Pentagon may have overpaid fuel contractor by $200 million


The Defense Department Inspector General released a summary of a recent investigation into contracts awarded to the International Oil Trading Company (IOTC), which provides fuel to the military in Iraq by using supply routes through Jordan.

According to the report, contract officers at the Defense logistics Agency, which handles energy/fuel procurement for DOD, did not have accurate data to compare against other contracts and ended up overpaying. By a lot.

With total contracts valued at $2.7 billion, it added up. According to the report:

“We calculate that DLA Energy paid IOTC about $160 to $204 million (or 6 to 7 percent) more for fuel than could be supported by price or cost analysis.”

The investigation was sparked by Congressman Henry Waxman, the former Chairman of the House Committee on Oversight and Government Reform, who raised concerns about the oil company, according to the report.


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