Audit

 Report

Compliance with Contract 

No. W911S0-04-C-0003 Awarded to 

Aegis Defence Services Limited 

Report Number 05-005 April 20, 2005 

Office of the Special Inspector General For Iraq Reconstruction 
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

400 Army Navy Drive • Arlington, Virginia 22202 

April 20, 2005 

MEMORANDUM FOR DIRECTOR, PROJECT AND CONTRACTING OFFICE - IRAQ 

SUBJECT: Compliance with Contract No. W911S0-04-C-0003 Awarded to Aegis Defence 

Services Limited (Report No. 05-005) 

We are providing this audit report for your information and use. We performed the audit 

in accordance with our statutory duties contained in Public Law 108-106, as amended, which 

mandates the independent and objective conduct of audits relating to the programs and 

operations funded with amounts appropriated or otherwise made available to the Iraq Relief and 

Reconstruction Fund. Public Law 108-106, as amended, requires that we provide for the 

independent and objective leadership and coordination of and recommendations on policies 

designed to promote economy, efficiency, and effectiveness in the administration of such 

programs and operations and to prevent and detect waste, fraud, and abuse. 

We considered management comments on a draft of this report when preparing the final 

report. Comments on the draft of this report conformed to requirements and left no unresolved 

issues. Therefore, no additional comments are required. 

We appreciate the courtesies extended to the staff. For additional information on this 

report, please contact Mr. James P. Mitchell at jim.mitchell@sigir.mil or at (703) 428-1100. We 

will provide a formal briefing on the results of the audit, if desired. For the report distribution, 

see Appendix D. 

Robert M. Murrell 

Deputy Inspector General 
i 

Office of the Special Inspector General 

For Iraq Reconstruction 

Report No. 05-005 April 20, 2005 

(Project No. D2004-DCPAAC-0036) 

Compliance with Contract 

No. W911S0-04-C-0003 Awarded to 

Aegis Defence Services Limited 

Executive Summary 

Introduction. This audit report discusses compliance with the terms and conditions of 

Contract No.W911S0-04-C-0003 by Aegis Defence Services Limited (Aegis). This audit was 

requested by the Deputy Chief of Mission of the United States Embassy Baghdad. 

Aegis is defense assistance, risk assessment, and security company registered in the United 

Kingdom. The Department of the Army awarded Contract No.W911S0-04-C-0003 (the 

contract) to Aegis on May 25, 2004. The contract calls for Aegis to provide a comprehensive 

security management team that provides anti-terrorism support and analysis, close personal 

protection, movement and escort security, and security program management. 

Objective. The overall audit objective is to determine whether the contractor is complying 

with the terms of the contract. Specifically, we will determine whether the contractor is 

providing adequate services, valid documentation, and proper invoices as required in the 

contract. 

Results. Aegis did not fully comply with all requirements in five areas of the contract. 

Specifically, Aegis did not provide sufficient documentation to show that all of its employees 

that were issued weapons were qualified to use those weapons or that its Iraqi employees 

were properly vetted to ensure they did not pose an internal security threat. Also, Aegis was 

not fully performing several specific responsibilities required by the contract in the areas of 

personal security detail qualifications, regional operations centers, and security escorts and 

movement control. Further, we identified deficiencies in the monitoring of the contract by 

the PCO. 

As a result, there is no assurance that Aegis is providing the best possible safety and security 

for government and reconstruction contractor personnel and facilities. 

Recommendations. We recommend that the Director, Project and Contracting Office - Iraq 

ensure that Aegis is in compliance with the terms and conditions of the contract; ensure that 

all documentation discrepancies are identified and corrected; reevaluate the contract 

requirements for hostage rescue incidents, chemical and biological warfare countermeasures, 

and the establishment of 18 regional operational centers; modify the contract immediately to 

reflect any changes to requirements in the contract terms; modify the contract award amounts 

immediately for any modifications issued that reduce the contract requirements; assess the 

performance of Aegis, review the invoices submitted to date, and ensure that payments were 

not made for contracted services not performed; and establish and maintain an effective 

contract administration program for the contract. 

