of CACI

Olivier Douliery

The General Services Administration is reviewing the CACI International Inc. contract the Army used to hire interrogators working at the Abu Ghraib prison in Iraq. The review will determine whether GSA bars the company from future federal business.

GSA has requested information on contract instruments and the processes for implementing work and issuing delivery orders. CACI is cooperating, said Jack London, chairman and chief executive officer of the Arlington, Va., company.

CACI became embroiled in the Iraqi prisoner abuse scandal after an Army investigation alleged that two company employees were involved.

"We have not knowingly done anything wrong on any of this, and if we have, we're going to do it right and behave in proper, right and correct fashions," London said during a recent conference call with analysts.

While refusing to speculate on the outcome of GSA's investigation, London remained confident that GSA would not debar CACI from future government procurement work. Such debarments are "extremely rare," and occur only when a company has systematically tried to defraud the government, he said.

"We've never had any issue along these lines before, and we've had an impeccable record of dealing with the U.S. government," London said.

CACI president of U.S. operations, L. Kenneth Johnson, and the company's private counsel would discuss the situation with GSA, and the company would respond quickly and appropriately if GSA detected any problems with the contract, London said.

GSA is reviewing delivery orders issued by the Interior Department at Fort Huachuca, Ariz., under a blanket purchase agreement signed under GSA's IT schedule. CACI inherited the contract when it bought some assets of Premier Technology Group Inc. in May 2003, the company said.

Under its contract for interrogation services in Iraq, CACI has 11 task orders worth $66 million, said Stephen Waechter, the company's chief financial officer. CACI has billed the military for $16.3 million in services, and received $7.1 million of the money owed.

London said he did not anticipate that the government would delay its payments for the work in light of GSA's investigation. Remittances for the company's work in Iraq were slow because invoices had to be sent to the contracting officer in Baghdad before payments could be issued, Waechter said.

CACI gets between 30 percent and 35 percent of its revenue from GSA-schedule vehicles, Waechter said. In 2003, the company had total revenue of $843.1 million.

CACI issued a statement May 25 that the Interior Department had informed the company it would honor all delivery orders, but would not issue new ones or amend or extend current ones.

Modifications, extension and additions would be the subject of separate contracts under the Interior Department, the company said.

Other federal agencies also are reviewing CACI's contracts for work in Iraq, London said.

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