Deal or no deal – Feds up the ante in case against PWC/Agility(with link to indictment)
New defendants in Kuwaiti military contractor indictment
By Bill Rankin
The Atlanta Journal-Constitution
Monday, April 12, 2010
Federal prosecutors have obtained a new indictment charging a Kuwaiti firm and two of its affiliates of defrauding the U.S. military on billion-dollar supply contracts.
The indictment, which remains under seal, was disclosed during a hearing Monday in U.S. District Court in Atlanta. Public Warehousing Co., now known as Agility, had previously been indicted on charges it gouged the Defense Department by overcharging food supplies being delivered to U.S. troops in Iraq, Kuwait and Jordan. The new indictment also names Agility DGS Logistics Services Co. KSCC and Agility DGS Holdings Inc.
Lawyers for the companies asked U.S. Magistrate Alan Baverman to keep the new indictment sealed for seven days, saying it might help settlement negotiations. Assistant U.S. Attorney Barbara Nelan disagreed, saying that unsealing the new charges “may be helpful” to the parties’ attempts to reach a settlement.
The Atlanta Journal-Constitution previously reported that parties in the case had been negotiating a possible settlement that could reach $750 million. Since the indictment, the Defense Logistics Agency, which provides supplies to U.S. armed forces worldwide, has barred Agility and 100 of its affiliates from receiving new contracts from the government pending the outcome of the Atlanta case.
Agility has long maintained federal prosecutors did not properly serve the company with the indictment. At Monday’s hearing, only a lawyer for Agility DGS Holdings entered a not guilty plea. Lawyers for Agility and Agility DGS Logistics Services declined, so Baverman entered not guilty pleas for them.
“The decision by the U.S. Attorney’s office in Atlanta is regrettable,” the company said in a statement issued after Monday’s hearing. “This move serves only to taint PWC subsidiaries that have a strong record of on-the-job performance and compliance with U.S. law and federal acquisition regulations.” (Click HERE for original article)
Monday, April 12th 2010 at 11:37 am |
Ah, the USG is playing hard ball. I love it! It just keeps getting worse for Agility the longer they ignore the NOV 7 indictments. Seven I tell you! Stick that in your sheesha pipe and smoke it Tarek Sultan!
Monday, April 12th 2010 at 11:53 am |
According to Business Week, Agility has released the following statement regarding today’s extended indictments:
The extended indictment is “regrettable,” Agility said in a statement today. The company said it has asked the court to determine whether it was properly served with the summons of the indictment.
“The company intends to defend itself vigorously if this matter properly goes to court,” the company said.
Monday, April 12th 2010 at 12:16 pm |
Since Dyncorp was the parent company and Agility was the sub-contractor why is Agility the only one to take a hit?
Just curious because the prime is usually liable for the actions of the sub-contract companies. Explain if you know. Thanks.
Monday, April 12th 2010 at 12:33 pm |
That would be because Dyncorp had nothing to do with the SPV Contract.
The contract was awarded to PWC Logistics which later changed their name to Agility Logistics. They are not a subcontractor to anyone on this contract.
This is not a LOGCAP Contract.
Monday, April 12th 2010 at 5:00 pm |
I was confusing this with something else I read:
http://195.11.6.104/InvestorRelations/Pages/AgilityclarifiesLOGCAPIVcontract.aspx
Monday, April 12th 2010 at 4:39 pm |
If I were other PVs worldwide – I’d be back checking my books within the statute of limitations to see how I could post-fix the same “acceptable business practices” that were going on before PWC/Agility entered the contracting fray – one might be quite surprised at what one would find…of course…why is it necessary for DSCP to add 13% to a contract to push paper around – when the same is done in commercial trade for as little as 3%….hmmmm … can you say “hypocrites”…
Tuesday, April 13th 2010 at 2:26 am |
Another limit-down day for Agility stock on the Kuwait Stock Exchange. The USG’s newly revised indictment may be simple legal wrangling, but I find it highly doubtful the USG would have gone to all the time and expense to add two more Agility companies to the indictment list unless they believed the settlement far fetched. Tarek Sultan’s comments suggest he’s now focusing on commercial ventures and justifying the decision based on the troop drawdown and the economic downturn. This may be legal wranglings as well.
