OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

400 Army Navy Drive • Arlington, Virginia 22202

October 21, 2005 

MEMORANDUM FOR COMMANDING GENERAL, MULTI-NATIONAL SECURITY 

TRANSITION COMMAND- IRAQ 

COMMANDING GENERAL, JOINT CONTRACTING 

COMMAND – IRAQ/AFGHANISTAN 

SUBJECT: Acquisition of Armored Vehicles Purchased Through Contract 

 W914NS-05-M-1189 (Report No. SIGIR-05-018) 

We are providing this 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 comments from the Multi-National Security Transition Command – Iraq, and 

the Joint Contracting Command – Iraq/Afghanistan, on a draft of this report when preparing 

the final report. Comments on the draft of this report by those organizations 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. Joseph T. McDermott at (703) 428-1100 or at 

joseph.mcdermott@sigir.mil or Mr. Clifton Spruill at (703) 343-8817, or at 

clifton.spruill@iraq.centcom.com. For the report distribution, see Appendix C. 

Stuart W. Bowen, Jr. 

Inspector General 
Special Inspector General for Iraq Reconstruction 

Report No. SIGIR-05-018 October 21, 2005 

(Project No. SIGIR-2005-14) 

Acquisition of Armored Vehicles Purchased Through 

Contract W914NS-05-M-1189 

Executive Summary 

Introduction. We performed this audit as a result of a complaint made to the Special 

Inspector General for Iraq Reconstruction Hotline. The Special Inspector General for 

Iraq Reconstruction Hotline was established so that individuals may report significant 

instances of fraud, waste, abuse of authority, and gross mismanagement. 

The hotline caller expressed concern about the cost of purchased armored vehicles, the 

poor quality of the armor on the vehicles, the overall condition of the relatively old 

vehicles, and the fact that a sole-source contracting process had been used to award the 

contract for the purchase of the vehicles. 

Objective. The objectives of this audit were to determine whether adequate procurement 

practices were used to acquire the vehicles and whether the government received 

appropriate value for the money spent on the vehicles. 

Results. The Multi-National Security Transition Command – Iraq (MNSTC-I) purchased 

seven armored Mercedes-Benz vehicles that did not have the level of armored protection 

it required. In addition, MNSTC-I could not locate one of the vehicles after delivery was 

made. As a result, MNSTC-I may have needlessly paid $945,000 for armored vehicles 

that may not meet the purpose intended or may not be available for use. 

Recommendations. We recommend that the Commanding General, Multi-National 

Security Transition Command – Iraq: 

• Ensure that requirements are appropriately and accurately defined to procurement 

officers, including the technical specifications, during the acquisition process. 

• Obtain an independent inspection of the condition of the vehicles to determine 

whether those vehicles are non-conforming to the contract’s terms and 

specifications. 

• Obtain legal advice to determine what actions are available should the vehicles be 

found to be non-conforming to the contract’s terms and specifications. 

• Locate the missing vehicle and have it inspected for conformance to the contract’s 

terms and specifications. 

We also recommend that the Commanding General, Joint Contracting Command – 

Iraq/Afghanistan purchase armored vehicles by using standard supply contracts rather 

than commercial items contracts. 

Management Comments and Audit Response. The Commanding General, MultiNational Security Transition Command – Iraq; and the Commanding General, Joint 

Contracting Command – Iraq/Afghanistan concurred with the finding and 

recommendations, and the comments to all recommendations are fully responsive. 
Table of Contents 

Executive Summary 

Introduction 

Background 1 

Objectives 1 

Finding 

 Acquisition of Armored Vehicles 3 

Appendixes 

A. Scope and Methodology 6 

B. Acronyms 7 

C. Report Distribution 8 

D. Audit Team Members 10 

Management Comments

Commanding General, Multi-National Security Transition Command – Iraq 11 

Commanding General, Joint Contracting Command – Iraq/Afghanistan 13 
1 

Introduction 

Background 

We performed this audit as a result of a complaint made to the Special Inspector General 

for Iraq Reconstruction Hotline. The Special Inspector General for Iraq Reconstruction 

Hotline was established so that individuals may report significant instances of fraud, 

waste, abuse of authority, and gross mismanagement. 

