Blacklisted contractor continues receiving government money through Haiti contracts


Agility has been barred from receiving government contracts since November 2009, when a federal grand jury indicted the company for overcharging the U.S. military on $8 billion in contracts to supply food for troops in Iraq, Kuwait and Jordan. Agility was accused of “intentionally failing to purchase less expensive food items, knowingly manipulating and inflating prices, and receiving product rebates and discounts that it did not pass on to the government as required.” The prospect of additional charges still exists.

In November 2009 Agility was added to the U.S.’s Excluded Party List System (EPLS), which prevents them from procuring contracts from any government agency. The EPLS designation has been extended to over 125 related organizations as the investigation has continued; all of them have been indefinitely barred.

Despite the blacklist designation Agility was able to secure government funding for work in Haiti through a joint venture. An analysis of the Federal Procurement Data System shows that Contingency Response Services LLC (CRS) has received over $16 million in government funding from the Department of the Navy since the earthquake.  The particularly bland sounding Contingency Response Services consists of three defense contractor giants -- Dyncorp, Parsons and Agility Logistics (then PWC logistics).

A Securities and Exchange Commission (SEC) S-4 filing from April of 2011 sheds some light on the joint venture. The document notes that DynCorp owns 45 percent of CRS and explains that, “CRS is a joint venture formed in March 2006 with two other partners for the purpose of procuring government contracts with the U.S. Navy.”

And procure contracts from the Navy they did. In 2006 CRS received an indefinite quantity contract (IQC) from the Navy worth up to $450 million, allowing them to receive funds for various tasks for a period of five years. Although the inclusion on the EPLS did not cancel existing contracts, CRS was able to take advantage of the old contract to receive new funding for their work in Haiti. The funds received were for a variety of tasks, relating to debris removal, “logistical support services”, and engineering and planning camps for the military.

It has been nearly two years since the earthquake in Haiti and the military’s role in relief efforts has been replaced by other U.S. agencies, predominantly USAID. But this doesn’t mean contractor abuse, fraud and waste is a thing of the past. During her confirmation hearing, Hillary Clinton stated: “we know, obviously, of the security contractors and some of the difficulties that they have presented, but it's been contractors across the board.” Clinton also noted that USAID has “turned into more of a contracting agency than an operational agency with the ability to deliver.”

In Haiti, for-profit development contractors have been some of the largest recipients of U.S. aid, yet agencies lack the staff and resources to supervise adequately this vast network which is relied upon for critical development work. With billions already spent, and more to come, increased oversight and accountability in Haiti will be an essential part of any successful relief and reconstruction effort.

Johnston is a lead researcher at Center for Economic and Policy Research and a principle blogger for the center’s “Haiti Relief and Reconstruction Watch” blog.

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