by David Phinney
Monday April 29th 2024

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Private Security Contract Gone Sour

The genesis of the strike by Global Security that shut down Baghdad International Airport for two days likely can be found in a contract originally inked by the Coalition Provisional Authority.
The idea was that it would be paid for by revenues from Iraqi oil revenues (the Development Fund for Iraq) under control of the CPA, but when that short-lived provisional government disbanded, the contract was then forked over to the Iraqi’s for payment, and presumably, management of the deal.
Iraqis soon began complaining about the CPA’s handiwork, echoing similar problems that have been extensively noted by investigations of other CPA contracts — lack of documentation, sloppy record-keeping, etc., etc.
Payment disputes between the Iraqis and Global Security began early this year. Other contractors also found themselves between Iraq and a hard place when it came to getting paid as laid out in this April story I penned.
For the sake of history, here’s the March 15 US Embassy’s statement on the Global Risk dispute and other contract quarrels already coming to a boil and which the embassy was actively struggling to resolve — apparently, unsuccessfully:

STATEMENT BY THE U.S. EMBASSY IN BAGHDAD RELEASED MARCH 15:
As the Iraqi people create a government structure out of the ruins of Saddam Hussein’s regime, it is not unexpected that there would be payment delays and occasional disagreements about who in the Iraqi government is responsible for, and has the funds to pay, particular contracts, many of which predate Iraqi sovereignty. The fact is that patient firms have been rewarded in Iraq; contract obligations are honored.
The United States Embassy has been coordinating closely with other coalition partners, the involved Iraqi ministries, and the companies themselves to amicably resolve contract payments that are in arrears. Just in the last four days an Embassy representative has personally spoken to representatives of A.P. Moeller Maersk, Global Security, Olive Security and Raytheon, among other companies, on these matters. In January, and again in March our assistance helped secure a back payment for Global Security. We have also worked with several Iraqi ministries to secure a Letter of Credit for payments the Transportation Ministry agrees are owed to Raytheon, and we will remain involved until the monies are paid.
The original contracts of Maersk, Olive Security and Global Security expire shortly. All three firms are bidding for long-term contracts directly with the sovereign Iraqi government. Through these bids these firms have demonstrated an interest in continuing to work in Iraq; their bids express a vote of confidence in the commitment and capability of the Iraqi government to deal fairly with international companies which are helping Iraqis rebuild their country. This statement is attributable to a U.S. Embassy spokeswoman.

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