Monitoring Board for Iraq finds transportation costs by contractor ‘very high’

A monitoring board overseeing Iraq’s past oil revenues has concluded that settlements between Kellogg Brown and Root (KBR) and the United States Government over non-competitive contracting were “reasonable,” but the company’s transportation costs when providing humanitarian fuel supplies were “very high,” a United Nations spokesman has reported.

Stephane Dujarric told the press on Tuesday that the International Advisory and Monitoring Board (IAMB) that oversees the Development Fund for Iraq (DFI) last week received follow-up special audits looking into single-sourced contracts in Iraq.

“One of the auditing firms, Crowe Chizek, reported that in their opinion the settlements between the company KBR and the U.S. Army Corps of Engineers were reasonable,” he said.

The findings also provide additional information about the transportation costs incurred by KBR in providing humanitarian fuel supplies to Iraq from May 2003 to March 2004. “These costs were very high, in some cases as much as 86 per cent of the total contract costs,” Mr. Dujarric said, citing an IAMB press release and noting that the Board “continues to question the reasonableness of these costs and the adequacy of the administration of contracts.”

The IAMB, whose mandate expires at the end of this year, plans to hold its final meeting in mid-December.

The Board, which operates under a Security Council resolution, is made up of representatives of the UN, the International Monetary Fund (IMF), the World Bank and the Arab Fund for Social and Economic Development.

The purpose of the Board is to promote the objectives laid out in Security Council resolution 1483 adopted in May 2003. That resolution, in part, underlined that the DFI “shall be used in a transparent manner to meet the humanitarian needs of the Iraqi people, for the economic reconstruction and repair of Iraq's infrastructure, for the continued disarmament of Iraq, and for the costs of Iraqi civilian administration,” as well as for other purposes benefiting the Iraqi people.