Anyone with insight as to the expected PV award date? The USG may be holding off on the award to attempt to use it as leverage over Agility. The current PV contract expires at the end of 2010, but they could always T4C. I guess the USG is in no hurry and may wait until June to let the court case play out.
Your thoughts?
Tuesday, April 13th 2010 at 11:45 am |
I downloaded the indictment, which was unsealed yesterday. It’s a superseding indictment which looks pretty similar to the one handed down in November, except it now includes two Agility subsidiaries:
http://www.contractormisconduct.org/ass/contractors/62/cases/1057/1711/agility-food-contracts_supindict.pdf
Tuesday, April 13th 2010 at 12:41 pm |
Thanks Neil!! POGO rocks!
Wednesday, April 14th 2010 at 6:58 am |
Yes – the superceding indictment is a technical maneuver to pull in Agility’s US entity since they were claiming the Kuwait side had never been properly served. Some are speculating the entire “settlement talk” was to string things out and get a better number (lower) or for other purposes (of which I will not speculate).
Tuesday, April 13th 2010 at 6:20 pm |
It is a shame that the damages within the indictment comprise only a fraction of what the relationship cost the US. Their keeping preferred vendors exluded many who would have been most willing to have large volume supply with much lower prices.
Wednesday, April 14th 2010 at 7:10 am |
There are many problems with the system. First – the contracts for OCONUS business don’t reflect the different financial logistics for international commercial transactions – and the fact that any supplier to an off-shore PV is haning it “out there” when selling to them. So – many “cover” through insurance and potentially higher prices (some driven by using subcontractors who assume the financial risk that corp folks can’t). If the government would gaurantee the risk of an open account transaction between commercial parties (within reason) – prices could be much better if companies did not have to cover the risk…..there is so much more where they could be savings…such as in ocean transportation – but that is another story…
Wednesday, April 14th 2010 at 7:17 am |
To add to this – DSCP has already proven it will do the Vegas dealer “I’m clear and out” routine – ask anyone that knows Prime Vendor history (if they really do) about how many vendors were stuck when Pacific World went “tango uniform” in Guam…the response to vendors owed 6-figures was – “that was a commercial transaction and we have no liability”. Funny how the outlook changes when they think they are missing out on what they think is rightfully theres…as in $$$$$$$$$$$$$$$$$$
Tuesday, April 13th 2010 at 10:36 pm |
I can confirm Paul Cerjan DGS Head Agility is leaving Kuwait this month – very, very shortly.
DGS dead – dead – dead.
He held a garage sale as he was leaving. He was charging 30usd for a twist up alarm clock. Does he think I was Uncle Sam or what?
large contract would have a 6 month hand off period (june-nov) with may announcemnt date
Tuesday, April 13th 2010 at 10:37 pm |
just kidding about the garage sale
Thursday, April 15th 2010 at 5:12 am |
RELIABLY, Agility did not get the PV contract. Now lets see Sysco and US Foodservice lose their contracts for similar reasons!
Thursday, April 15th 2010 at 12:02 pm |
The entire system needs a flush and re-organization – including the numbskulls at DSCP that can’t find their “six” in a round room with a 12 man search party and collect 13% on the Agility contract….for what…? Certainly competent contracting…You can bet a lot of PVs have been rushing to tidy up their records – but a deep will show that until a system outlined that recognizes the differences in the OCONUS business versus the CONUS – the it’s still a “joe biden” situation..
Thursday, April 15th 2010 at 7:45 am |
It’s official, Anham has been awarded the new Subsistence Prime vendor contract. So sorry Agility….:) DGS is doomed for sure now!
In reference to the DDKS contract only, yes, the new RFP timeline reflects that Agility may be extended for another 6 months (thru Feb’11). If the new awardee is prepared before then the USG could T4C.
Monday, April 19th 2010 at 10:20 am |
Since Dyncorp was the parent company and Agility was the sub-contractor why is Agility the only one to take a hit?
Just curious because the prime is usually liable for the actions of the sub-contract companies. Explain if you know. Thanks.
Sunday, July 18th 2010 at 8:51 am |
why do people do such things?