What Went Wrong?

Team Infidel

Forum Spin Doctor
NBC
June 24, 2008
NBC Nightly News, 7:00 PM
BRIAN WILLIAMS: Now to a question that still has no clear answer: How did two 20-something young men land a big, important Pentagon contract when their company’s track record showed some very serious problems?
Our senior investigative correspondent Lisa Myers reports tonight on what some are calling a classic case of government contracting gone terribly wrong.
LISA MYERS: It was a $300 million contract to supply ammunition to the Afghan army, the kind of contract that usually goes to big name companies. But this one went to Efraim Diveroli. He was 21 years old and CEO of a company called AEY. Here he is on a MySpace page, a self-described super nice guy. Here’s his vice president. He was a ripe old 25, a massage therapist and musician. He also claims to offer only the finest AK-47s.
Federal agents arrested both men last week, charging them with fraud for selling outdated, defective Chinese ammunition to the Pentagon. Their lawyers have said they will plead not guilty.
Today, incredulous congressmen asked, what happened here?
REP. STEPHEN LYNCH (D-MA): The events here that we’re speaking of today are a disgrace.
MYERS: Anyone who checked could have learned that the company AEY, headquartered in this building in Miami Beach, had lost five Pentagon contracts for poor performance before getting the $300 million arms deal. Investigators say AEY delivered substandard helmets to Iraq and failed to deliver thousands of pistols, using the excuse that Miami had been hit by a hurricane. It had not.
Diveroli also was on the State Department watch list. Today, the Army defended the contracting officer’s decision.
BRIG. GEN. WILLIAM N. PHILLIPS [U.S. Army]: Based upon the information that was available to that contracting officer, she made a reasonable decision based upon the information that she had.
MYERS: What does the Pentagon think now?
JEFFREY PARSONS [Executive Director, U.S. Army Contracting Command]: In retrospect, knowing what we know now, it was not a good decision.
LYNCH: Has anybody been fired for this?
PARSONS: No one has been fired.
MYERS: Today, the State Department launched an investigation into allegation that the U.S. ambassador to Albania went along with an effort to hide the problem, which he vehemently denies.
Lisa Myers, NBC News, Washington.
 
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