Blacklisted by the World Bank, Chicago ﬁrm still gets millions in new contracts
In 2006, the Mongolian Finance Ministry hired a small Chicago-based consulting firm called Glocoms to strengthen its budget planning. The $1.5 million job, financed by the World Bank, aimed to help a country still grappling with Soviet legacies to reallocate its spending and reduce its debt.
Unfortunately, the company’s consultants didn’t always show up and their reports were riddled with errors, said Zahid Hasnain, who oversaw the project for the World Bank starting in 2008. Glocoms was supposed to send employees, he said, but instead subcontracted the work to another company.
After World Bank investigators took a broad look at Glocoms’ work and concluded that in Mongolia it had misrepresented the availability of key staff, causing “performance deficiencies,” the contract was canceled, according to a debarment notice.
But the small contractor had aspirations beyond Mongolia. The investigators also concluded that Glocoms had misstated its qualifications when bidding for contracts in Ethiopia, Iraq, Vietnam and the West Bank and Gaza – in a total of 49 instances.
The World Bank blacklisted the firm and its owner in 2010 for four years, one of its more severe penalties, and a year later, extended the punishment until March 2018.
That didn’t stop Glocoms from getting new contracts from federal or global public institutions, including the U.S. government, a Center for Public Integrity investigation shows.
After its World Bank debarment, Glocoms landed dozens of contracts and nearly $9 million for providing services to U.S. agencies, mostly the Defense Department, according to FedMine, a firm that aggregates federal contracting data. These included assignments to supply flight surgeons, paramedics and hazardous-waste-disposal personnel.
Katia Savchuk, Bethan McKernan, Michael Phillis and Annie Zak