Management Comments and Audit Response. The Director, Project and Contracting 

Office - Iraq concurred with the findings and recommendations and has taken actions or is in 

the process of taking steps to correct the reported deficiencies. The Director, Project and 

Contracting Office - Iraq comments are fully responsive. We commend the Director, Project 

and Contracting Office - Iraq for the prompt and thorough actions taken to correct the 

deficiencies.
Table of Contents

Executive Summary i 

Introduction 

Background 1 

Objective 2 

Finding 

Compliance with Contract Terms 3 

Appendixes 

A. Scope and Methodology 10 

B. Other Matters of Interest 11 

C. Acronyms 12 

D. Report Distribution 13 

E. Audit Team Members 15 

Management Comments 

 Director, Project and Contracting Office - Iraq 16
1 

Background 

This audit report discusses compliance with the terms and conditions of 

Contract No.W911S0-04-C-0003 by Aegis Defence Services Limited (Aegis). This 

audit was requested by the Deputy Chief of Mission of the United States Embassy 

Baghdad. 

Public Law 108-106, as amended, required the monitoring and review of contracts 

funded by the Iraq Relief and Reconstruction Fund. This report is one in a series to 

determine whether U.S. organizations have established adequate monitoring and 

review of contracts funded by the Iraq Relief and Reconstruction Fund. 

Aegis Defence Services Limited. Aegis is a defense assistance, risk assessment, and 

security company registered in the United Kingdom. Aegis has four divisions that 

focus on defense assistance, maritime security, risk analysis through research and 

intelligence, and risk mitigation through strategic protective security. Aegis was 

awarded a contract by the U.S. Government to provide Iraq reconstruction security 

services. 

Contract No.W911S0-04-C-0003. The Department of the Army awarded 

Contract No.W911S0-04-C-0003 (the contract), “Reconstruction Security Support 

Services (RSSS) for reconstruction activities through four (4) regions of Iraq,” to 

Aegis on May 25, 2004. The contract calls for Aegis to provide a comprehensive 

security management team that provides anti-terrorism support and analysis, close 

personal protection, movement and escort security, and security program 

management. 

The basic contract is cost-reimbursable; valued at approximately $92 million in the 

base year, $97 million in the first option year, and $103 million in the second and final 

option year. At the time of the audit, Aegis was operating in eight locations 

throughout Iraq and its project headquarters was located in Baghdad, Iraq. 

Defense Contract Management Agency. The Army’s Northern Region Contracting 

Center delegated administration of the contract to the Defense Contract Management 

Agency, Northern Europe. The Administrative Contracting Officer was a Defense 

Contract Management Agency employee working in London, England. Because 

Aegis is a British company, financial audit authority for Aegis resides with the United 

Kingdom Ministry of Defence, not with the Defense Contract Audit Agency. 

However, through a Memorandum of Understanding, auditors from the United 

Kingdom Ministry of Defence have agreed to follow requests or instructions from 

either the Defense Contract Management Agency or the Defense Contract Audit 

Agency. 

Project and Contracting Office. The Project and Contracting Office (PCO) 

manages portions of the Iraq Relief and Reconstruction Fund appropriated to support 

the reconstruction of Iraqi infrastructure. That office is responsible for activities 

associated with asset, construction, financial, program, and project management of 

that portion of the relief and reconstruction effort assigned to it by the U.S. 

Government. 
2 

Objective 

The overall audit objective is to determine whether the contractor is complying with 

the terms of the contract. Specifically, we will determine whether the contractor is 

providing adequate services, valid documentation, and proper invoices as required in 

the contract. 

For a discussion of the audit scope, methodology, and a summary of prior audit 

coverage, see Appendix A. For other matters of interest, see Appendix B. For 

definitions of the acronyms used in this report, see Appendix C. For a list of the audit 

team members, see Appendix E. 
3 

Compliance with Contract Terms 

Aegis did not fully comply with all requirements in five areas of the contract. 

