U.S./Swiss company battle over cost of foodservice for troops

Remember how the Pentagon got in trouble for purchasing $640 toilet seats and $400 hammers? This time, the defense department in hot water over a food and water dispute.

The Defense Logistics Agency, which supervises the supply of food and beverages to our Massachusetts sons and daughters in Afghanistan, is battling over a multi-billion dollar contract dispute with a Swiss company called Supreme Foodservice. A House oversight subcommittee is investigating the agreement signed back in 2005. The original contract was for Supreme to provide supplies to four locations, they now cover 250 sites.

The U.S. is demanding that the Swiss company return $750 million in overpayments, while Supreme claims the Pentagon still owes them more than $1 billion on top of the $5.5 billion we’ve already paid to feed our troops. A new request for bids for continuing foodservice has been issued that many believe will be worth up to $10 billion. (The cost correlates to the risk of getting food to front-line locations that are difficult and dangerous to get to.)

As a member of the subcommittee, U.S. Rep John Tierney, D-Mass., requested documentation from the logistics agency and foodservice company, including any communications about how the contract expanded so dramatically. Tierney said the drastic overpayment is outrageous, especially now that the troops are being scaled back.

An independent commission has already estimated that the U.S. has thrown away anywhere from $31 billion to $60 billion during the last decade because of lack of competition for contractors, corruption, and lackadaisical work requirements and oversight.

Throwing an additional wrench into this investigation is that auditors are questioning the integrity of electronic documents and the money exchange rates.

Source: greenfieldreporter.com, “Lawmakers criticize Pentagon, contractor for billion-dollar billing dispute over food services,” Richard Lardner, May 24, 2012