DynCorp Faces Another Subcontractor Nonpayment Lawsuit

For the second time in two months, a subcontractor has sued DynCorp International for allegedly stiffing it on a controversial U.S. Army Corps of Engineers (USACE) reconstruction project in Afghanistan.

In a complaint filed in federal court in the Eastern District of Virginia, Afghan company Omran Consulting Construction & Engineering claims DynCorp is wrongly withholding more than $500,000 in payments and costs on subcontracts to construct a garrison for the Afghanistan National Army in Kunduz Province. This is the infamous Camp Pamir garrison project investigated last year by the Special Inspector General for Afghanistan Reconstruction (SIGAR), which criticized USACE for allowing DynCorp to walk away from the $71 million project without holding it accountable for completing the job or repairing numerous structural defects.

Readers of this blog may recall from June that another subcontractor, Turkish company Nasa Construction and Trade, also sued DynCorp seeking to recover money it claims DynCorp owes for construction services in Afghanistan, including Nasa’s work on the Camp Pamir project. Nasa seeks more than $1.6 million in unpaid subcontract balance and $4.2 million in damages.

Both companies claim they were hindered in their performance by numerous obstacles and delays caused by DynCorp. Both also allege the unfairness of DynCorp being allowed to walk off the job fully paid and absolved of its obligations while holding onto millions of dollars owed to its subcontractors.

DynCorp provided the Project On Government Oversight the following statement regarding the Omran lawsuit:

This suit involves a project on which the Company incurred a significant loss of more than $26 million. Where contracted services were performed satisfactorily, subcontractors were compensated appropriately in accordance with contract terms. As a responsible government contractor we have an obligation to hold our subcontractors to the standards outlined in their contracts. Given that this is ongoing litigation it would be inappropriate to comment further.

SIGAR released an alert letter in June highlighting the very serious problem of nonpayment of subcontractors in Afghanistan. According to SIGAR, the failure of prime contractors to pay their subcontractors poses many risks, including death and kidnapping threats, work stoppages, business disruptions and failures, incomplete projects, waste, and corruption. SIGAR has opened more than 50 investigations into $69 million in funds allegedly owed to subcontractors.