Monday, November 23, 2009

Agility Faces Prosecution Over Military Logistics Contracts

Denies Any Wrong-Doing
Shipping News Feature

USA / KUWAIT – Kuwati-based logistics provider Agility has said it is “surprised and disappointed” that the U.S. government has decided to join a lawsuit that has been launched against the company’s owning group, the Public Warehousing Company (PWC), over the prices of foodstuffs provided by the company to the United States military in Iraq and Afghanistan.

The U.S. government has joined the action alleging that PWC overcharged the United States for locally available fresh fruits and for failing to disclose and pass through rebates and discounts it obtained from its U.S.-based suppliers, as was required by its contracts.

Speaking for the American Department of Justice Tony West, Assistant Attorney General for the Civil Division, said that: “We will not tolerate fraudulent practices from those tasked with providing the highest quality support to the men and women who serve in our armed forces.

“Those who do business with the government must act fairly and in accordance with the law. As this case illustrates, the Department of Justice will investigate and pursue allegations of fraud against contractors and subcontractors, whether they are foreign or domestic.”

In a statement Agility said that: “PWC’s service has been timely, reliable and cost effective throughout its work on these competitively awarded contracts, and its performance has been unparalleled.

“The prices it charges have been negotiated with, agreed to, and continually approved as by the U.S. government since then. The government has consistently found PWC’s prices to be fair and reasonable.

“Since 2006, the company’s “fill rates” – the number of cases of food accepted compared with the number ordered – were consistently more than 99 percent, a number that exceeds the fill rates of U.S. domestic service providers.

“That means that PWC was more successful in delivering food and other items to the military in a hostile war zone than other vendors have been within the safe environs of the continental U.S.”

PWC also state that they believe that the original law suit, launched by one Kamal Mustafa Sultan, was an act of vindictiveness from an individual who “…who has a long history of strong animosity towards PWC, its officers and its employees”.

It remains to be seen how this action will impede upon Agility’s existing contracts with the U.S. Military, a major client for the company.