Tuesday, November 20, 2012

Contractor lost $21 million in ill-fated Cuba project

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American Alan Gross says a Maryland contractor's reckless desire for profit led to hasty decisions that may have made it easier for Cuban authorities to capture him in December 2009.
Authorities jailed Gross while he was carrying out work under a USAID contract called, "Cuba Democracy and Contingency Planning Program."
Published reports say Gross received more than $500,000 for his work, which involved setting up satellite Internet connections in Cuba that didn't depend on the government network.
Development Alternatives Inc., or DAI, of Bethesda, Md., hired Gross to carry out the work.
I looked at contract information available in public records (See PDF of records) and it appears to me that DAI lost at least $21,452,813 in future receipts after Gross was arrested and USAID cancelled the contract.

Below is what USAID paid DAI under a contract worth $28,310,630:
  • Aug 14, 2008 -  $2,000,000
  • Sep 30, 2008 - $2,000,000
  • May 18, 2009 - $1,000,000
  • Aug 18, 2009 - $1,000,000
  • Sep 29, 2009 - $853,976
  • Sep 30, 2009 - $3,841
Total: $6,857,817

In a Nov. 16 lawsuit against DAI and the federal government, Gross says a desire for profit motivated the contractor. If that's true, the pursuit of money may have also prevented the company from completing the contract and collecting $21 million.
But don't feel too sorry for DAI. USAID has given the company more than $4 billion since 2000 for projects around the world.
The real loser is Gross, now serving a 15-year prison term, and his wife, Judy, and the rest of their family.
P.S. References to DAI's Cuba project are somewhat cryptic in public records. If anyone has more details or additional insight, or if I've missed a contract or a relevant document, please let me know and I'll add any additional information.
The seven transactions listed above are bundled with a total of 35 transactions worth a total of $265,664,681 that USAID conducted with DAI.

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