The Hill December 2, 2011
Following the devastating earthquake in Haiti on January 12, 2010, the U.S. launched an unprecedented relief effort, eventually totaling over one billion dollars. But the lead agency in the immediate aftermath was not the U.S. Agency for International Development (USAID), as is typically the case when our nation provides humanitarian assistance, but the military. Just after the earthquake, the U.S. had over 20,000 troops in Haiti. Of the $1.1 billion in humanitarian funding from the U.S. in 2010, nearly half was channeled to the Department of Defense.
As has been the case in Iraq and Afghanistan, relief efforts have relied heavily on contractors, a number of which have a history of waste, fraud and abuse. An analysis of federal contracts has revealed that Kuwait-based Agility Logistics (formerly PWC Logistics) — currently under indictment for overcharging the U.S. military by up to $1 billion — has benefited from over $16 million in funding awarded in the aftermath of the earthquake.
With so much on the line, the U.S government, across the board, must step up its oversight of contractors to ensure taxpayer dollars are not wasted on companies with poor track records.
Agility has been barred from receiving government contracts since November 2009, when a federal grand jury indicted the company for overcharging the U.S. military on $8 billion in contracts to supply food for troops in Iraq, Kuwait and Jordan. Agility was accused of “intentionally failing to purchase less expensive food items, knowingly manipulating and inflating prices, and receiving product rebates and discounts that it did not pass on to the government as required.” The prospect of additional charges still exists.
In November 2009 Agility was added to the U.S.’s Excluded Party List System (EPLS), which prevents them from procuring contracts from any government agency. The EPLS designation has been extended to over 125 related organizations as the investigation has continued; all of them have been indefinitely barred.
Despite the blacklist designation Agility was able to secure government funding for work in Haiti through a joint venture. An analysis of the Federal Procurement Data System shows that Contingency Response Services LLC (CRS) has received over $16 million in government funding from the Department of the Navy since the earthquake. The particularly bland sounding Contingency Response Services consists of three defense contractor giants — Dyncorp, Parsons and Agility Logistics (then PWC logistics).
This week, it was reported that federal prosecutors are investigating potential new criminal charges against Agility, the Kuwaiti logistics company under indictment for overcharging the U.S. military on food supply contracts.
Agility (formerly Public Warehousing Company KSC and PWC Logistics), has been suspended from federal contracting since being indicted in November 2009. (The suspension record can be found on the Excluded Parties List System website.) Agility is also facing a civil False Claims Act lawsuit in the matter. The criminal charges also prompted DynCorp International to fire Agility as its main subcontractor in Afghanistan. This is what happens when you get caught “Playing With Uncle Sam’s Food,” as POGO wrote when we first heard about the case.
According to a court order, prosecutors subpoenaed an Agility executive, retired U.S. Army General Dan Mongeon, to testify before a grand jury in order to explore possible new charges. Agility is accused of overcharging the Department of Defense by inflating food prices and submitting false information on food supply contracts awarded between 2003 and 2005. It is not clear what General Mongeon’s testimony will add to the case, which seemed on the verge of settling last year.