Specifically, Aegis did not provide sufficient documentation to show that all of its 

employees that were issued weapons were qualified to use those weapons or that its 

Iraqi employees were properly vetted1

. Also, Aegis was not fully performing several 

specific responsibilities required by the contract in the areas of personal security detail 

qualifications, regional operations centers (ROCs), and security escorts and 

movement control. Further, we identified deficiencies in the monitoring of the 

contract by the PCO. 

This occurred because the PCO did not ensure that Aegis was fully in compliance 

with the terms and conditions of the contract; all documentation discrepancies were 

identified and corrected; and contract requirements were revaluated for hostage rescue 

incidents, chemical and biological warfare countermeasures, and the establishment of 

ROCs. In addition, deficiencies resulted from the appointment of a contracting 

officer’s representative that was inexperienced in security and contracting matters. 

As a result, there is no assurance that Aegis is providing the best possible safety and 

security for government and reconstruction contractor personnel and facilities as 

required by the contract. 

Contract Requirements 

Contractor security services are necessary to help ensure the safety of contractors and 

government personnel in Iraq. However, under this particular contract, Aegis is 

required to provide security services only to PCO personnel, PCO reconstruction 

contractor personnel, and PCO offices where ever those are located within Iraq. 

The contract requires Aegis to continuously gather, interpret, and expeditiously 

disseminate information on the security situation throughout Iraq by working in 

conjunction with military and civilian authorities. The contract further requires Aegis 

to provide guidance and coordination for the security planning and protection of the 

ten major prime reconstruction contractors and their subcontractors as they deploy, 

occupy work sites, and perform reconstruction activities throughout the four PCO 

regions in Iraq (North, Central, South-Central, and South). This includes providing: 

• protection for PCO personnel and clients traveling to reconstruction sites 

through the use of security escort teams 

• close protection to senior PCO management personnel that is fully available 

(24-hours a day, 7-days a week) through the use of personal security details 

• security to PCO facilities through the use of static guards 

• information gathering and liaison capabilities through the use of Iraq security 

liaison teams 

Aegis also provides a daily unclassified threat briefing and report for use by PCO and 

contractor personnel. To meet its contractual requirements, Aegis must have an 

organizational structure that will closely manage this effort and will ensure efficient 

and effective accomplishment of all responsibilities and quality of support. 

 

1

 Vetting is defined as the process for screening personnel to include personal interviews, police 

background checks, security clearances, and proof of investigation of employee and investigative 

records to ensure that the prospective employee does not pose an internal security threat. 
4 

Compliance with the Terms of the Contract 

Aegis did not fully comply with all requirements in five areas of the contract. 

Specifically, Aegis did not provide sufficient documentation to show that all of its 

employees that were issued weapons were qualified to use those weapons or that its 

Iraqi employees were properly vetted. Also, Aegis was not fully performing several 

specific responsibilities required by the contract in the areas of personal security detail 

qualifications, ROCs, and security escorts and movement control. 

Weapons Qualification. Aegis did not provide sufficient documentation to show that 

all of its employees that were issued weapons were qualified to use those weapons. 

The contract requires Aegis to maintain administrative files which shall, at a 

minimum, include investigation records, personnel records, and training records for 

all employees working under the contract. Further, Aegis is required to ensure that all 

personnel are sufficiently capable to perform the requirements of the contract 

statement of work and be qualified on weapons provided for their use. Training 

records for Aegis personnel did not show whether some personnel were qualified to 

use the weapons that they had been issued. 

We randomly sampled weapon allocation inventory records for 20 contractor 

personnel who were issued a total of 30 weapons. The employee training and 

weapons qualification certification records did not include any information to show 

that employees had received weapons qualifications training for 17 of the 30 weapons 

that had been issued. The table shows the weapons qualifications documentation. 

