Thursday, Jul 22, 2004
Dyncorp, the Texas-based private military contractor, is seeking to overturn the largest private security deal in Iraq, claiming that the contract was improperly awarded.
The US army surprised many in the industry last month when it awarded a Dollars 293m (Euros 237m, Pounds 158m) contract to co-ordinate private security companies in Iraq to Aegis Defence Services - a small UK start-up with no experience in Iraq. More controversially, the company is run by Tim Spicer, a former British army officer who was at the centre of a political scandal in the UK during the late 1990s.
Dyncorp, which lost out on the contract, has a long and close relationship with the US government, performing a range of tasks including guarding military compounds and training the Iraqi police.
Dyncorp has submitted a formal protest to the audit arm of the US Congress, the Government Accountability Office, which will rule on the dispute by September 30.
In its complaint, a copy of which was obtained the Financial Times, Dyncorp draws attention to Mr Spicer's past involvement in the "Sandline affair" of 1998, in which a company he was director of sold arms to Sierra Leone in contravention of a United Nations embargo.
Mr Spicer later touched off a political storm by claiming that he had done so with government approval. In 1999 a UK parliamentary committee attacked foreign office officials for treating the UN embargo "in a disgracefully casual manner".
Mr Spicer was briefly imprisoned by the military in Papua New Guinea, which overthrew the government when it learnt that he had been hired to put down a rebellion.
"Any reasonable assessment . .. would have to conclude that Aegis is not responsible," Dyncorp said in its submission. "For this reason, Aegis should be considered ineligible for contract award."
The Dyncorp complaint said its bid was "shockingly" rejected by the US army despite being more than Dollars 80m lower than the winning offer.
Dyncorp claimed it was wrongly taken out of the running after a technical analysis incorrectly ruled that its bid was "marginal" in several important respects. Even if that were true, the company argued, its bid should not have been excluded under the tender rules.
"The decision to award the contract to Aegis is improper," the company wrote. "Under the terms of the solicitation, Dyncorp is entitled to the contract award."
Dyncorp confirmed that it had lodged an appeal but declined to comment while the contract was under review. However, the company has enlisted a Republican Congressman from Texas to lobby the Pentagon on its behalf.
In a letter to the US secretary of defence, Congressman Pete Sessions said that Mr Spicer's companies had no experience in Iraq running security operations.
"It is inconceivable that the firm charged with the responsibility for co-ordinating all security firms and individuals performing reconstruction . . . has never even been in the country," he wrote.
Mr Sessions was not available for comment.
As the contract stands, Aegis will become the co-ordinating hub for the more than 50 other private security companies working in Iraq. It will also provide its own force of up to 75 heavily armed "close protection teams" to escort US staff overseeing reconstruction projects around Iraq.
Peter Singer, an industry analyst at the Brookings Institution and expert on private military contracts, says that regardless of the eventual winner, the contract was itself poorly conceived. He derides the idea that the oversight of private military companies working in Iraq could be outsourced to another private military company and criticises the awarding of such a contract by the US just weeks before the handover of sovereignty to Iraq.
He also claims that the US had apparently done little due diligence on Mr Spicer and his company before awarding the contract. He says that the army did not appear to have done the background checks on him which he would have been available on the internet. "It would be laughable if it weren't so sad."
UK officials are concerned about the potential political fall-out of the contract continuing given Mr Spicer's history. "The contract in question was awarded by the US government to Aegis and the British government is not a party to the contract nor has it been involved in any way in its negotiation," said the Foreign Office last night.
As far as Aegis was concerned, the tender process was exemplary and the company was successful, a spokesperson for Mr Spicer said. She declined to comment further.
By JIMMY BURNS and THOMAS CATAN
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