U.S. food delivery contracts in Middle East worth billions
Monday, January 11, 2010
One of the least publicized elements of the cost of the fighting in Afghanistan and Iraq is the need to truck into Iraq and landlocked Afghanistan almost all the perishable and non-perishable food items consumed by U.S. forces and civilian personnel.
The Defense Logistics Agency is preparing to contract out delivery of more than $10 billion worth of food to U.S. troops and other government personnel serving in Iraq, Afghanistan, Kuwait and Jordan. The solicitation is broken into two contracts -- one for Afghanistan for five years and another for Iraq, Kuwait and Jordan for four years.
The list of items is extensive. The prime vendor, according to the bid solicitation, "must be capable of supplying all chilled products, semi-perishable food stuffs, frozen fish, meat and poultry, other frozen foods (fruits, vegetables, prepared foods, etc.), dairy and ice cream products, fresh and frozen bakery products, beverage base & juices (for dispensers), beverages & juices (nondispenser), fresh fruits and vegetables, non-food items."
In addition, the vendor will deliver government-furnished food products such as "Unitized Group Rations, Meals Ready to Eat, Health and Comfort packs and other operational rations items (either currently in existence or to be introduced during the term of this award)."
Some of the fresh food can be obtained locally, but much of it must come from the United States, according to the contract. Seventy-seven firms, in the United States and in the region, indicated interest in bidding on the Iraq, Kuwait and Jordan contract. The winner is expected to be named this spring.
A major element in the cost for these contracts is that the winning firms must pay for private security services that supply guards to their shipments.
The four-year contract proposal covering food supplies to be delivered beginning in 2011 to Iraq, Kuwait and Jordan, which could amount to $6.4 billion, warns bidders: "Travel in Iraq remains very dangerous. Various forms of terrorist and criminal elements remain active. Military operations continue. Attacks against military and civilian targets, including military convoys throughout Iraq continue."
The contract proposal reads, "The prime vendor bears all risk and responsibility for personal injury or death of its employees or agents or subcontractor employees or agents or for any damage to, loss of or demurrage of equipment during the transportation of product into Iraq."
The Kuwait-based Public Warehousing Company/Agility, which has had the Iraq contract from 2003 through this year, has said 30 of its employees have been killed, 200 injured, 300 trucks destroyed and 700 more damaged over the past six years.
In December 2008, Agility's chief operating officer, retired Maj. Gen. Dan Mongeon, told Defense News he has hired security units from his company's Threat Management Group to provide guards for their own trucks. With about 700 to 1,200 trucks moving every day on roads to and from Iraq, Mongeon said, "It was only in our best interest to have this kind of capability."
However, Mongeon's company has been barred from bidding on renewal of the new Iraq contract, or any other government contract, after its indictment in November by a federal grand jury in Atlanta for allegedly overcharging on prices delivered under this contract. Public Warehousing Company/Agility has denied the charges.
Negotiations between the company and Justice Department to settle the matter have been tied up because, according to a government official, Agility so far "has refused to recognize the jurisdiction of the U.S. District Court." A hearing is scheduled for Jan. 29 in Atlanta.
The solicitation for the prime vendor contract to supply food for the Afghanistan area for the five years beginning in 2011 is in a preliminary phase. The Defense Logistics Agency (DLA) is seeking the names of firms interested in bidding on the contract, which will be put up in March. So far, 24 have shown interest in the Afghanistan contract, a job that could involve shipping nearly $800 million in provisions a year, according to DLA.
The current contractor, Supreme Foodservice, was founded in 1957 by a former U.S. Army food-service soldier and first focused on supplying military facilities in postwar West Germany. In the 1970s, it expanded to serve military forces internationally, "particularly in unsettled regions and areas with limited infrastructure," according to the company's Web site.
It began some operations in Afghanistan in 2002, and won the vendor contract in 2005.
"Supreme has used a combination of ground, helicopter, and air transportation to more than 65 military sites to ensure mission success," according to an award citation presented to the company in 2007.