Hotline Complaint. The hotline caller expressed concern about the cost of purchased 

armored vehicles, the poor quality of the armor on the vehicles, the overall condition of 

the relatively old vehicles, and the fact that a sole-source contracting process had been 

used to award the contract for the purchase of the vehicles. 

Contract W914NS-05-M-1189. We reviewed Contract W914NS-05-M-1189 as a result 

of the hotline complaint. The contract was awarded by the Joint Contracting Command - 

Iraq/Afghanistan (JCC-I/A) on May 5, 2005, to a local Iraqi contractor to provide seven 

armored Mercedes-Benz vehicles. The vehicles were to be used by the Multi-National 

Security Transition Command (MNSTC-I) to protect senior officials in the Iraqi Police 

Service. 

The contract was a sole-source procurement contract and was based on the contractor’s 

ability to provide the vehicles immediately. The contract called for the delivery of seven 

Mercedes-Benz sedans at a price of $135,000 per vehicle that ranged from model years 

1994 to 1996. The contract value totaled $945,000. The contractor stated that armament 

certifications and other special documents that pertained to the quotation would be 

provided. 

B-6 Armor Standard. The contractor’s quote described the vehicles as “armored to 

high-level protection B-6.” The B-6 standard is a material specification of the glass and 

steel contained in a vehicle that measures the material’s capacity to stop specific types of 

bullets. The B-6 standard indicates that the vehicle’s armor can stop high-velocity rifle 

bullets. There are 5 or 6 internationally accepted armor standards that define levels of 

protection and the B-6 standard is one of the highest levels. However, the B-6 standard 

does not appear to be a vehicle construction standard, and our research did not find any 

U.S. government construction regulations for armored vehicles. 

According to one manufacturer, “there is no country in the world that has standards 

regulating the installation method in armored vehicle construction.” Consequently, there 

are quality variances among vehicles, such as the percent of the total vehicle protected by 

armor. For example, some vehicles have “zone armoring” which keeps the vehicle from 

being too heavy. Other forms of armoring provide an entire protective box for the 

vehicle’s passengers. 

Objectives 

The objectives of this audit were to determine whether adequate procurement practices 

were used to acquire the vehicles and whether the government received appropriate value 

for the money spent on the vehicles. 
2 

For a discussion of the audit scope and methodology see Appendix A. For definitions of 

the acronyms used in this report, see Appendix B. For a list of the audit team members, 

see Appendix D. 
3 

Acquisition of Armored Vehicles 

MNSTC-I purchased seven armored Mercedes-Benz vehicles that did not have the level 

of armored protection required. In addition, MNSTC-I could not locate one of the 

vehicles after delivery was made. This occurred because MNSTC-I did not adequately 

identify the specifications for the vehicles but rather identified the specific vehicles it 

wanted because of their availability. Further, the contract type that was used by JCC-I/A 

for this acquisition was not proper. Finally, MNSTC-I did not account for all the 

vehicles. As a result, MNSTC-I may have needlessly paid $945,000 for armored vehicles 

that may not meet the purpose intended or may not be available for use. 

Armored Vehicle Requirements 

In May 2005, MNSTC-I identified a requirement for armored vehicles to protect senior 

members of the Iraqi Police Service. Senior members of the Iraqi Police Service were 

vulnerable targets for terrorists and their protection is critical to the accomplishment of 

MNSTC-I mission. 

Acquisition Process 

MNSTC-I identified seven armored Mercedes-Benz vehicles that were available from a 

local vendor. 

Sole-Source Justification. MNSTC-I sought to expedite the purchase of those vehicles 

by writing and approving a justification1 which permitted JCC-I/A to negotiate and award 

a contract for those vehicles through other than full and open competition.2 As part of 

this justification, MNSTC-I researched the price of the vehicles and found that the quoted 

price was at or below previously negotiated prices for similar vehicles. 

However, it is important for a customer to identify the specifications and quality it wants 

in an armored vehicle prior to purchase because there are no U.S. government standards 

regulating the construction of armored vehicles. MNSTC-I did not identify the 

specifications it needed; rather, it merely identified the specific vehicles it wanted 

because of their availability. 

