Dyncorp seeks to overturn Iraq security contract

Financial Times (London, England)
July 22, 2004 Thursday

HEADLINE: Dyncorp seeks to overturn Iraq security contract: Dispute over award 
to company headed by controversial former British army officer. Jimmy Burns 
andThomas Catan report

BYLINE: By JIMMY BURNS and THOMAS CATAN

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.

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