Feral Jundi

Saturday, December 18, 2010

Industry Talk: USTC Holdings Buys Xe Services For Estimated $200 Million

     This post by AM Law Daily had everything that I thought was pertinent to the story.  So Xe has finally been sold, and for an estimated 200 million dollars.

     I think what is really interesting with this acquisition is all the national security related stuff that goes along with buying a company like this.  When you buy Xe, you are buying all the really complex and sensitive government contracts they are involved with.  And like the article below pointed out, Michael Chertoff’s company (former Homeland Security Secretary) was heavily involved in making sure this was done correctly.

     So what will USTC Holdings do with Xe, now that they bought it?  Good question, but I am sure you won’t see a lot of change right off the get go. Matter of fact, you probably won’t see anything new with the company, other than it just having new owners. –Matt

Bingham, Mayer Brown Advising on Sale of Blackwater/Xe Services to Private Equity Group

December 17, 2010

By Brian Baxter

Xe Services, the private military contractor formerly known as Blackwater Worldwide, announced on Friday that it had been sold to a group of private equity investors with ties to company founder Erik Prince.

Terms of the transaction were not disclosed, but The New York Times puts the value of the deal at around $200 million. USTC Holdings, the investment group taking control of Xe, said in a statement that the deal includes all Xe companies that provide domestic and international security services, including the target’s training facility in Moyock, N.C.

Bloomberg reports that USTC is comprised of private equity firms Manhattan Partners and Forté Capital Advisors, whose managing partner, Jason DeYonker, has close ties to the Prince family. (Aaron Kanter serves as Forté’s chief compliance officer and in-house counsel.)

(more…)

Friday, December 17, 2010

Industry Talk: Army To Award 1.6 Billion Dollar Training Contract For Afghanistan Before New Year

     Wow, this contract is a big one. Also, thanks to Danger Room for posting an update on this contract. In the past I posted a deal about the transition of this contract from CIVPOL to CNTPO, and how DynCorp got edged out of the party when they were excluded under the new program. Then they protested and won the right to be a vendor, and this is where we are at now. It is a battle of the titans for a huge training contract.

     This is also important to the war effort because as I have reported in the past, NATO tends to make promises it cannot keep.  There are 900 training positions still open because of this lack of commitment. That is not good, and especially if the war strategy is highly dependent on getting the Afghan forces to a size and level of competency where they can take over the security of their country. Yet again, it will be contractors picking up the slack as NATO falters. –Matt

Edit: 12/21/2010- Here is the latest with this contract.  DynCorp just got hooked up. Here is the quote:

“Danger Room has confirmed that DynCorp, one of the leading private-security firms, has held on to a contract with the Army worth up to $1 billion for training Afghanistan’s police over the next three years. With corruption, incompetence and illiteracy within the police force a persistent obstacle to turning over security responsibilities to the cops by 2014, NATO has revamped much of its training efforts — except, apparently, the contractors paid lavishly to help them out.

The details: DynCorp will provide security personnel to train the Afghan cops at 14 different locations across the country. Those trainers will support the NATO training command run out of Kabul by Lt. Gen. William Caldwell in getting the police into an “independently functioning entity capable of providing for the national security of Afghanistan,” the Army’s Research Development and Engineering Command says in the award. The contract runs for two years and earns DynCorp $718.1 million, but an option to re-up for a third year brings the total price to $1.04 billion.”

Quote From Danger Room:

“Before the New Year, the Army will finally award a much-delayed $1.6 billion-with-a-b contract for a private security firm to supplement that NATO training command’s efforts to professionalize Afghan cops. That bid touched off a bureaucratic tempest between Blackwater/Xe Services and DynCorp, which held an old contract for the same job, as well as the State Department and the Army.

But not for much longer. The Army’s Contracting Command is in “the very final stages” of selecting the firm for the bid, Col. John Ferrari of the NATO training command tells Danger Room. “We’re expecting an announcement before the end of December, sometime in the next week or two.”

The contract is for “mentoring, training, and logistics services” to backstop Ferrari’s efforts, placing security contractors in embedded positions with the Afghan interior ministry and police units themselves, according to the terms of the bid. More than 80 firms have registered as “interested vendors” on the federal website announcing the contract. NATO is trying to build a 134,000-strong Afghan police force by October, and it’s short 900 trainers promised by U.S. allies.”

