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First Kuwaiti Dominates Its Prime Contractor
Planning Documents Reveal Partnership Solely to Satisfy Contract Requirements
By DAVID PHINNEY 10/10/2007 5:16 PM ET
Riding on the success of winning the $592-million Baghdad deal to build the largest diplomatic compound in the world, First Kuwaiti General Trading and Contracting last year partnered up with the Rockville, MD-based Grunley Walsh LLC to bid on other US embassy and consulate building contracts in other countries.

In September 2006, the wedding bore fruit, as Grunley Walsh won three new contracts worth over $100 million for embassy and consulate work in Africa, India, and Indonesia.

Though GW bid on the work as the prime contractor in partnership with First Kuwaiti, documents acquired by IraqSlogger reflect an arrangement that looks largely devised as a way for First Kuwaiti to sidestep State Department contract requirements.

Because only US-owned and headquartered companies may perform classified embassy work, First Kuwaiti apparently partnered with Grunley Walsh in order to be considered for a number of lucrative, high-security contracts they wanted.

As First Kuwaiti’s general manager Wadih al-Absi wrote to Grunley Walsh president, Kenneth M. Grunley in a March 2007 email, "Both parties are fully aware and reconfirm that the arrangement of Prime/Subcontractor is solely for the purpose of satisfying the requirements of OBO (State Department Bureau of Overseas Buildings Operations)."

Absi was writing to Grunley, he said, in order to "set some policies and procedures in place as to avoid further complications and to continue a good and long working relationship.”

In the draft of working policies between the two firms (see document below), the relationship Absi outlines gives a strong indication that First Kuwaiti dictates the terms of the partnership, despite Grunley Walsh's role as the prime contractor.

Absi reminds Grunley that his firm is not to send any written communications to OBO without FKTC approval, or forward any communications from FKTC with additional comments, though, "It is FKTC sole decision whether such communications are to be discussed with GW or not prior to submittal to OBO."

GW also has to immediately forward to FKTC any communications from OBO, Absi says, and inform First Kuwaiti of any conversations.

Absi also advises Grunley that First Kuwaiti will do all the negotiating for contracts, and that, "GW shall not enter into any contracts or agreements without prior written approval of FKTC... (and) will bear any consequences to any agreements entered without prior written approval of FKTC."

Meanwhile, the marriage of the two firms continues to show promise. First Kuwaiti and Grunley Walsh are thought to be poised for building a State Department project in Saudi Arabia. They also were believed to have been at the top of the list for building a new US embassy in Beirut, Lebanon, until the US State Department nixed this summer after protests from the U.S. ambassador there who said the area was unsafe.

FKTC_POLICY___PROCEDURES_BETWEEN_FKTC_AND_GW.doc

David Phinney is an independent investigative journalist based in Washington, DC. He can be reached at david.phinney@verizon.net.

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