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US Navy Suspends Business With Second Husbanding Company

Nov. 27, 2013 - 08:20PM   |  
By SAM FELLMAN   |   Comments
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The US Navy suspended $243 million in contracts with its primary port services firm for the Middle East on Tuesday after evidence of over-charging was uncovered, potentially complicating port visits across the region.

Inchcape Shipping Services Holding Ltd. is the second leading husbanding firm to be suspended since federal prosecutors charged the head of a prominent Asian port services company two months ago with bribing naval officers to feed him classified ship schedules and to steer ships to ports where he could overcharge the service.

Inchcape, the primary husbanding firm for Bahrain-based 5th Fleet, has been suspended from government contracts after investigators found evidence “indicating questionable business integrity,” said Rear Adm. John Kirby, the Navy’s top spokesman, in a news release late Wednesday.

“This decision has been taken against the company itself and there are no indications right now that naval officers are involved,” Kirby said in a phone interview. “We’re working with the fleet to ascertain what, if any, affect there will be on future port visits.”

While investigations remain ongoing, Kirby said he was unable to disclose any more details about the alleged malfeasance by Inchcape. But he said the temporary contract suspension was not connected to the investigation of Glenn Defense Marine Asia and its chief executive, Leonard Francis. Earlier in November, the Navy severed nearly $200 million in contracts with GDMA while Francis and one of his executives face bribery charges.

“This has no connection to, it is not connected at all, to Glenn Defense Marine,” said Kirby, who declined to say how the allegations against Inchcape had come to light.

Another Navy official familiar with the report said Inchcape had failed to report “credible evidence of significant overpayment on a contract.”

It is an abrupt turnaround for Inchcape, a venerable maritime firm that has more than 300 offices worldwide. It’s 5th Fleet services contract was valued at $195 million through January. The company also received a $36 million contract for services at seven US Africa Command detachments and has provided pierside support for the first overseas deployment of littoral combat ship Freedom, when it has berthed at Changi Naval Base in Singapore.

An Inchcape spokeswoman did not immediately respond to a request for comment Wednesday.

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