Tuesday, August 17, 2010

Agility Cling Onto US Logistics Defence Contract In Iraq And Kuwait

More Accusations as Shares Fall
Shipping News Feature

KUWAIT – News this week that, despite the dismissal of Agility as suppliers to the US military after accusations of impropriety the logistics and supply chain group are still to continue to procure and freight food supplies to troops in Iraq and Kuwait until 4th December as was originally proposed. The contract is due to pass to the replacement contractors, Anham LLC from Dubai, covered in our exclusive story on the 15th April.

Agility claim this week that the awarding of the contract to Anham was subject to protest from other bidders thus delaying the transition but our original piece made clear that December was to be the switch over month for the shipping of supplies.

Agility has been the target of Justice Department allegations of fraud and overcharging on the Prime Vendor contracts. Agility views the case as a civil contract dispute rather than a criminal matter. The Company’s prices, choice of suppliers and business practices were established in consultation with DLA, which they say fully approved them.

The Kuwait based group told Handy Shipping Guide:

“Agility has held the Prime Vendor contracts since 2003. Its work on the Prime Vendor I and II contracts has set the standard for performance-based logistics in a wartime environment. The Company has more than seven years of exceptional execution on the largest-ever U.S. military subsistence procurement contract, providing unparalleled service to troops and exceptional value for taxpayers. The Company received some of the highest audit scores ever given to a DLA contractor and has repeatedly been recognized for service excellence by its customer and others.”

On 12th August however it appears further charges were brought against Agility, an indictment which allegedly accuses the group of “conspiracy to defraud the United States, major fraud against the United States, aiding and abetting major fraud, and wire fraud,” causing the company’s shares to fall on the Kuwaiti Stock Exchange. These charges were apparently levied by the Attorneys Office in Atlanta which had dropped charges earlier this month against an Agility subsidiary, at that time causing the stock to rise as shareholders misread the facts assuming all charges were to be withdrawn. Agility maintains that these are exactly the same as the original charges and remain purely a civil matter.

Despite almost $6 billion in annual revenue and 32,000 employees, the loss of such a prestigious contract, especially in the circumstances surrounding its withdrawal, is bound to affect the company’s credibility adversely and Agility will no doubt wish to see the matters surrounding the US Government’s accusations brought to a speedy conclusion.