The Olympics Will Be Protected by Aegis: Ay, There’s the Rub

It was announced on Feb. 17 that Aegis Defence Services Ltd., headquaartered in London, won a multiple awardees contract award from the Olympic Delivery Authority to provide security consultancy services( Lot 3. Contract Award Notice No.: 2010/S 33-046942, Contract No.: 9938). No contract amount was specified.

According to the award description Aegis is to provide:

Aegis is a heavyweight in the private security industry, or as it calls itself, a "British security and risk management company." It has been among the biggest ?rms in Iraq, judging by the value of its past contracts.

Back in May 2004 Aegis won a contract, despite a protest by DynCorp, another security firm, valued at a maximum of $293 million over the next three years to provide antiterrorism support and analysis and to serve as a clearinghouse for information between coalition forces in Iraq and security contractors.

Before Aegis was awarded that contract, coordination between the U.S. military and civilian contractors was handled through the Regional Operations Centre (ROC). In June 2005 the Pentagon extended the contract for a second year and expanded it. The new deal was worth about $145 million.

For its money Aegis had to pay a staff of 500 based all over the country, organize the coordination of intelligence from all the security ?rms and the military, and also provide a central emergency hotline, so that if someone is ambushed on the road, there is one number (or radio frequency) he or she can ring for help.

It operated one national and six regional command centers in cities across Iraq. Staff acts as a link between coalition forces and civilian contractors on security issues, passing on information on the activity of insurgents. They provide a daily intelligence service to contractors and track the position of their vehicles.

In addition, Aegis established 75 teams of eight men each to provide security on all major Iraqi government projects following the handover of sovereignty. Back then it was the ?fth-largest contract ever awarded by the CPA, amounting to almost 3 percent of the CPA Program Management Office's entire Iraq reconstruction budget.

As Tim Spicer, cofounder and head of Aegis, said in a BBC interview: "We're currently employing about 500 people. We're not actually responsible for everybody's security, what we're responsible for is the coordination, in a number of civil military operation centres, the coordination of the security of the reconstruction companies and its interface with military operations — the counter-insurgency operations."

The award of this contract struck many observers as odd, as Aegis had no signi?cant experience in Iraq, or the Middle East for that matter, and its expertise was largely limited to antipiracy consulting.

Although Aegis subsequently had its challenges and controversies it did its job well enough that the contract was renewed and has been awarded other contracts. In January it was awarded a contract by the Pentagon to provide Facility Protective Services in East Afghanistan, Shindand.

The Special Inspector General Iraq Reconstruction (SIGIR) issued an audit on January 14, 2009 that found "well-supported contract awards to Aegis; appropriate government oversight of Aegis's bills, inventories, performance, and operations; and contract performance assessed as satisfactory to outstanding." Aegis described the report on its website as "commending Aegis as a reliable, responsible, and cost-effective partner to government."

Aegis did not mention that the SIGIR report also found that contract administration could be improved. Specifically:

Still, Aegis seems a reasonably well run company nowadays. Certainly, far more so than Sandline, the famous private security company founded by Tim Spicer, who founded Aegis. Sandline ceased all operations on April 16, 2004. Aegis started operations the same year.

In 2004 the International Peace Operations Association, a U.S. private military and security trade group, asked Aegis to apply for membership, but the application was rejected by a British competitor. Aegis is a founding member of the British Association of Private Security Companies (BAPSC), a British trade group. It is also a member of the Private Security Company Association of Iraq.

So everything is just great, right? Aegis can help protect athletes and spectators. Well, since we are talking about England let me borrow from Shakespeare's Hamlet, "To sleep: perchance to dream: ay, there's the rub."

Apparently Aegis's work in Iraq wasn't good enough to prevent some friendly fire. One wonders if the Olympic Development Authority was aware that it was Aegis security contractors who shot and permanently disabled U.S. Special Forces sergeant Khadim Alkanani as he returned to Baghdad International Airport after an intelligence mission in June 2005.

In his subsequent law suit Alkanani claimed his shooting was "remarkably similar" to other incidents which employees of Aegis Defense Services have captured on "trophy videos" which showed "senseless shootings of innocent personnel in automobiles from an armed vehicle."

Of course, immediately after the shooting, the Aegis employees apologized for shooting him and his three-vehicle convoy, Alkanani says. They claimed they had mistaken them for suicide bombers — though Alkanani's convoy had been traveling directly behind the contractors and had stopped and showed identification at two checkpoints before the shooting.

The shooting took place within the main gate of Baghdad International airport, where there were no ongoing hostilities nor a credible threat of imminent hostilities, the complaint states.

Alkanani says he received prompt medical treatment for a bullet wound to his right foot, but subsequently developed Hepatitis C and has not regained full use of the foot. The disability ended his military career, resulting in his discharge in September 2006.

On February 8 the U.S. District Court for the District of Colombia granted a summary judgment for Aegis dismissing Alkanani's case.

The reasoning for the dismissal is quite fascinating. The facts were not in dispute. Alkanani was shot by Aegis contractors. Instead, Aegis showed that it did not exist as a corporate entity at the time of the alleged incident.

Judge Richard Roberts reasoning was straightforward. Aegis provided evidence that it simply didn't exist at the time of the alleged shooting (the company was incorporated in the U.S. in 2006). Its parent company, meanwhile, argued that the court didn't have personal jurisdiction.

Evidently while a corporation is liable for the torts of its employees if committed within the scope of employment, corporate liability attaches only upon corporate existence. And, under Delaware law, a limited liability company such as Aegis does not exist until it files a certificate of formation with the Secretary of State.

According to the judgment, Aegis LLC, the U.S. company that is part of the worldwide Aegis Group filed its certificate of formation with the Delaware Secretary of State on May 30, 2006. And Aegis LLC was not a party to the service contract awarded by the U.S. Department of the Army to Aegis UK on May 25, 2004, and Aegis LLC did not provide security services under the contract.

Because Aegis LLC presented undisputed evidence that it was not formed as a corporation until nearly a year after the alleged shooting, the defendant's summary judgment motion was granted.

So is this the end for Alkanani's case? Maybe. After Roberts' judgment, Alkanani's legal team, sent an emergency request for the judge to withdraw them. The contended that the parties had agreed to a Feb. 15 deadline for the opposition motions, and that Roberts had ruled too quickly.

Word of advice to the Olympic Development Authority. You might want to ensure the Aegis unit you signed a contract with is officially incorporated and deemed to legally exist.