Table - Weapons Qualification Documentation 

Employee Weapon 1 Qualified Weapon 2 Qualified Weapon 3 Qualified

1 AK47 Yes 

2 AK47 No Glock Yes 

3 AK47 No Glock No M4 No 

4 AK47 Yes Glock Yes 

5 AK47* No** 

6 Glock No** 

7 Glock Yes 

8 AK47 No Glock Yes 

9 Glock Yes 

10 AK47* No** 

11 AK47* No** 

12 Glock Yes M4 No 

13 AK47 No** Glock No** 

14 AK47* No** 

15 Glock Yes M4 No 

16 AK47 Yes 

17 Glock Yes 

18 AK47* No** 

19 AK47 No** 

20 AK47 Yes Glock Yes M4 No 

* Weapons allocation inventory records indicated that employee shown was not issued a weapon. 

However, we observed that those Iraqi guards were provided a weapon (an AK47) to perform their job. 

Therefore, their qualifications to use the weapon should have been determined and documented.

** No training record on file. 
5 

Based upon our analysis, there is no assurance that all contractor personnel are 

qualified on the weapons that they had been issued. As a result, the ability of Aegis 

personnel to provide the best possible safety and security for PCO and reconstruction 

contractor personnel may be impaired.

Aegis managers stated that the lack of a weapons qualification training team 

prevented them from establishing an effective program prior to mid-August 2004. In 

addition, according to Aegis managers, training was affected by a lack of range time 

and by weapons that arrived after personnel had been deployed to regional sites. 

Vetting of Local Nationals. Aegis did not provide sufficient documentation to show 

that its Iraqi employees were properly vetted. 

The contract requires that Aegis establish a vetting program for all Iraqi nationals 

identified by the PCO as prospective employees. The purpose of vetting is to ensure 

that prospective Iraqi national employees do not pose an internal security threat. The 

contract further requires that Aegis conduct interviews, request a police check, and 

review employment application information for candidates identified by the PCO. 

The results of the personal interview and information reviews were to be provided to 

the PCO for appropriate action. A background check is also conducted for all Iraqi 

nationals hired by the contractor to perform security management tasks. However, 

Aegis personnel records did not show that all Iraqi national employees were properly 

vetted. 

In a random sample of personnel records for 20 of 125 Iraqi nationals employed by 

Aegis; 6 contained no evidence of an interview, 18 contained no evidence of a police 

check, and 2 had no records at all. 

As a result, there is no assurance that Iraqi national employees do not pose an internal 

security threat. 

According to Aegis managers, police checks are difficult to obtain and largely 

irrelevant to the vetting process because of the current dysfunctional state of the Iraqi 

government. 

Personal Security Detail Qualifications. Aegis personal security detail (PSD) 

personnel did not have all of the qualifications and experience required by the 

contract for hostage rescue and chemical and biological warfare. The contract 

required all PSD personnel to be trained as a team before performing their duties 

under the contract. The contract also required previous operational experience in 

providing close personal protection services in high-threat areas. Team members 

must have a variety of skills to perform in this area.2

The contract also requires that PSD personnel be skilled in hostage rescue and 

chemical and biological warfare. The following deficiencies were noted: 

• PSD team members did not have all of the qualifications and experience 

required by the contract for hostage rescue incidents. Aegis managers stated 

that they have neither the intention nor the ability to perform this task. 

Because hostage rescue requires a highly specialized coordinated force, they 

believe the requirement is beyond the scope of PCO security needs. 

 

2

 Those skills include convoy operations, counter-sniping, evasive driving, hand-to-hand combat, 

mobile vehicle warfare, route reconnaissance, set-up of traffic control points, surveillance detection, 

surveillance techniques, and very-important-person protection. 
6 

• PSD team members did not have all of the qualifications and experience 

required by the contract for chemical and biological warfare. Aegis had no 

current or planned training to teach those skills. 

As result, the PCO and reconstruction contractors cannot rely on Aegis to provide this 

service should the need arise for security in hostage rescue incidents and chemical and 

biological warfare situations. 

We advised the PCO of the Aegis comments on those deficiencies. PCO contract 

managers stated that they need to reevaluate the contract statement of work to validate 

the need for these requirements. 

