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Britain hires US-blacklisted company to sell off army kit

Published time: March 11, 2014 17:04
Edited time: June 27, 2014 08:38
AFP Photo / Dibyangshu Sarkar

AFP Photo / Dibyangshu Sarkar

The UK’s Ministry of Defence has hired a Kuwaiti firm blacklisted by the US government to sell off its leftover equipment in Afghanistan. Agility Logistics landed an army contract to set up desert auctions for gear not valuable enough to take back.

Auctions are held in Camp Bastion in the southeastern Helmand Province, and include Land Rovers, dumper trucks and more obscure items such as a portable laundry – but not weapons or live ammunition. By last October it emerged that some 85,000 items had already been sold.

The cost of the unsold equipment – bringing items back to the UK or renovating them, should they have not been sold – could have totaled as much as $3.3 billion, a cost deemed too high by the UK government.

The MoD issued the contracts to Agility in 2012 despite the fact that in 2009, the company was arraigned by a Grand Jury on suspicion of defrauding the US military. It was alleged that the sum to which they defrauded the government totaled some $60 million.

“As a result of this case, Agility and its subsidiaries have been placed on the US government’s Excluded Parties List. That means they are temporarily suspended from pursuing and performing new US government contracts and task orders,” said a statement released by the company during the case.

US authorities are continuing their case against the company, which had landed the contracts to supply food to US bases in both Iraq and Kuwait. Agility Logistics reportedly manipulated prices, yet continue to deny any fraudulent activity.

While the case began as a private lawsuit, brought against the company as it was trading under its former name, Public Warehousing Company (PWC), the US investigated the initial claims by Kamal Mustafa Al-Sultan – the owner of another Kuwaiti company partnering PWC – and joined the lawsuit after examining the accusations.

“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,”
the Department of Justice said in 2009.

A spokesperson for Britain’s MoD issued a response to the Independent late Monday: “We adhere to strict procurement regulations and all our potential contractors are thoroughly scrutinized. Agility were awarded the contract following an open competition because they scored highest and offered the best value for money. We are aware of the US indictment against their parent company but they have not been convicted and excluding Agility from the tender process would have breached EU procurement regulations,” the ministry said.

Agility vice president Jim Cox told the Independent that “prices” not their “performance” were the reasons why they were picked.

A Financial Times analysis in March 2013 revealed the companies which had profited most from the Iraq invasion. It found that the top 10 contractors reaped some $72 billion worth of business collectively. Agility Logistics specifically landed 10 percent of the final figure with $7.2billion worth of contracts alone.

The paper noted that at times there were more contractors than military personnel on the ground.

UK Prime Minister David Cameron has pledged that no UK troops will remain in Afghanistan in a combat role by the end of 2014.

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