Army to Reconsider Bids On Iraq Security Contract
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Saturday, June 9, 2007
The U.S. Army has agreed to reconsider the bids of companies that were eliminated from the competition to win the largest private security contract in Iraq, according to sources familiar with the matter.
One of the companies, the British firm Erinys Iraq, had filed a complaint with the U.S. Court of Federal Claims after being removed as a bidder on the contract, which is worth about $475 million and calls for a private company to provide intelligence services to the Army and security for the Army Corps of Engineers on reconstruction work in Iraq.
Government lawyers outlined the Army's plans to reconsider bids during a closed hearing Thursday on Erinys's complaint, according to officials familiar with the proceedings who spoke on the condition of anonymity because the matter is ongoing.
"Erinys is pleased that the Army has recognized the significant errors in this procurement and has volunteered to take corrective action," an Erinys spokesman said in a written statement. "We look forward to competing for the . . . contract on a level playing field."
Army officials did not respond to requests for an interview. It is unclear how many other companies are affected by the decision. Blackwater USA, a North Carolina firm, also challenged its elimination from the competition. Blackwater officials could not be reached for comment.
The Army's decision could be a setback for what sources said were the two finalists, Aegis Defence Services and ArmorGroup International, both British firms. Aegis has the current contract, a $293 million deal that was to expire in May but was extended as competitors challenge the bidding process. The sources said there is no timetable for the military to reevaluate the bids.
In its complaint, Erinys said the Army required all bidders to obtain business and operating licenses from the Iraqi government before submitting offers but then did not enforce those requirements.
Erinys, which provides security for some military personnel in Iraq under a separate U.S. contract, said it has both licenses. Erinys also said the military failed to communicate with the firm, which would have cleared up confusion about its offer.