Regional Operations Centers. Aegis did not meet all of the contract requirements 

for the establishment of ROCs. The contract requires that Aegis work in conjunction 

with the appropriate military and civil authorities to establish a primary threat 

assessment and interpretation cell which is capable of managing and disseminating 

information. This primary cell is required to convey expeditiously all information 

that may affect the security of reconstruction prime and sub-contractors to the Aegisestablished PCO security cells at each of the 18 Iraqi governorates. The PCO security 

cells were then to convey the threat assessment and any warnings that would have 

potentially affected PCO and reconstruction contractor personnel. 

However, Aegis personnel stated that they did not establish PCO security cells at the 

18 Iraqi governorates. Instead, according to Aegis personnel, it established ROCs in 

the six military administrative districts of Iraq to better meet the PCO evolving 

security needs. The PCO administration of the contract lacked the necessary records 

to determine the exact rational that allowed the contractor to change the government 

requirement from 18 regional governorates to 6 military districts. 

Aegis representatives believed that the six ROCs in the military administrative 

districts reflected a better realignment of security resources to address the actual 

security needs of the PCO. Aegis stated that the changes in actual security needs of 

the PCO are a result of PCO political and administrative decisions beyond Aegis’ 

control. 

As a result, it is unclear whether this structure provides adequate threat assessment 

and warning to PCO and reconstruction contractors or adequate safety and security to 

PCO and reconstruction personnel. 

The PCO contract managers stated that Aegis and PCO managers needed to 

reevaluate the contract statement of work to validate the need for those threat 

assessment capabilities. 

Security Escorts and Movement Control. Aegis did not prepare and transmit a 

weekly schedule for all pre-planned escort missions. The contract required Aegis to 

provide transportation and protection to PCO and reconstruction contractor personnel 

from terrorist or criminal attack during travel to and from secure project worksites 

anywhere in Iraq. The contract called for an average of 75 round-trips daily that were 

to transport an average of two PCO travelers. Aegis services include all protective 

and defensive actions required to deter, detect, counter, and respond to threats to 

designated personnel through threat analysis, operations security, responsive 

communications, and integrated team support using armed vehicle escorts3

. 

The contract requires that Aegis prepare and maintain a weekly schedule for preplanned armed vehicle escort missions. A copy of the schedule should have been 

provided to the PCO before the beginning of the week in which the schedule applies. 

 

3

 Armed vehicle escort is Aegis security personnel providing armed security utilizing armored vehicles. 
7 

As a result, the PCO could not fully ensure that Aegis had effectively planned the 

escort missions, prevented unnecessary trips, or accounted for individuals making the 

trips. 

Although Aegis agreed to the contract terms, it believed that the weekly information 

would be of little value because most escort missions were scheduled no more than 

48 hours in advance. Nevertheless, Aegis representatives agreed to comply with 

contract requirements and amended their procedures to provide a weekly escort 

mission schedule to the PCO. As Aegis agreed to corrective actions, we made no 

recommendation for this area. 

Contract Administration 

The PCO did not effectively administer the contract to ensure compliance with the 

contract requirements. 

We identified deficiencies in the monitoring of the contract by the PCO. For 

example, PCO contracting personnel were unaware that the weapons qualifications 

requirements for Aegis personnel were not being met. The PCO did not take effective 

actions to improve delivery delays of required weapons and provide the necessary 

range time to conduct the weapons training. Contract documentation indicated that a 

previous contracting officer and contracting officer’s representative were aware of the 

documentation problems, but they were not effective in correcting the situation. 

The deficiencies in the contract administration occurred because the PCO did not 

ensure that Aegis was fully in compliance with the terms and conditions of the 

contract; all documentation discrepancies were identified and corrected; and contract 

requirements were reevaluated for hostage rescue incidents, chemical and biological 

warfare countermeasures, and the establishment of ROCs. 

PCO officials stated that these deficiencies were a result of inexperience in security 

and contracting matters by the contracting officer’s representative. PCO officials 

disclosed that the contracting officer’s representative at the time of the audit was not 

trained or certified to perform contract monitoring duties, did not have a contract 

administration plan, and was not trained or experienced in the security career field. 

