Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Pentagon Seeks $756.9 Million Overpayment Refund From Supreme Foodservice

The Pentagon is pressing one of the largest contractors in Afghanistan, Supreme Foodservice AG, to refund within 30 days overpayments of $756.9 million in unsupported transportation costs, according to a spokeswoman

by Tony Cappacio Bloomberg  December 13, 2011

The Pentagon is pressing one of the largest contractors in Afghanistan, Supreme Foodservice AG, to refund within 30 days overpayments of $756.9 million in unsupported transportation costs, according to a spokeswoman.

The Defense Logistics Agency made the decision last week“after extensive negotiations, in which Supreme and the agency were unable to agree on final rates” for a contract first awarded in December 2005, said agency spokeswoman Mimi Schirmacher in a statement.

Supreme Foodservice of Ziegelbrucke, Switzerland, through Sept. 30 has been paid $5.5 billion since 2005 to supply and transport food, water, three-layered corrugated packing boxes and other non-food items to U.S. troops in Afghanistan. It provides fresh fruits and vegetables to as many as 246 sites in Afghanistan under the agency’s “Subsistence Prime Vendor”program.

Schirmacher said the Defense Logistics Agency can’t break down the $756.9 million by category “since it involves proprietary pricing information.”

Company spokeswoman Victoria Frost said in an e-mail that the contested rates have been in negotiations for several years. The company “strongly disputes” the repayment request and will appeal, she said.

‘Just How Bad’

Pentagon Inspector General Gordon Heddell, whose auditors in a March report first highlighted Defense Logistics Agency oversight deficiencies, said at a Dec. 7 hearing that the original Supreme contract was “an example of just how bad it can get.” The contract “wasn’t well-designed” or “well-thought out.”

Only this year has the defense agency assessed final transportation rates for a contract awarded in 2005, Heddell said.

“We are just now determining what should have been the reasonable and fair prices to pay,” Heddell told a House oversight committee.

Supreme’s head of Washington-based operations is Robert Dail, a former Army Lieutenant General who headed the DLA between August 2006 and November 2008. He presented Supreme in January 2007 with the agency’s “New Contractor of the Year Award.” He joined Supreme in March 2009 as president of Supreme Group USA in Reston, Virginia

Please read more here

December 14, 2011 Posted by | Afghanistan, Civilian Contractors, Contractor Corruption, Contractor Oversight, Department of Defense, Follow the Money | , , , , , , , , | Leave a comment

In Iraq, U.S. turns to more private contractors

By Walter Pincus at Checkpoint Washington Washington Post  November 9, 2011

As American troops head out of Iraq, U.S. officials are being forced to bring in more private security contractors.

The withdrawal of the remaining troops from Iraq — 33,000 at last count — has caused U.S. officials to move quickly to fill a series of security gaps to ensure the continued protection of American diplomatic personnel as well as U.S. goods.

The latest example comes from the Army, which said in a recent notice that it has increased the number of contracted security teams hired to escort convoys of food and fuel coming in from Kuwait.

The U.S. military had previously provided security for truckers hired by the Defense Logistics Agency for such convoys, and the truckers’ contracts require that they have security escorts.

In justifying the expanded contract, the Army said that if it were forced to delay the hiring of more contractors, “the U.S. military would have to stay in theater longer than planned to provide the escorts and postpone their re-deployment operation.”

Getting food and fuel from Iraqi sources was not an option

Please read the entire article here

November 9, 2011 Posted by | Civilian Contractors, Government Contractor, Iraq, Private Security Contractor, State Department | , , , , , , | Leave a comment

Turkmenistan: Ashgabat Playing Key US/NATO Support Role in Afghan War

Russia’s introduction of an excise tax on fuel exports to Kyrgyzstan last April cost the US government an additional $15.4 million over just a 16-day span.


Despite its long-avowed status as a neutral nation, Turkmenistan is playing an important supporting role for US and NATO forces fighting in Afghanistan. Washington and Ashgabat are both keen to keep Turkmenistan’s strategic role low-key, especially the financial aspects of cooperation.

