Security firms at odds on contract : Dispute stems from Port Isabel Center

February 4, 2019

BROWNSVILLE — Two private security companies are in a bitter contract dispute over the Port Isabel Detention Center.

Asset Protection & Security Services, which is subcontracted by AhtnaSTS to provide security service at the immigration detention center, sued AhtnaSTS on Jan. 22, alleging the company is wrongfully terminating its subcontract in a retaliatory measure.

AhtnaSTS, however, alleges that it is terminating Asset’s subcontract because it believes that company violated local, state and federal laws by not paying health-and-welfare benefits to probationary employees.

At the time of the initial filing, the majority of the wording in the lawsuit was redacted, but on Jan. 28, AhtnaSTS moved the litigation to federal court and attached unredacted exhibits to the lawsuit that detailed the bitter contract dispute between the two companies which compete for government contracts to run private immigration detention centers across the country.

Asset is currently operating the Port Isabel Detention Center after 357th state District Judge Juan A. Magallanes granted a temporary restraining order preventing AhtnaSTS from terminating the contract.

In its latest federal filing, Asset said it is unknown whether AhtnaSTS can operate the detention center if it terminates Asset from the contract.

“ If the subcontract is terminated, it is unknown whether AhtnaSTS will be able to ensure that business can be conducted as usual and such that necessary activities at the Port Isabel Detention Center can be carried out safely and without interruption,” Asset says in the filing.

Immigration and Customs Enforcement Spokeswoman Nina Pruneda did not respond to an inquiry asking what that agency’s contingency plans for operating the detention center are if the contract is terminated and AhtnaSTS is unable to operate the Port Isabel Detention Center.


Asset claims AhtnaSTS is terminating its subcontract in a tit-for-tat move to retaliate against Asset for terminating a subcontract it had with AhtnaSTS in Florence, Arizona.

“ The cordial relationship ended in December 2018 when AhtnaSTS negatively reacted to Asset not subcontracting with AhtnaSTS’s sister company, Ahtna Technical Services, Inc. (“ATSI”), on a newly issued, short-term government contract at the Florence Service Processing Center in Florence, Arizona,” Asset said in a court document.

The only remaining business relationship between the two private security companies is the Port Isabel Detention Center.

According to Asset, when AhtnaSTS was renegotiating that contract with the government, the government requested certain payroll documents to prove new pay rates and an auditor inquired about health-and-welfare benefits paid to one person. Asset says in court documents that it investigated and determined a clerical error had been made and investigated and corrected similar errors. Asset said in the litigation that it notified AthnaSTS of its corrective action. This was in the fall of 2018, according to court documents.

That all changed when Asset notified AhtnaSTS’s sister company ATSI that it would discontinue using it as a subcontractor in Arizona, according to Asset, who claims that AhtnaSTS sent an email demanding that Asset produce documentation and proof that all health-and-welfare monies owed to Asset probationary employees for any government contract for the last decade had been paid and gave the company 10 days to do it.

When the clerical error was discovered last fall, Asset claims AhtnaSTS did not make any request for documentation and Asset disputes AhtnaSTS’s right to request that data.

“ AhtnaSTS’s document request was a bold, unjustified request to look through Asset’s confidential file,” the company said in court documents, adding that AhtnaSTS could use that information to gain an unfair advantage and outbid Asset on future government contracts.

According to Asset, the information requested by AhtnaSTS is confidential and proprietary. That company alleges the only reason AhtnaSTS sought 10 years worth of data was in hopes of finding discrepancies in Asset’s record so it could terminate the subcontract.

Meanwhile, AhtnaSTS notified Asset’s employees that Asset would be removed from the contract on Jan. 26 and that all Asset employees could seek employment with AhtnaSTS, according to court documents.

Asset said the letter caused uncertainty and unrest among its employees.

While AhtnaSTS hadn’t responded to Asset’s filing by deadline, exhibits it filed in the removal to federal court provide a glimpse into AhtnaSTS’s version of events, including a Dec. 20 letter AhtnaSTS President Victoria Dunlap sent to Asset Vice President of Contract Administration and Business Development Ron Gates telling him that AhtnaSTS has serious concerns that the practice of not paying health-and-welfare monies to employees during their probationary period may be more widespread than just the Port Isabel Detention Center contract.

Dunlap tells Gates AhtnaSTS believes Asset is not practicing business in accordance with local, state and federal laws.

“ This issue poses significant reputational risks to AhtnaSTS, and the risk that this type of conduct could lead to sanctions, suspension, or disbarment by the federal government,” Dunlap wrote in the letter, which indicates “the client” demands a corrective action plan.

Another email filed as an exhibit in the federal removal indicates AhtnaSTS was receiving “serious pressure from ICE,” regarding health-and-welfare benefit pay for probationary employees.

Pruneda, the ICE spokeswoman, also did not respond to an inquiry asking whether ICE audited AhtnaSTS over its contract to provide security at the Port Isabel Detention Center.

One of the exhibits shows that AhtnaSTS told Asset it needed to agree to pay cash or deposit into 401ks for employees hired after Dec. 1, 2015, and that AhtnaSTS needed proof for the government showing everything is right and that Asset needs to make sure employees are being paid health-and-welfare benefits from day one.

In its last court filing, Asset is asking that the litigation be moved back to state court or in the alternative that a federal judge schedule a hearing over the temporary restraining order.


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