According to PCO officials, personnel rotation, combined with the lack of personnel 

security expertise and training, also contributed to the deficiencies in the contract 

administration. Nevertheless, PCO management needs to ensure that Aegis complies 

with the contract terms. 

Management Actions 

During the audit, the contracting officer appointed a contracting officer’s 

representative from the security career field that was trained and certified to perform 

contract administration duties. We commend PCO management for taking prompt 

corrective action in regard to the appointment of a better qualified contracting 

officer’s representative. 

Conclusion 

Aegis was generally in compliance with the contract requirements, except as 

discussed in this report. We found no evidence that Aegis was not meeting its 

contractual obligations for guarding facilities, providing personal security details, 

providing security escorts in general, or providing security liaison services and 

security consulting. However, based on our audit results, there is no assurance that 

Aegis is providing the best possible safety and security for government and 
8 

reconstruction contractor personnel and facilities as required by the contract. More 

effective management and oversight of contractual performance and documentation 

should ensure that the contractor is performing to the requirements of the contract. 

Recommendations, Management Comments, and Audit 

Response

We recommend that the Director, Project and Contracting Office - Iraq: 

1. Ensure that Aegis Defence Services Limited is in compliance with the terms 

and conditions of Contract No.W911S0-04-C-0003. 

Management Comments. PCO concurred and took corrective actions to ensure that 

Aegis is in full compliance with the contract. Contract administration issues were 

addressed during the audit with the appointment of the PCO Director of Security and 

the PCO Force Protection Officer as contracting officer's representatives to provide 

proper oversight. Aegis implemented processes to ensure there is adequate 

documentation of weapons qualification training and vetting of Iraqi nationals which 

are documented and monitored. Contract requirements for a hostage rescue team, 

chemical and biological warfare countermeasures, and the establishment of ROCs 

were evaluated and the contract was amended under Modification P00017, dated 

April 17, 2005, to eliminate the unnecessary requirements. 

2. Ensure that all documentation discrepancies are identified and corrected and 

specifically require that Aegis Defence Services Limited provide documentation 

showing that all personnel that have been issued weapons are currently qualified 

to use the weapons and that all Iraqi national personnel are properly screened to 

ensure that they pose no internal security threat. 

Management Comments. PCO concurred and took corrective actions to ensure that 

sufficient documentation exists showing that all Aegis employees are qualified in the 

use of issued weapons and Iraqi national employees are properly vetted. Corrective 

actions undertaken include the designation of contracting officer's representatives to 

provide proper contract oversight and periodic reviews of training and vetting 

documentation. 

3. Reevaluate the contract requirements for hostage rescue incidents, chemical 

and biological warfare countermeasures, and the establishment of 18 regional 

operations centers. 

Management Comments. PCO concurred and took corrective actions. Contract 

requirements for a hostage rescue team, chemical and biological warfare 

countermeasures, and the establishment of ROCs were evaluated and the contract was 

amended under Modification P00017, dated April 17, 2005, to eliminate the 

unnecessary requirements. 

4. Modify the contract immediately to reflect any changes to requirements in 

the contract terms. 

Management Comments. PCO concurred and took immediate corrective action. 

The contract was amended under Modification PO0017 dated April 17, 2005, six days 

after the draft report was received, to promptly reflect changes to the requirements in 

the terms of the contract. 
9 

5. Modify the contract award amounts immediately for any modifications 

issued that reduce the contract requirements. 

Management Comments. PCO concurred. PCO personnel reviewed the Aegis 

contract, a cost plus fixed fee contract, and no costs were ever proposed or incurred 

for hostage rescue or chemical and biological warfare countermeasures. In addition, 

no costs were specifically proposed for 18 ROCs. The contract Statement of Work is 

the only document detailing the number of ROCs required. Because no costs were 

ever proposed or incurred for hostage rescue, chemical and biological warfare 

countermeasures, or to staff / support 18 ROCs no adjustment to the contract award 

amount is necessary. 

6. Assess the performance of Aegis Defence Services Limited, review the 

invoices submitted to date, and ensure that payments were not made for 

contracted services not performed. 