JCC-I/A accepted the vendor source specified by MNSTC-I because MNSTC-I did not 

notify JCC-I/A of the specifications and features it needed in the vehicles. Because 

MNSTC-I had already identified the vehicles it wanted and approved the purchase of the 

vehicles without full and open competition, JCC-I/A immediately executed a contract for 

the vehicles using a commercial items contract. 

Commercial Items Contract. A commercial items contract requires the vendor to 

tender for acceptance those items conforming to the requirements of the contract, gives 

the government the right to test or inspect those items, and permits the government to 

require the vendor to repair or replace any nonconforming item at no increase in contract 

price. 

 

1

 A “Justification and Approval for Other Than Full and Open Competition.” 

2

 A sole-source procurement. 
4 

According to a JCC-I/A contracting officer, a commercial items contract was used in this 

case because it was assumed by JCC-I/A that armored vehicles were a commercial item. 

Consequently, JCC-I/A did not research whether more specific specifications were 

needed for the armored vehicles and relied on the descriptions and source of the vehicles 

provided by MNSTC-I. 

The use of a commercial items contract to purchase a non-commercial item significantly 

weakened the ability of MNSTC-I to ensure it received what it wanted. Commercial 

items are defined as items that are customarily used by the general public and, according 

to a JCC-I/A official, the fact of wide public use of an item provides some assurance that 

a submitted item conforms to its public use. However, when there are no industry 

standards and the item is not widely available to the public, the assurance of conformity 

is reduced. For example, MNSTC-I described the vehicles it wanted as “Mercedes Benz 

Sedan (model) armored to high level protection B-6.” Vendors, though, have some 

latitude in what they can submit because there is no industry standard for armoring and 

no wide-public availability for these items. 

According to a JCC-I/A official, the proper type of contract that should have been used 

for this type of purchase is called a standard supply contract. In a standard supply 

contract, the customer defines its requirements, and those requirements are incorporated 

into the contract. Vendors then offer items based on their conformity with the 

requirements. This type of contract ensures the customer will receive only items that will 

meet its needs. 

Inspection of the Vehicles. Six of the seven vehicles were inspected, after receipt, by a 

contractor who maintained armored vehicles for MNSTC-I. The inspection contractor 

thoroughly assessed the mechanical condition of each vehicle including the quality its 

engine, gearbox, suspension, tires, brakes, and electrical system. The inspection 

contractor also assessed the condition of the armor. A report was prepared for each of the 

six vehicles. According to the reports, “the armoring of the vehicles appears to be of low 

standard and provides only limited safety to the occupants of the vehicle.” Additionally, 

the inspection contractor reported several other shortcomings, such as inadequate 

suspensions, low-quality tires, low quality brakes, and unarmored electrical systems. 

According to the inspection contractor, the vehicles were not worth the money paid and 

to bring them up to required standards would have required an investment that exceeded 

the value of the vehicles. 

The vendor that supplied the vehicles strongly disagreed with the assessment by 

MNSTC-I inspection contractor. According to the vendor, the vehicles met the contract 

specifications. The vendor insisted that MNSTC-I should have been more specific about 

requirements in the contract if MNSTC-I expected higher standards. The vendor also 

questioned the neutrality of MNSTC-I inspection contractor. 

Given this disagreement and the potential conflict of interest issue, determining an 

independent value for the vehicles will likely require an independent inspector. 

However, before MNSTC-I initiates this process, it should obtain legal advice on other 

recourses. 

Accounting for the Vehicles. The seven vehicles were delivered and received by the 

government at the Abu Ghraib warehouse on June 5, 2005. The U.S. government 

Material Inspection and Receiving Report (DD-250) was signed by the government 

quality assurance representative and noted no exceptions. However, MNSTC-I has 

possession of only six of the seven vehicles and does not know the whereabouts of the 
5 

seventh vehicle. MNSTC-I should take immediate action to locate the missing vehicle. 

This missing vehicle must be accounted for. 

Conclusion 

MNSTC-I did not adequately identify the specifications for the seven armored vehicles 

before initiating the acquisition process. The vehicles may not serve the purpose 

intended by MNSTC-I because, although the vehicles appear to conform to the 

specifications in the contract, those specifications were ill-defined. Further, after the 

purchase, MNSTC-I discovered the vehicles were not of the quality it expected but more 

analysis is needed to determine whether MNSTC-I received appropriate value for the 

vehicles. In addition, MNSTC-I may not be able to require the contractor to repair or 

replace the vehicles because the procurement process was flawed. Finally, MNSTC-I 

was unable to locate one of the seven vehicles and can not account for its whereabouts. 

