NOTE 15. Commitments and Contingencies
USAID is involved in certain claims and suits, and complaints
that have been filed or are pending. These matters are in
the ordinary course of the Agency’s operations and are
not expected to have a material adverse effect on the Agency’s
financial operations.
As of September 30, 2006 a total of nine cases were pending.
Three cases have been designated as reasonably possible:
- The first case is a contract claim arising out of SSA’s
contract to repair and operate an Iraqi port. The estimated
loss is up to $800,000.
- The second case is an appeal of the Contracting Officer’s
disallowance of the costs of supplemental Accidental Death
and Dismemberment and Business Travel Insurance for contractor
employees related to initial deployment to Iraq. The estimated
loss is up to $750,000.
- The third case is a contract claim over the payment of
taxes on a building leased by USAID as mission offices.
The estimated loss is up to $800,000.
The statuses of the remaining six litigation cases are at
a remote designation.
In 2006, a case disclosed in 2005 was settled for $1,000,000.
A case was deemed as highly probable for a lease termination
penalty of $3,000,000. This was disclosed in 2006 financial
statements.
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