——————————————————————

R–NATO Training Mission Afghanistan/Combined Security Transition Command Afghanistan (NTM-A/CSTC-A) Afghanistan Ministry of Interior (MoI) & Afghan National Police (ANP) Support Requirement

Solicitation Number: W91CRB10R0059

Agency: Department of the Army

Office: Army Contracting Command

Location: RDECOM Contracting Center – Aberdeen (RDECOM-CC)

Tuesday, December 14, 2010

Legal News: Charges Dismissed Against Nicholas Moody In UAE Weapons Case!

    Excellent news and thanks to everyone out there that applied the necessary pressure on our US Embassy in the UAE, and for your support in this case. This will certainly be a wonderful holiday gift to Nicholas and his friends and family. –Matt

Charges dismissed against American in UAE weapons case

December 14, 2010

The charges against an American soldier who had been detained for more than two months in the United Arab Emirates have been dismissed, authorities said.

Cpl. Nicholas Moody, from Nevada, was arrested September 29 during an 18-hour layover in Abu Dhabi while heading back from his job as a private security contractor in Iraq.

Moody was charged with possession of weapons accessories — parts that could accompany a gun, though no firearm itself — which is illegal in the UAE.

Charges against Moody, were dismissed Monday said Melhem Sharrouf, one of Moody’s attorneys.

Moody, who has served in Iraq and then Afghanistan as part of the California and then Nevada National guards, had been released from jail on bail, but it was uncertain when he would be allowed to leave the United Arab Emirates.

Moody’s visa expired while he was in jail and his passport was being held by the government, his attorneys said. He would need to renew his visa before he could leave.

Those who created a support website on Facebook rejoiced about the development in the case. More than 2,500 people have expressed support to the “Help Bring Nick Moody Back Home” site on Facebook.

“NICK’S CASE WAS DISMISSED!!!!!!!!!! The paperwork will take a couple days, then travel arrangements will be made for Nick to come home! THANK YOU EVERYONE FOR THE LOVE, LETTERS, SUPPORT, PRAYERS AND POSITIVE ENERGY!” the site said.

(more…)

Monday, December 13, 2010

PMC 2.0: The Army Wants To Give It’s Soldiers Free Smart Phones

    You know what would really be cool is if companies handed out free smart phones when you signed a contract? I would classify it as a piece of kit as important as a rifle or radio that would be issued.  Because as you read through all the reasons why the Army wants to give their soldiers smart phones, then you can see why something like this would be important for companies to think about doing. Especially if they want to share the battle space with the military.

    Also, contractors already deploy with smart phones.  I take an iPhone 3GS with me when I go on contract, and it is indispensable.  Most contractors you work with now a days have these phones as well and take them out on gigs. This is nothing new and I have talked about this in the past.  It’s just now you see the military recognizing the smart phone’s utility and potential, and they are the ones leading the charge of incorporating them into their operations. Good on them.

    Another idea for companies is to develop applications that contractors can download for a contract. For example, DynCorp could have a DynCorp application that could serve as a portal for employees to access their intranet, all from a mobile phone.  DynCorp could send out alerts to their employees and contractors through this application, and people could call or write back to the company with these devices.  For travel arrangements or time sheets, this could also be done on the mobile phone through a really easy to use and understand company application.  For secure communications, they could integrate Hushmail or something similar on their company application and the possibilities are endless.

    The military could benefit from the companies having contractors armed with smart phones as well.  An application could be set up for a specific Area of Operation in a war, and all companies would require that their contractors download that app on their phone.  It could be set up as a secure means for the military and contractors to communicate with each other, and establish unity of effort through the real time exchange of information.  Smart phones could be that thing that could connect private industry with the military in a war zone.

     Apps like this could lead to more enemy killed, less fratricide incidents, and real time information exchanges that could assist in local COIN efforts. Contractors are a HUMINT resource that could really be exploited via smart phones and their applications.

     A contractor AO specific app could also have the rules for the use of force (RUF) that could be constantly updated by the military in that AO, or that RUF could be sent to them by the company via a company app. Unity of effort all the way and as long as the military has a network established out there, companies could be brought into that as well.