Management Comments. PCO concurred with comment. Interim invoices are now 

approved by the contracting officer’s representatives who work closely with Aegis 

and are aware of services provided to ensure that the services billed have been 

performed. The Joint Contracting Command-Iraq will review the interim invoices 

submitted to date to ensure that payments were not made for contracted services not 

performed. 

7. Establish and maintain an effective contract administration program for the 

contract. 

PCO concurred and took corrective actions. The contract administration issues were 

addressed during the audit. Representatives form the Defense Contract Management 

Agency and the PCO contracting officer’s representatives provide contract oversight 

and assess and monitor contract performance. 

Audit Response. The Director, Project and Contracting Office - Iraq comments to all 

recommendations are considered fully responsive. Prompt and thorough corrective 

actions are laudable and reflect quite favorably on the Director, Project and 

Contracting Office – Iraq and his staff. Corrective actions taken should markedly 

improve the safety and security of government and contractor personnel and facilities 

in a dangerous environment.
10 

Appendix A. Scope and Methodology 

The Department of the Army awarded Contract No.W911S0-04-C-0003 to Aegis 

Defence Services Limited (Aegis) on May 25, 2004. The contract calls for Aegis to 

provide a comprehensive security management team that provides anti-terrorism 

support and analysis, close personal protection, movement and escort security, and 

security program management. We reviewed the contract and seven subsequent 

amendments to that contract to ascertain contractual requirements. 

We interviewed Aegis and U.S. Government personnel, obtained and analyzed Aegis 

and U.S. Government supporting documentation, and visually observed elements of 

Aegis’s operations to determine if Aegis was in compliance with contractual 

requirements. 

We selected two samples to perform our audit work. We used the RAND () function 

found in Microsoft Excel 2002 to select those individuals. 

In the first sample, to examine employees’ weapons qualifications, we selected 

20 from a total of 429 employees (all nationalities) shown on the Aegis’ nominal role 

file. The sample included Iraqi security guards hired to provide security for buildings 

and grounds. Next, from Aegis’ armory records, we identified the weapons issued to 

each employee in our sample. We then examined Aegis’ training records to 

determine whether the 20 employees in our sample were qualified on the weapons 

they had been issued. 

In the second sample, to examine vetting,4

 of Iraqi employees, we first 

eliminated all employees from the Aegis’ nominal role file of 429 employees who 

were not shown as being “Iraqi” in the nationality column. We identified 125 

employees that were Iraqi nationals and randomly selected 20 of those 125 Iraqi 

nationals for our sample. We then examined Aegis’s personnel records for evidence 

of the vetting process, to include an interview and local police check, to determine 

whether the 20 Iraqi employees in our sample were properly vetted. 

We conducted this performance audit from September 2004 through March 2005, in 

accordance with generally accepted government auditing standards. 

Use of Computer-Processed Data. We did not rely on or use computer-processed 

data to perform this audit. 

Prior Audit Coverage. We did not identify any prior audit coverage applicable to 

this audit objective. 

Office of the Special Inspector General for Iraq Reconstruction (SIGIR) reports can 

be accessed at the SIGIR website at www.sigir.mil. 

 

4

 Vetting is defined as the process for screening personnel to include personal interviews, police 

background checks, security clearances, and proof of investigation of employee and investigative 

records to ensure that the prospective employee does not pose an internal security threat. 
11

Appendix B. Other Matters of Interest

Other matters of interest identified by our audit are discussed below. 

Contract Life Support. Contract No.W911S0-04-C-0003 requires that the government 

provide full life support; including housing, meals, water, electricity, security shelter, minor 

medical care, as well as vehicle maintenance and fuel to support all government vehicles. 

During the audit, Aegis managers officially told us that the Project and Contracting Office 

(PCO) did not provide adequate life support services to Aegis as required by the contract. 

Aegis staff conveyed their concerns that the PCO had not effectively obtained services from 

the existing life support infrastructure or through other means. Although the PCO had 

requested those services, Aegis told us that the PCO management did not effectively resolve 

issues to provide the life support Aegis required to perform effectively. 

