Feeding fighters

While Agility drivers are not themselves armed, the firm does boast its own private security unit, the Threat Management Group (TMG). Working exclusively within Iraq, the 12-team-strong unit is licensed to provide protection to convoys considered to be at risk of attack.

"TMG does some work outside of Agility, but predominantly they're for Agility assets," says Mongeon. "If somebody asks for them and we can do that above our own organic requirements then we do that, but that's not their primary business. Our security is only in relation to our logistics needs - it's another tool in the toolbox."

One of the TMG's key tasks is to ensure DGS is able to execute the Subsistence Prime Vendor (SPV) programme. In June DGS announced that it had been awarded a new SPV contract by the DLA for the supply and distribution of food and non-food products to US forces in Iraq and Kuwait. The total maximum value for the one year contract extension period is $2.8bn - a significant cornerstone of DGS's earnings.

"It's one of our key contracts, and one of the bellweather contracts for DGS," admits Mongeon. However, his task is to ensure that the group's share price is no longer dependent on one or two - albeit huge - contracts.

In January, for example, Agility shares fell more than seven percent on rumours its contract to provide cargo, storage and fuel supply services to the US military in Iraq and Kuwait might be re-tendered.

"We wanted to get that diversification process going so we're not all holding our breath waiting for SPV each year," he says. "Between now and 2011 we're looking to have really shifted the balance of revenue from that contract to a broader portfolio, and this year to date we have over $750m in new business."

SPV is awarded by the DLA, a department within the Department of Defense (DoD) which provides supplies to the military services and supports their acquisition of weapons and other materials.

Mongeon is familiar with the agency, having served as director of operations at the DLA until he officially retired in January 2005. In June 2006 he was appointed president at DGS, enthused by the prospect of leveraging the skills he had learned in the military, into the company.

"I was interested in what Agility was doing because this was the first time the SPV model had been used in a wartime environment," he says. "The concept has been around ten years, it is entrenched, but it had never been used in a wartime environment, which is a different animal."

Of course, the US and its allies have been fighting in Iraq for over five years now, and with no clear sign of an end to the bloodshed, there is likely to remain a US presence in the country for some years to come.

There is no more talk of overwhelming force and 'shock and awe'; Iraq is a conflict of attrition and US troops are relying on the SPV model and its logistics providers, to keep them on the battlefield.

"With the DoD, the orientation today is not towards new weapons systems, it's towards logistics and the sustaining and rebuilding of the force," he says. "When you look at the dollars available, are you going to buy new weapons systems or are you going to sustain the force you have available?"

"As you know, those weapons systems today have been worked very hard, so the reset and the rebuild of that force - predominantly the army - is a major focus," he continues. "It's one of those normal ebbs and flows - during the Reagan era it was all weapons systems and we went into the first Gulf War with literally brand-new weapons systems. Today the focus is on the sustaining of those weapons systems."

We are speaking five days ahead of the US election, and with a new administration will come new pressures on DGS and other firms largely dependent on DoD spending and huge government contracts. And while neither candidate has dared to suggest a cutback in defence spending, Barack Obama has outlined a very different strategy in Iraq, to that of his Republican counterpart.

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