    The other thing that would be interesting with a company app or a company issued smart phone, is security.  If you want your employees/contractors using these devices, they have to be secure.  By channeling everyone through an app, a protected remote browser or company issued phone, a company information technology security team or contracted security team could stand a better chance of protecting the system.  Because once you have have established a connection between the contractor and company, there will always be some group or person out there that will want to sabotage it or try to hack into it.

     That last part is very important to remember, and there are numerous folks out there that are making it very easy for anyone to be a hacker.  Easy to use programs like Firesheep, that allow folks to break into other people’s computers or phones via wifi are just one example of what I am talking about. (thanks to DVM for that story)  As the military or companies delve further into integrating smart phones into their organizations, their phone and computer security personnel will be vital to the safeguarding of their operations. But the benefits still outweigh the negatives with this technology, and this is where the military (and private industry) is going. –Matt

Army sees smart phones playing important role

The service also views smart phone as a ‘force multiplier’ — and it wants to give you a free one

By Joe Gould and Michael Hoffman

Sunday Dec 12, 2010

The Army wants to issue every soldier an iPhone or Android cell phone — it could be a soldier’s choice.

And to top it off, the Army wants to pay your monthly phone bill.

To most soldiers, it sounds almost too good to be true, but it’s real, said Lt. Gen. Michael Vane, director of the Army Capabilities Integration Center. He said the Army would issue these smart phones just like any other piece of equipment a soldier receives.

“One of the options potentially is to make it a piece of equipment in a soldier’s clothing bag,” Vane said.

With the backing of officials such as Vane, efforts are underway around the Army to harness smart phones to revolutionize the way the service trains and fights.

Army-issued smart phones are already in the schoolhouse and garrison, in the hands of some students at Fort Leonard Wood, Mo.; Fort Lee, Va.; and at Fort Sill, Okla., under an Army program called Connecting Soldiers to Digital Applications. CSDA’s next step, already underway at Fort Bliss, Texas, is testing for the war zone.

In February, the Army plans to begin fielding phones, network equipment and applications to the first Army brigade to be modernized under the brigade combat team modernization program. That test will not be limited to smart phones but will include any electronic devices that may be useful to troops.

(more…)

Saturday, December 11, 2010

Cool Stuff: Principal-Agent Theory

     I wanted to do a quick post on a little bit of knowledge that everyone would be wise to study.  If you want to know why contractors are paid as much as they are paid then definitely wrap your brain around the concept of Principal-Agent Theory and what it all means. It all boils down to ‘ensuring the provision of appropriate incentives so agents act in the way principals wish’.

    By the way, I picked up on this thing while reading a paper that David Isenberg commented on in a blog post. The paper was about Security Sector Reform (SSR) and the author mentioned Principal-Agent Theory towards the end of it. The author did a study on DynCorp/PAE’s SSR mission for DoS in Liberia, and it was an interesting read. Check it out. –Matt

     In political science and economics, the problem of motivating a party to act on behalf of another is known as ‘the principal–agent problem’. The principal–agent problem arises when a principal compensates an agent for performing certain acts that are useful to the principal and costly to the agent, and where there are elements of the performance that are costly to observe. This is the case to some extent for all contracts that are written in a world of information asymmetry, uncertainty and risk.

     Here, principals do not know enough about whether (or to what extent) a contract has been satisfied. The solution to this information problem — closely related to the moral hazard problem — is to ensure the provision of appropriate incentives so agents act in the way principals wish.

     In terms of game theory, it involves changing the rules of the game so that the self-interested rational choices of the agent coincide with what the principal desires. Even in the limited arena of employment contracts, the difficulty of doing this in practice is reflected in a multitude of compensation mechanisms (‘the carrot’) and supervisory schemes (‘the stick’), as well as in critique of such mechanisms as e.g., Deming (1986) expresses in his Seven Deadly Diseases of management. A distinct and relatively new meaning of the principal–agent problem describes the landlord-tenant relationship as a barrier to energy savings.

     This use of the term is described below in the section on the principal–agent problem in energy efficiency. The problem is also discussed in terms of “agency theory”.

Wikipedia for Principal-Agent Theory here.

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