What is known is that the US government and its contractors do not pay taxes on fuel intended for military use that is purchased in Turkmenistan, as well as in Azerbaijan. Fuel is exempt from local duties and taxes due to Turkmenistan’s and Azerbaijan’s participation in the NATO Partnership for Peace program, a spokeswoman for the Defense Logistics Agency (DLA), the Pentagon’s main procurement arm, told EurasiaNet.org. Please see the original here

January 10, 2011 Posted by | Afghanistan, Civilian Contractors, Follow the Money, NATO | , , , , , , , , , | Leave a comment

Iraqi Logistics Contract Case Continues Mired In Controversy

Agility Deny Change of Legal Status as Shares Fall

US – KUWAIT – IRAQ – DUBAI – The lawsuit outstanding against Agility, the Kuwait based logistics contractor, seems destined to continue its controversial way toward the Courts after what appears to be yet another piece of disinformation. The shipping of supplies to the US military machine in Iraq, the previous misinformed press coverage and Agility’s replacement by Dubai listed Anham FZCo has already been liberally covered in these pages.

Although Agility have a published a specialist website to cover their legal wrangle with the US Defense Department which dates back to an FBI announcement in November 2009 there is no mention of this latest development. On Friday Reuters apparently published an article stating US prosecutors had filed a civil suit against Agility containing an accusation that fraud had been involved in the execution of the food logistics contract which was worth close to $10 billion.

Agility shares then apparently fell by around 5% despite Agility having argued all along that they wanted to fight the case as a civil, not a criminal matter. The outcome of the case is of critical importance to Agility which is banned from further US Government tenders until the matter is resolved, penalties could reach double the amount proved to be embezzled.

Reuters now report that a statement from Agility last night saying the allegations of a new lawsuit were untrue saying:

“The new civil case it spoke about is not a new lawsuit against Agility, but a procedural amendment to the case that was announced in November 2009.”

It is not known at this stage the fate of other US freight contracts obtained by the Agility Defense & Government Services (DGS) which predate the scandal, in some cases by only a week or so, for shipping supplies to numerous countries including Afghanistan. Also questions remain over the employment of senior US military officials, including some from the U.S. Defense Logistics Agency (DLA) and responsible for procurement, who latterly became Agility staff members.  Please see the original here

January 10, 2011 Posted by | Civilian Contractors, Contractor Corruption, Department of Defense, Iraq | , , , | Leave a comment

New role for Defense Logistics Agency

UPI Security Industry

FORT BELVOIR, Va., Jan. 5 (UPI) — The U.S. Defense Logistics Agency is procuring building materials for the U.S. Army Corps of Engineers in Afghanistan.

U.S. Army Lt. Col. Carl Knotts, chief of plans, exercise and readiness branch in DLA’s Joint Logistics Operations Center, said the agency began the effort in October because of concerns about the quality of locally procured construction materials.

“What they’ve asked us to do is the procurement and the strategic distribution to the geographic region,” he said.

“From an agency perspective, it’s an expansion into a business line that we generally didn’t have a business presence of this magnitude,” he said. “This is a chance for us to demonstrate that we can do this and do it well.”  Please read the entire article here

January 5, 2011 Posted by | Afghanistan, Government Contractor, USACE | , , , , | Leave a comment

Defense Logistics Agency extends contract for firm whose officials include former director Army Lt. Gen. Robert T. Dail

Dail retired from the Army in November 2008. Four moths later, he was hired as president of Supreme Group’s new entity, Supreme Group USA, located in Reston.

Agency extends contract for firm whose officials include former director

by Walter Pincus at The Washington Post

The Defense Logistics Agency has extended without competitive bidding a $4 billion food-supply contract to a company whose top officials include a retired lieutenant general who commanded the agency just over two years ago.

In an announcement, the DLA said it had granted a two-year contract extension to Supreme Foodservice to supply food to U.S. and coalition troops in Afghanistan. It said the extension was “required in order to maintain continuous prime vendor coverage and uninterrupted supply of vitally needed subsistence items.”

