Australia’s long coast is also its border, and they’ve taken an innovative approach to the problem. Unlike, say, the US Coast Guard, Australia has semi-privatized the coastal patrol function, placing contractors under the Customs service. Once intruders are detected, these contractors can then call on pre-arranged support from civil authorities and/or the Royal Australian Navy and Air Force. Contracted services of this nature are becoming more common around the world, but Australia was really breaking new ground when they began Coastwatch on such a large scale in 1995.
Coastwatch was re-competed, and in 2006, Cobham’s subsidiary Surveillance Australia Pty Ltd retained the contract through the A$ 1+ billion next phase, called Project Sentinel. The new contract under Australia’s CMS04 (Civil Maritime Surveillance 04) program has expanded the fleet and addressed some concerns, but there are still areas where Australia lags a bit behind the leading edge. Even so, Coastwatch remain a touchstone program for countries considering a similar path.
Early operations in Afghanistan and Iraq led US combat commanders to ask for transport aircraft that could use smaller runways, and land closer to zones of operations. The US Army pressed its King Air C-12s and Shorts C-23s into service, but beginning in 2004, they began supplementing those efforts with contractors. Helicopters have also been hired, but cost, speed, and carrying capacity all favor fixed-wing planes whenever possible.
The US military hoped that Blackwater affiliate Presidential Airways, Inc. of Moyock, NC would be able to address some of these issues, using EADS-CASA 212 and Bombardier Dash-8 transport aircraft. For a while, they did. Presidential received several contracts over the years for fixed-wing, in-theater contract transport around Afghanistan, but the fixed-wing business was bought by AAR, and their firm is no longer the only option. As of 2010, the USA began spreading fixed-wing contracts among a number of contractors. This article chronicles fixed-wing contracts from 2004 – 2014.
In early 2009, Aria International, Inc. announced a contract from the Royal Thai Army to provide in-country surveillance and communications solutions and services, for an aggregate purchase price of $9.7 million. The RTA surveillance system consists of a manned airship with military-grade imaging and communications systems, an armored Command and Control vehicle, and upgrades to existing communications and facilities to receive real-time surveillance data.
Thailand has the questionable distinction of being saddled with the bloodiest Islamist insurgency most people have never heard of. The American export system that has hindered their order is well known around the world… but it looks like everything has been ironed out. Unfortunately, Thailand hasn’t been able to get much value out of its new asset.
In October 2011, Global Integrated Security (USA), Inc. in Reston, VA won a 4-year, $480 million firm-fixed-price contract from the U.S. Army Corps of Engineers, for Reconstruction Security Support Services throughout Afghanistan. Work will be performed in Afghanistan, with an estimated completion date of Oct 19/15. Five bids were solicited, with 5 bids received by the USACE office in Winchester, VA (W912ER-12-D-0001).
Global Integrated Security has performed RSSS work in Afghanistan before. A $34 million task order in December 2009 focused on Kabul and Kandahar, but a March 2010 contract [PDF] from the US Army Corps of Engineers saw them expand those services to encompass a National Operations Center providing intelligence and analysis, reconnaissance teams, interpreters, aviation services throughout Afghanistan; and “mobile security support services” to USACE personnel during travel to, and presence at, construction sites.
In late August 2011, Dyncorp International, LLC in Falls Church, VA received a $146.6 million cost-plus-fixed-fee contract to help train Afghanistan’s Ministry of the Interior personnel, on behalf of the Combined Security Transition Command – Afghanistan. This has been an ongoing effort in Afghanistan, and DynCorp has been heavily involved throughout. They have been criticized for questionable results in this area, and have obstructed efforts by American commanders to change the focus of past contracts, as events on the ground changed.
Work on this contract will be performed in Afghanistan, with an estimated completion date of Aug 31/14. The bid was solicited through the Internet, with 8 bids received by the U.S. Army Contracting Command at Aberdeen Proving Ground, MD (W91CRB-11-C-0053).
ACS’ cancellation, delay, and restructuring have left the Navy pursuing its own independent program. The US Army’s RC-12N Guardrail electronic intelligence aircraft are being refurbished to keep them current and in service until the ACS arrives. And the RC-7B fleet continues to receive additional help, via a parallel program called MARSS. It’s part of a trend that involves putting private ISR(Intelligence, Surveillance & Reconnaissance) planes on the front lines.
L-3 MPRI, Inc. in Alexandria, VA recently received a $156.1 million cost-plus-fixed-fee contract to embed former law-enforcement professionals into corps, division, brigade, regimental and battalion headquarters. Their mission will involve helping battlefield commanders penetrate and suppress criminal networks involved in IED land mine production, distribution, and use throughout Iraq, Afghanistan, and other overseas operations. The contract will run to Dec 10/11, and 1 bid was solicited with 1 bid received by the U.S. Army Research, Development and Engineering Command Contracting Center at Aberdeen Proving Ground, MD (W91CRB-08-D-0049).
The U.S. Department of State’s Bureau of Diplomatic Security – Worldwide Protective Services (WPS) contract hires armed bodyguards and security for American diplomatic personnel worldwide. That means a combination of personal protective (bodyguard), static guard (facilities and checkpoints), and emergency response security (fan looks hit…) services. It is probably the most lucrative such program on the planet, and as one might expect from its size and nature: the FY 2010 budget request and justification was for $1.65 billion, covering 1,898 personnel.
Fore the US Department of State, the questions ultimately boil down to control and consequences. Do they have it, and do they enforce them? Which is why the latest 5-year, $10 billion multi-award umbrella contract is attracting interest and scrutiny. Under solicitation SAQMMA10R0005 (-a), 8 pre-approved contractors can compete for each award during the base year and up to 4 option years of the contract. Each is guaranteed only $5,000, which would serve as minimal compensation relative to even the cost of bidding. The winning firms include:
Private investment firm Cerberus Capital Management, LP has reached a $1.5 billion deal to buy the support and security contractor DynCorp International, including the assumption of debt. The purchase price would be $17.55 per share – a 49% premium to the April 9/10 close of $11.75, and 12.4x the FY 2010 consensus forecast of $1.41 earnings per share. A “go shop” provision gives DynCorp 28 days to find a higher and better offer, if it can.
Affiliates of Veritas Capital Fund Management, L.L.C. have already executed a Voting Agreement in favor, swinging an aggregate of 34.9% of the outstanding shares. That level of support will make the deal very difficult to stop.
Note that 12.4x is still a low multiple, when compared to a number of more diversified public competitors like KBR and SAIC. Unfortunately, it’s difficult to compare DynCorp with privately-held security contractor peers like the similarly-controversial Xe (formerly Blackwater), IAP Worldwide Services, Triple Canopy, etc. The result is somewhat predictable…
Allegations and legal depositions state that the firm traded booze for weapons, and bought weapons and vehicles on the black market in Iraq between 2003-2004. At least one of those employees have expressed concern that the money used to buy these items may have ended up in the hands of Iraq’s Islamists, who were connected to criminal enterprises in Iraq at a number of different levels.
The article itself turns out to be more balanced than its headline might indicate, and the detailed accusations are linked to detailed responses; both are worth reading. Beginning with the revelation that significant responsibility for this state of affairs traces right back to the US State Department…