Recommendations, Management Comments, and Audit 

Response

We recommend that the Commanding General, Multi-National Security Transition 

Command – Iraq: 

1. Ensure that requirements are appropriately and accurately defined to 

procurement officers, including the technical specifications, during the 

acquisition process. 

2. Obtain an independent inspection of the condition of the vehicles to 

determine whether those vehicles are non-conforming to the contract’s 

terms and specifications. 

3. Obtain legal advice to determine what actions are available should the 

vehicles be found to be non-conforming to the contract’s terms and 

specifications. 

4. Locate the missing vehicle and have it inspected for conformance to the 

contract’s terms and specifications. 

Management Comments. The Commanding General, Multi-National Security 

Transition Command concurred with the finding and recommendations. 

We recommend that the Commanding General, Joint Contracting Command – 

Iraq/Afghanistan purchase armored vehicles by using standard supply contracts 

rather than commercial items contracts. 

Management Comments. The Commanding General, Joint Contracting Command – 

Iraq/Afghanistan concurred with the finding and recommendation. 

Audit Response. The management comments to all recommendations are fully 

responsive. 
6 

Appendix A. Scope and Methodology 

We met with Multi-National Security Transition Command – Iraq and Joint Contracting 

Command – Iraq/Afghanistan representatives to discuss and determine whether adequate 

procurement practices were used to acquire seven armored Mercedes-Benz vehicles. We 

reviewed pertinent documentation that included the sole-source justification, armor 

standards, contract, receiving reports, and the inspection reports prepared by the 

contractor that maintained armored vehicles for the Multi-National Security Transition 

Command – Iraq. We also corresponded with the Director of Finance for the Project and 

Contracting Office to validate that payment was made for the vehicles. 

We physically observed six of the seven vehicles at the garage of the maintenance 

contractor for the Multi-National Security Transition Command – Iraq and discussed the 

quality of the vehicles as measured against the B-6 standard. The B-6 standard is a 

material specification of the glass and steel contained in a vehicle that measures the 

material’s capacity to stop specific types of bullets. 

We conducted this performance this audit from July 2005 through September 2005, in 

accordance with generally accepted government auditing standards. 

Use of Computer-Processed Data. We did not use computer-processed data to 

perform this audit. 

Prior Coverage. There have been no audits performed concerning the Iraq Relief and 

Reconstruction Fund with the same or similar objectives as this audit. 
7 

Appendix B. Acronyms 

JCC-I/A Joint Contracting Command – Iraq/Afghanistan 

MNSTC-I Multi-National Security Transition Command – Iraq 
8 

Appendix C. Report Distribution 

Department of State 

Secretary of State 

Senior Advisor to the Secretary and Coordinator for Iraq 

U.S. Ambassador to Iraq 

Director, Iraq Reconstruction Management Office 

Inspector General, Department of State 

Department of Defense 

Secretary of Defense 

Deputy Secretary of Defense 

Director, Defense Reconstruction Support Office 

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 for Acquisition, Logistics, and Technology 

Principal Deputy to the Assistant Secretary of the Army for Acquisition, 

Logistics, and Technology 

Deputy Assistant Secretary of the Army (Policy and Procurement) 

Director, Project and Contracting Office 

Commanding General, Joint Contracting Command – Iraq/Afghanistan 

Assistant Secretary of the Army for Financial Management and Comptroller 

Chief of Engineers and Commander, U.S. Army Corps of Engineers 

 Commander, Gulf Region Division 

Auditor General of the Army 

U.S. Central Command

Commanding General, Multi-National Force – Iraq 

 Commanding General, Multi-National Security Transition Command – Iraq 

 Commander, Joint Area Support Group – Central 

Other Defense Organizations

Director, Defense Contract Audit Agency 
9 

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, Department of Health and Human Services 

Inspector General, U.S. Agency for International Development 

Mission Director – Iraq, U.S. Agency for International Development 

Congressional Committees and Subcommittees, Chairman and 

Ranking Minority Member 

U.S. Senate 

Senate Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on State, Foreign Operations and Related Programs 

