August 16th, 2011
03:37 PM ET

A $17.6 million foray into espionage for former Blackwater contractor

by CNN's Executive Producer Suzanne Kelly

Under a new $17.6 million deal announced today, the contractor formerly known as Blackwater (and later re-branded USTC Holdings under its new owner consortium) is on a new mission. The company has been awarded a task order by the Department of Defense to provide "All-Source Intelligence Analyst support and material procurement for U.S. and Coalition Forces in Afghanistan." What does that mean? Basically, the company will provide contractors to the U.S. government who will collect and analyze information in Afghanistan in both "public and restricted domains." In other words, USTC is branching out into the spy business.

Think Military Intelligence meets CSI. Not only does this specific Department of Defense contract focus on combining intelligence skills with criminal investigative abilities, but it also allows the company to create products that can help detect narcoterrorist activities. For instance, need a new computer or specially-equipped vehicle to help you do the job? Gotcha covered.

In reality, $17.6 million isn't a huge contract, but it's a boost for a company working hard to come out of the shadow of its previous owner, Erik Prince. Under the name Blackwater, the company built and developed by the former Navy SEAL drew negative headlines in large part because of the behavior of some of its employees. A deadly shooting at an Iraqi traffic circle in 2007 prompted a crisis for the U.S. State Department, which couldn't operate effectively in the country without Blackwater's support. The company was the main provider of protective (and heavily armed) security personnel who protected diplomats and others associated with the reconstruction effort. But the killing of Iraqi civilians that day helped push the company to the brink and Prince, who once planned to turn the empire over to his sons, instead put the company up for sale.

This latest contract is not only an important step toward overcoming a once-harsh (at best) reputation, but it's also an important step toward proving it can bring new business.
And the company knows it.

"Upon acquiring Xe and its core operating businesses last year, USTC Holdings, LLC indicated its desire to rebuild the company, now totally divested of its previous leadership, into a new entity with enhanced governance, leadership, accountability and transparency." read a company statement issued today.

“While we are best known for our security and training services, this Task Order recognizes USTC’s ability to provide outstanding all-source intelligence expertise in support of our clients’ missions,” said Ted Wright, the new Chief Executive Officer of Xe Services. (Xe operates under USTC.)

The company provides both domestic and international training as well as security and logistics services to government clients that include the Departments of State and Defense, the U.S. Navy, and local law enforcement agencies. They still protect covert CIA teams operating around the world as well.

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