x Abu Dhabi, UAEWednesday 26 July 2017

Food firm in US defence deal denies pay claims

Anham, which won a contract worth as much as $8.1 billion to supply food to US troops in Afghanistan, was last year accused of grossly overcharging the US government in Iraq.

Dubai company that won a contract worth as much as US$8.1 billion (Dh29.75bn) to supply food to American troops in Afghanistan was last year accused of grossly overcharging the US government in Iraq.

Anham, which strenuously denies the Iraq accusations, was involved in a supply deal dispute last year after Stuart Bowen, the special inspector general for Iraq reconstruction (Sigir), accused it of overbilling the Pentagon by at least $4.4 million for spare parts and equipment.

"The audit found weak oversight in multiple areas that left the government vulnerable to improper overcharges," said Mr Bowen's report released last year.

The report cited "egregious examples of overbilling", which included a charge of $4,500 for a circuit-breaker valued at $183.30 and $3,000 for another valued at $94.47.

It recommended the United States review all its contracts with the company in Iraq and Afghanistan.

Anham strenuously refuted the allegations, calling them "false [and] without legal or factual justification".

It said it saved the US government money both through its bid and performance of the contract.

"The company was awarded the contract for its competitive bid of $115m," it said.

"This price was $132m less than the government's independent estimate."

Anham strongly denied the claims that its subcontractors overcharged the US government, saying every purchase was the result of a "competitive bidding process".

"The company takes enormous exception to the Sigir implications. Its suggestions - based on innuendo rather than hard facts - are not the result of a meaningful 'audit'.

"Anham has been a long-time and loyal partner to the US government and remains proud of its strong track record of providing ... high-quality solutions at the lowest possible cost ... in remarkably hostile environments," it said.

In the Afghanistan deal, Anham will replace the Dutch Supreme Foodservice, which has been contracted to supply food to US troops there since 2005.

The Pentagon has spent about $6.8bn over the term of the contract with Supreme but began reducing its payments to the company earlier this year after it claimed to have overpaid by $750m.

That contract comes to an end in December but Supreme has been awarded an interim deal of up to a year to give Anham time to get up to speed before it takes full control of deliveries.

gduncan@thenational.ae

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