Senate Committee on Armed Services 

Senate Committee on Foreign Relations 

Subcommittee on International Operations and Terrorism 

Subcommittee on Near Eastern and South Asian Affairs 

Senate Committee on Homeland Security and Governmental Affairs 

Subcommittee on Federal Financial Management, Government Information and 

International Security 

Subcommittee on Oversight of Government Management, the Federal 

Workforce, and the District of Columbia 

U.S. House of Representatives 

House Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on Foreign Operations, Export Financing and Related Programs 

Subcommittee on Science, State, Justice and Commerce and Related Agencies 

House Committee on Armed Services 

House Committee on Government Reform 

Subcommittee on Management, Finance and Accountability 

Subcommittee on National Security, Emerging Threats and International 

Relations 

House Committee on International Relations 

Subcommittee on Middle East and Central Asia 
10 

Appendix D. Audit Team Members 

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

Inspector General for Iraq Reconstruction, prepared this audit report. The Office of 

the Special Inspector General for Iraq Reconstruction staff members who 

contributed to the report include: 

Timothy Baum 

James Carrera 

Glenn Furbish 

Robert Murrell 
11 

Management Comments 

Commanding General, Multi-National Security 

Transition Command - Iraq 

Command Reply 

SIGIR Audit of Acquisition of Armored Vehicles 

Purchased Through ContractW914NS-05-M-1189 

Multi-National Security Transition Command-Iraq 

Draft Audit Report 2005-14 30 Sep 05 

Objective: To determine whether adequate procurement practices were used to acquire 

the vehicles and whether the government received value for the money spent on the 

vehicles. 

SIGIR Conclusion: The MNSTC-I purchased seven armored Mercedes-Benz vehicles 

that did not have the level of armored protection it required. In addition, the MNSTC-I 

could not locate one of the vehicles after delivery was made. As a result, the MNSTC-I 

may have needlessly paid $945,000 for armored vehicles that may not meet the purpose 

intended or may not be available for use. 

Recommendation 1: Ensure that requirements are appropriately and accurately defined 

to procurement officers, including the technical specifications, during the acquisition 

process. 

MNSTC-I Comments and Action Taken: Concur. MNSTC-I has and will ensure that all 

command elements know and are trained to understand that contract requirements are 

appropriately and accurately defined and provided to procurement officers, including 

technical specifications, during the acquisition process. 

Recommendation 2: Obtain an independent inspection of the condition of the vehicles 

to determine whether those vehicles are non-conforming to the contracts terms and 

specifications. 

MNSTC-I Comments and Actions Taken: Concur. Once we have received a legal 

response and recommendation from JCC-I/A command counsel (see MNSTC-I response 

to SIGIR Recommendation 3), and dependant upon their recommendation, we will make 

a determination if there is a benefit to a third party inspection. If so, MNSTC-I will 

identify and out source a contract to an independent third party inspection vendor. 

Recommendation 3: Obtain legal advice to determine what actions are available should 

the vehicles be found to be non-conforming to the contracts terms and specifications. 

MNSTC-I Comments and Actions Taken: Concur. MNSTC-I will ask JCC-I/A to 

obtain a legal opinion from the JCC-I/A command counsel regarding (1) the available 

actions to be taken should the vehicles be found to be non-conforming to the contracts 

terms and specifications, and (2) any other recourses available regarding the determined 

value of the vehicles, prior to seeking an independent determination. 
12 

MNSTC-I Command Response to SIGIR Report W914NS-05-M1189 

Page 2 

Recommendation 4: Locate the missing vehicle and have it inspected for conformance 

to the contracts terms and specification. 

MNSTC-I Comments and Actions Taken: Concur. MNSTC-I CPATT is actively 

searching for the missing vehicle. Once the vehicle is located, it will be inspected for 

conformance to the contracts terms and specifications. 

The above document was provided in response to the draft of this audit report by officials 

at the Multi-National Security Transition Command-Iraq and represents the position of 

the Commanding General, Multi-National Security Transition Command-Iraq.
13 

Management Comments 

Commanding General, Joint Contracting Command – 

Iraq/Afghanistan