Last March, the agency announced plans to rebid the Afghan food contract for up to five years but never put out a bid proposal. In announcing the extension, the agency redacted an explanation for the delay, although the uncertainty about troop levels may have been a factor.

The DLA said in a statement that a new proposal “is still in development” and that the agency had “determined that the follow on procurement may take two years to be awarded.”

Supreme Foodservice is part of Supreme Group, a global logistics services company that was founded in 1957 by a former U.S. soldier and that is now headquartered in Amsterdam. It has held the Afghan food contract since 2005.

In 2007, Army Lt. Gen. Robert T. Dail, the DLA’s director at the time, gave the agency’s New Contractor of the Year award to Supreme Foodservice, saying that in Afghanistan, the company “has used a combination of ground, helicopter and air transportation to more than 65 military sites to ensure mission success.”

Dail retired from the Army in November 2008. Four moths later, he was hired as president of Supreme Group’s new entity, Supreme Group USA, located in Reston.

Please read the entire article here

January 3, 2011 Posted by | Afghanistan, Civilian Contractors, Contractor Corruption, Contractor Oversight, Contracts Awarded, Department of Defense, Follow the Money | , , , | 2 Comments

Pentagon forced to extend Iraq contracts that are under appeal

By Walter Pincus at The Washington Post

The Defense Department is being forced to extend multimillion-dollar contracts for services in Iraq, including one with a firm under criminal indictment, because losing bidders have legally challenged the companies selected as replacements.

Agility, a Kuwaiti firm charged in November 2009 with overbilling food contracts worth $8.5 billion over four years for troops, civilians and contractors in Iraq, Jordan and Kuwait, recently received a $26 million, six-month contract extension. The extension was granted because another Kuwaiti concern challenged the April award of the food contract to Agility’s replacement, Anham, a Dubai-based conglomerate.

A second firm, Fulcra Worldwide of Arlington was awarded an extension worth $5 million on its strategic communications contract in Iraq with U.S. Central Command after Fulcra itself filed a claim against loss of the contract to another bidder, SOS International, a New York firm with offices in Reston.

The Defense Logistics Agency, which supervises the food contract, decided to extend the Agility contract through April 2011 while the protest against Anham by another bidder is being adjudicated by the Government Accountability Office (GAO).

Agility had been scheduled to transition the work, which amounts to more than $300 million a year, to Anham. However, cargo shipper Kuwait & Gulf Link Transport filed a protest against the award on the grounds that Anham’s proposal failed to meet criteria set out in the contract offering.

While a decision by the GAO is expected shortly, Anham has been delayed in preparing to take over the contract, which involves not only purchasing and supplying food and other items, but also warehousing it in Kuwait before shipping to Iraq and Jordan to meet the needs of about 145,000 people.

Meanwhile, Agility, which has been barred from bidding directly or through affiliates on new U.S. contracts, will continue to provide provisions under the contract extension. The company also has been fighting the Justice Department indictment in federal court in Georgia claiming it cannot be subpoenaed or tried anywhere outside Kuwait. After the indictment, Agility closed its U.S. offices, even though top officials of the subsidiary handling the contract are not only U.S. citizens but also former Army generals, one of whom served in a senior position with the Defense Logistics Agency.

Central Command announced last week it had to extend the Fulcra contract for six months because to “award to any other source would result in unacceptable delays and negatively impact the ability” of U.S. forces in Iraq to carry on “all aspects of media communications activities,” according to the paper justifying the decision.

Under the contract, which it has had for more than three years, Fulcra not only works directly with the Iraq government spokesman and ministers at the Defense and Interior ministries, but also carries out monitoring of media in Iraq, plans strategic messaging, and manages web materials for English and Arabic sites supporting the Iraq command. Fulcra is the new name for the Lincoln Group, which as a Pentagon contractor in 2005 was found to have paid Iraqi newspapers to print stories written by American soldiers or its employees.