When we advised PCO officials of the Aegis comments, the PCO undertook a survey of the 

current conditions at all Aegis locations. According to PCO officials, once the survey is 

completed, the PCO plans to take action to improve shortfalls. See attached management 

comments for additional information on corrective actions. 

Personnel Management. According to PCO management, the Aegis contract is one of 

approximately 6,500 contracts and task orders administered by the PCO, and PCO staffing is 

not adequate for the considerable workload entailed in the administration of the Aegis 

contract. The PCO is authorized 69 contract specialists (civilian, contractors, and military). 

At the time our audit fieldwork was concluded, the organization was able to only staff 41 of 

these positions. The Aegis contract is one of approximately 50 contracts administered by one 

contracting officer. This situation is further exacerbated by a high PCO staff turnover. At the 

time of the audit, the Aegis contract had 4 contracting officers and 3 contracting officer 

representatives since its inception in June 2004. 

Accordingly, we are planning to commence an audit to determine whether U.S. government 

organization recruitment and deployment processes for qualified personnel supporting Iraq 

reconstruction is effective. We will concentrate our efforts on the effectiveness of legislative 

and regulatory guidance and processes used to identify personnel requirements, the methods 

to recruit and retain the personnel, and the procedures to measure recruitment and retention 

success. 
12

Appendix C. Acronyms

PCO Project and Contracting Office 

PSD Personal Security Details 

ROC Regional Operations Centers 

SIGIR Special Inspector General for Iraq Reconstruction 
13

Appendix D. Report Distribution

Department of State 

Secretary of State 

Senior Advisor/Coordinator for Iraq 

U.S. Ambassador to Iraq 

Director, Iraq Reconstruction Management Office 

Inspector General, Department of State 

Department of Defense 

Deputy Secretary of Defense 

Director, Defense Support Office-Iraq 

Under Secretary of Defense (Comptroller)/Chief Financial Officer 

Deputy Chief Financial Officer 

Deputy Comptroller (Program/Budget) 

Inspector General, Department of Defense 

Department of the Army 

Assistant Secretary of the Army, Acquisition, Logistics and Technology 

Principal Deputy to the Assistant Secretary of the Army, Acquisition, Logistics and 

Technology 

Deputy Assistant Secretary of the Army for Policy and Procurement 

Director, Project and Contracting Office 

Auditor General, Department of the Army 

Other Defense Organizations

Director, Defense Contract Audit Agency 

Other Federal Government Organizations 

Director, Office of Management and Budget 

Comptroller General of the United States 

Inspector General, Department of the Treasury 

Inspector General, Department of Commerce 

Inspector General, Health and Human Services 

Inspector General, U.S. Agency for International Development 
14

Congressional Committees and Subcommittees, Chairman and 

Ranking Minority Member 

U.S. Senate 

Senate Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on Foreign Operations 

Senate Committee on Armed Services 

Senate Committee on Foreign Relations 

Subcommittee on Near Eastern and South Asian Affairs 

Subcommittee on International Operations and Terrorism 

Senate Committee on Homeland Security and Governmental Affairs 

Subcommittee on Government Efficiency and Financial Management 

Subcommittee on Financial Management, the Budget, and International Security 

U.S. House of Representatives 

House Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on Foreign Operations, Export Financing and Related Programs 

House Committee on Armed Services 

House Committee on International Relations 

Subcommittee on Middle East and Central Asia 

House Committee on Government Reform 

Subcommittee on Government Efficiency and Financial Management 

Subcommittee on National Security, Emerging Threats and International Relations 
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Appendix E. Audit Team Members 

The Office of the Assistant Inspector General for Auditing, Office of the Special Inspector 

General for Iraq Reconstruction, prepared this draft report. The staff members who 

contributed to the report include: 

Robert M. Murrell 

Brian M. Flynn 

Gerald P. Montoya 

Stuart Foote 

Thomas J. McKenna 
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Management Comments, Project and Contracting 

Office - Iraq 
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