GSA reviewing CACI interrogator contract

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.

GSA has requested information about contract instruments and the process for implementing work and issuing delivery orders, said Jack London, chairman and chief executive officer of CACI of Arlington. The company is cooperating with GSA, he said today.

The company became embroiled in the Iraqi prisoner abuse scandal after an Army investigation alleged that two CACI 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 conference call with analysts today.

London declined to speculate on the outcome of GSA's investigation, but expressed confidence that GSA would not debar CACI from future government procurement work. He added that, in general, debarments were "extremely rare" and occurred only when a company has systematically attempted to defraud the government.

"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.

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

GSA is reviewing delivery orders issued by the Interior Department at Fort Huachuca in Arizona under a blanket purchase agreement signed under GSA's IT schedule. CACI inherited the contract when it purchased some of the 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. So far, CACI has billed the military for $16.3 million worth of 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. The 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 30 percent-35 percent of its revenue from GSA-scheduled vehicles, Waechter said. In 2003, the company had total revenue of $843.1 million.

On Tuesday, CACI issued a statement that the Interior Department informed the company it would honor all its existing 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 contract for its work in Iraq, London said.

The allegations of prisoner abuse first surfaced in April. CACI has said that only one of the two employees cited in an Army investigation works for the company. CACI employee Steven Stefanowicz has not been charged with any wrongdoing, and his lawyer has said Stefanowicz is not guilty of any wrongdoing, according to CACI.

The company has refused to state the number of contractors it has in Iraq due to security reasons, but media reports have put the number at 27.

CACI primarily provides IT solutions and technology services to the intelligence community. Its interrogation services constitute a small part of the company's intelligence gathering services. CACI will continue to supply interrogation services to the Army as long as they are needed, London said.



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