Wednesday, October 17, 2007

mmm . . .THAT smells like PROFIT!

It looks like excessive war profiteering in Iraq extends far beyond
the usual defense contractor suspects:
Investigators from the Justice Department and the Defense Department are looking into deals that Perdue Farms Inc.,
Sara Lee Corp., ConAgra Foods Inc. and other U.S. companies made to supply the military, according to people involved in the inquiry. The companies made the deals with the help of former U.S. military procurement officials
they hired as consultants or executives.
The inquiry is focused on whether the food companies set excessively high prices when they sold their goods to the Army's primary food contractor for the war zone, a Kuwaiti firm called Public Warehousing Co. A related question is whether Public Warehousing improperly pocketed for itself refunds it received from these suppliers. Public Warehousing bought vast amounts of meat, vegetables and bakery items from the food companies,
and delivered them to U.S. troops.
How is contracting supposed to work?
In general, many military contracts pay suppliers the cost of the goods they distribute plus a profit margin. In such cases, it is a challenge to ensure that the supplier seeks the lowest price from the maker of the goods.
Unless adequate safeguards are in place, the supplier and the maker have
an incentive to inflate the cost and share the extra profits among themselves.
Federal law prohibits government contractors from obtaining money
through false or fraudulent pretenses.
Within the U.S., the investigation is focused on an Army agency in Virginia known as Army Center for Excellence, Subsistence. It plays a key role in determining the Army's favored suppliers. Mr. Staples, a senior official at the center, works closely with sales agents for a handful of U.S. firms including Sara Lee, ConAgra and Quantum Foods Inc.,
according to emails and people involved in the investigation.
Since 2003, the Army agency has issued guidelines directing that chicken breast, turkey breast, ham and sausage consumed by U.S. forces in Iraq and Kuwait be supplied by Sara Lee.
Would it further not-surprise you that "friendlies" benefit and "non-friendlies" do not?
In one of the most striking examples of the agency's selectivity,
Tyson Foods Inc., one of the world's largest chicken producers, has been virtually shut out in the competition to supply the troops for the Iraq conflict. Much of the chicken supplies for Iraq and Kuwait are provided by Perdue and a ConAgra unit called Pilgrim's Pride Inc. That is in line with a recommended menu on a spreadsheet issued by Mr. Staples's agency.
The spreadsheet lists foods and recommended suppliers such as
"turkey thigh roast, raw, netted, 8-10 lb avg" next to "Sara Lee."
In an April 3, 2007, letter to the Pentagon, a lawyer for Tyson complained that
"elements within the military" were providing sole-source contracts
"to certain companies employing former military personnel."
There's a whole lot more you're likely to be unsurprised about,
so read the whole thing.
i'm hungry...let's EAT!!

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