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SPECIAL INSPE CTOR GENE RAL FOR IRAQ RECONSTRUCTION
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
400 Army Navy Drive • Arlington, Virginia 22202

Special Inspector General for Iraq Reconstruction
Report No. SIGIR-05-018 (Project No. SIGIR-2005-14)
October 21, 2005
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, Multi-
National 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 Commanding General, Joint Contracting Command – Iraq/Afghanistan 11
13

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.
1

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.
2

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.
3

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
4

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.
5

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.
6

Appendix B. Acronyms
JCC-I/A MNSTC-I Joint Contracting Command – Iraq/Afghanistan
Multi-National Security Transition Command – Iraq
7

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
8

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
9

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
10

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.
11

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.
12

Management Comments
Commanding General, Joint Contracting Command –
Iraq/Afghanistan
13