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U.S. Army Awards Iraq Security Work To British Firm

By Alec Klein
Washington Post Staff Writer
Friday, September 14, 2007

The U.S. military confirmed yesterday that it awarded the largest security contract in Iraq to a private British firm, Aegis Defence Services, in a deal worth up to $475 million over two years.

Aegis won the high-stakes derby over six other contenders, said sources who spoke on condition of anonymity because of the confidential nature of the bidding process. The deal, however, is being challenged by another British company that bid on the contract. Erinys Iraq is seeking an injunction from the U.S. Court of Appeals for the Federal Circuit to stop the Army from carrying out the contract. Erinys, which is also planning a separate appeal of the award to Aegis, had unsuccessfully sought to challenge the Army's decision in protests with the Government Accountability Office and the U.S. Court of Federal Claims.

Members of Congress, meanwhile, continue to raise questions about the use of foreign private security forces, such as Aegis, to protect U.S. commanders and soldiers. Federal lawmakers have requested that the GAO look into the use of private security contractors in Iraq. The Special Inspector General for Iraq Reconstruction also is conducting its second audit of Aegis, based on a request from a member of Congress who has expressed concerns about the firm's chief executive, Tim Spicer. He is a retired British military officer whose previous private military company, Sandline International, had been hired to quell insurgencies in countries such as Papua New Guinea and Sierra Leone.

"We are very pleased to receive this award, which we believe is a fine reflection of both our previous performance and our ongoing commitment to serve our client, the U.S. Army Corps of Engineers Gulf Region Division, to the best of our ability," Spicer said in a statement.

Aegis holds the current contract, a three-year deal worth $293 million, to provide intelligence services to the Army and security for the Army Corps of Engineers on reconstruction work in Iraq.

While a military official in Baghdad confirmed Aegis as the contract winner, he did not elaborate; an announcement is expected soon.

It was unclear yesterday why Aegis prevailed over what sources said was the other top contender, another British firm, ArmorGroup International. But over the past several months, sources said Aegis worked to show the military that it had a strong track record, stressing that none of its U.S. military clients had been killed in three years while traveling more than 3 million miles in Iraq. Sources also said Aegis underscored to the military that it made little sense to change contractors by bringing in another private firm to oversee a complicated security operation with offices throughout Iraq just as U.S. forces were seeking to scale back and eventually withdraw from the country.

Aegis was not the lowest bidder, but it was close in price to ArmorGroup's proposal, sources said. ArmorGroup, which is one of the largest security firms in Iraq, with more than 1,200 employees, tried to persuade the military that it was a better choice than Aegis in part by stressing its track record for protecting clients in Iraq, sources said. ArmorGroup spokesman Patrick Toyne-Sewell declined to comment.

ArmorGroup also tried to highlight some of the controversies involving Spicer and Aegis, sources said. After winning the first U.S. Army contract, Aegis quickly ran into problems. A special inspector audit found that the company failed to perform adequate background checks on some Iraqi employees. The company said it had just won the contract and immediately addressed the issue.

Erinys, which has about 1,000 employees in Iraq and provides security for some military personnel there under a separate contract, has maintained that the Army did not thoroughly review its proposal and failed to follow procurement rules. An attorney for Erinys declined to comment.

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