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REGIONAL JOURNALISM, GLOBAL PERSPECTIVE.

Business
Thule Air Base

Losing base

Lawmakers in Copenhagen say that before they allow a new firm to overtake a service contract at Thule Air Base, the foreign minster must explain how the tender was lost
Business
Where did all the jobs go?

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Transferring a contract from one firm to another should be a straight-forward process, reckons Kim Ruberg, the Danish representative for Exelis, a firm specialising in providing services to the defence industry.

“There is a public tender. You abide by the rules. The winner takes over,” Ruberg says. “What else is there to it?”

Lots more, to judge from the reactions of Danish and Greenlandic lawmakers, who say the firm has violated the spirit, and perhaps even the letter, of a 1951 agreement between the US and Denmark that ensures facilities services on Thule Air Base, an American air-force base in far northern Greenland, are carried out by a Danish or Greenlandic firm.

SEE RELATED: They’ve got a friend in Washington

Since 1971 and until September, that job will have been held by Greenland Contractors, a Danish-Greenlandic firm partly owned by Greenland’s Self-Rule Authority. The loss of the tender last October has sparked fears that Greenland will lose both jobs the firm creates and the tax revenue it brings in. That has led to calls for Washington to begin paying to lease the land the base is built on if a solution cannot be found.

Exelis has repeatedly guaranteed that it will continue hiring Greenlanders and paying all appropriate taxes. Those promises have been greeted with scepticism in both Copenhagen and Nuuk, but, Ruberg says, he has trouble understanding why.

“Our goal is to establish a long-term relationship. It states that in our business plan. Saying one thing and then going and doing something else wouldn’t help that.”

SEE RELATED: Fallout

Concern about whether Exelis, which was legally registered in Denmark as an independent company in April 2014, is Danish enough to meet the requirement has dogged the firm ever since it was announced as the winner of the seven-year, $411 million tender.

After a review carried out by the GAO, the US federal government’s accounting office, declared last week that Exelis did meet the tender requirments, the firm announced that it would begin transferring operations on the base ahead of the November hand-over date.

Yesterday, however, a majority in the Danish legislature said that it would seek to put the process on hold once more. They were reacting to the emergence of correspondence between the US embassy in Copenhagen and the Foreign Ministry requesting whether the Danes could verify that the firm’s ownership qualified it take part in the tender.

The Foreign Ministry declined to do so, referring the embassy instead to Erhvervsstyrelsen, the national business agency. The embassy did contact the agency, but only in the form a general request that made no mention of the Thule tender.

SEE RELATED: Starting from scratch

In its answer to the embassy in August, Erhvervsstyrelsen made it clear to Exelis that it did not maintain records of company ownership, and that it was required to declare whether it was a subsidiary of another company. 

It declined to assist the embassy or the firm further, and instead suggested that the Americans hire an attorney or an accountant to help them navigate commercial law.

Given the uncertainty about the approval procedure, the legislature is now prepared to force Martin Lidegaard, the foreign minister, to explain to Washington that mistakes may have been made in the approval process. He will also be asked to request that the process be postponed in order to determine whether Exelis should have been approved to submit a tender.

Lidegaard, defended his ministry’s decision to not to answer the Americans yesterday, telling the media that it did not have the expertise to do so.

“The e-mail correspondence, which I saw for the first time today, is no cause for me to be concerned.”

But perhaps for someone else it may be.