Fulcra lost its bid on the new contract in June and in July filed the first of three complaints with the GAO. It lost the first two and before the last one was settled, the firm filed a protest in October with the United States Court of Federal Claims, where it is pending. Meanwhile, Central Command was faced with a dilemma since Fulcra’s complaint prevented SOS International from making preparations to begin work and keeping Fulcra in place was its only option.

Fulcra is claiming that SOS filed an “unreasonably low-priced proposal,” according to its complaint before the Court of Federal Claims. Arguing the new contract was “largely similar” to the one Fulcra now holds, the firm said its current monthly price was $531,459 while the SOS bid averaged out to $158,620 a month for what were to be “largely similar” services. In the complaint, Fulcra argues that SOS’s bid, which offered a 70 percent reduction in cost, was “unrealistic” and thus should have been”technically unacceptable” by Central Command.

Fulcra described the SOS bid as a “bait and switch” violation, where the offer misrepresents its costs with the hopes of winning the contract and then expects to be paid based on higher actual expenditures.

SOS’s response to the allegations was sealed and a lawyer representing the firm said she would not comment on the case. Please see the original here

See also at MsSparky

December 13, 2010 Posted by | Contractor Corruption, Department of Defense, Iraq, Kuwait, Pentagon | , , , , , | Leave a comment

Pentagon Negotiates with Indicted Contractor, Despite Suspension

At The Center for Public Integrity

For the second time this year, the Pentagon is trying to give a no-bid contract extension to a logistics company operating a supply warehouse in Kuwait even though the firm has been barred from federal business following an indictment for billing fraud.

The Defense Logistics Agency’s planned extension to Public Warehousing Co., also known as Agility, provides a poignant reminder that the government’s decision to suspend or debar a contractor for alleged misconduct doesn’t always stop the flow of federal funds to that firm, procurement experts told the Center for Public Integrity.

The contract extension may be legal but it “clearly violates the intent” of the government’s earlier decision to suspend Agility, said Dan Goure, vice president of the Lexington Institute, a national security think tank.

Please read the entire article here

December 9, 2010 Posted by | Civilian Contractors, Contractor Corruption, Contractor Oversight, Iraq, Pentagon | , , , | Leave a comment

New contractor picked to supply coalition troops in Mideast

By Walter Pincus

at the Washington Post

A new contractor has been selected to supply billions of dollars worth of food and beverages to U.S. and other coalition troops in Iraq, Kuwait and Jordan in coming years, replacing a Kuwait-based firm that was indicted in November on charges of overbilling the government for those services.

Agility, a multibillion-dollar, worldwide government contractor, has been fighting the charges in federal district court in Atlanta. Agility and all its subsidiaries are barred from bidding on U.S. government contracts while the legal case is unresolved.

Anham, a six-year-old Dubai-based firm, was chosen over three other bidders for the new contract, which could be worth between $2 billion and $6 billion in the next six years, said Dennis J. Gauci, a spokesman for the Defense Logistics Agency. Anham is a collaboration of three multi-national firms.

Anham’s chairman and chief operating officer is Abul Huda Farouki, a Northern Virginia resident and well-known social figure in Washington. His HII-Finance Corp., based in Fairfax County, joined with two giant Middle East conglomerates to form Anham. One is Saudi-based Arab Supply and Trading, and the other is the Munir Sukhtian Group of Companies, a Jordanian investment and operating entity. Since 2004, Anham has “continually grown and expanded its business operations to over 20 countries,” according to its Web site.

Another Farouki enterprise, Nour USA, is listed on the Anham Web site as an affiliate. Nour USA is a service company “that provides Anham with a strong interface connection with the U.S. Government, and American non-governmental and business organizations,” according to the site. “Nour has proven itself to have the experience and knowledge required to help clients acquire, manage, and execute contracts and projects; especially entities with an international focus.”

There will be a roughly six-month transition from Agility to Anham “to allow the new prime vendor sufficient time to take over the contract and the current contractor to diminish current stocks in the supply chain,” Gauci said Thursday.

April 16, 2010 Posted by | Contract Awards, Contractor Corruption, Contractor Oversight, Wartime Contracting | , , , , , , | Leave a comment