Greenland has tilted the rules for a lucrative American contract in its favour | Polarjournal
The base of the Americans; the land of the Kalaallit (Photo: Heiner Kubny)

If you own a firm that has experience with, among other tasks, airfield operations, construction works and recreational services, and can do it in an Arctic environment, a half-billion-dollar opportunity as base-maintenance provider at Thule Air Base, an American air-force installation in far northern Greenland, may be something for you. But before hopeful applicants start scrambling to pull their papers together for the 16 February deadline to submit bids for what is likely to be a 10-year agreement that starts in 2024, there is one important caveat: foreign firms need not apply.

Reserving the contract for a Danish or Greenlandic firm has been standard practice during the half-century or so that the Pentagon has hired in someone to provide base maintenance at Pituffik (as Thule is called in Greenland) but, when the current contract was awarded, in 2014, it went to a firm that, though registered in Denmark, was ultimately American. The resulting spat over whether the contract should have been handed to one of the three other bidders ended in a lawsuit that eventually determined that the American firm had lived up to the letter of the requirement and could not be made to give it up.

Losing Pituffik was no small matter for Greenland. Before the American firm, now known as Vectrus, took over from Greenland Contractors, the nationally controlled firm that had held the contract for the previous 46 years, the annual revenue generated by the base for Greenland was 236 million kroner (€32 million), an amount that is about a tenth of the country’s annual subsidy from Denmark. Since then, it has been about 90 million kroner. This was due in large part to lost direct income through Greenland’s ownership of Greenland Contractors, as well as the taxes it was able to collect on its revenue. Income now comes mostly from payroll taxes.

A repeat of the
All in a tender’s work (JoAnne Castagne)

There were also indirect economic benefits. As a nationally controlled firm, Greenland Contractors was required to hire locally and to offer apprenticeships. It has been dormant since the handover to Vectrus, but while it was active it billed itself as the largest offerer of apprenticeships in Greenland. Though Vectrus has continued to hire locally and takes on apprentices, its foreign ownership leaves people doubting the depth of its commitment.

Just as important as the financial aspect is the psychological one. Washington does not pay to occupy the 600 square kilometre tract of land the base sits on. Although this has been a thorn in Greenland’s side (not least due to the fact that a 1951 expansion of the base required the forced relocation, later found to have been illegal, of 130 people), as long as the base-maintenance contract was in Greenlandic hands, Nuuk could claim that it was being given someting tangible in exchange for its troubles.

The guidelines for the next contract, which could run through until 2034, and not least, an explicit American commitment to focusing on which offer is best for Greenland, rather what will cost Washington least, is the result of a persistent Greenlandic diplomatic effort that pushed the issue with Washington and with Copenhagen. Their efforts were rewarded in 2020, when the matter was brought up during a visit by Mike Pompeo, then the US secretary of state, and eventually resulted in rules that will all but ensure the outcome is to Nuuk’s liking.

As in the past, firms will continue to need to be registered as an independent Danish or Greenlandic firm. This time around, though, they must also prove that more than half of their capital is under the control of a person or firm in either country and that the final say about decisions is made in Denmark or Greenland. Half of the employees need to be Greenlandic, too. And while managers must reside in Greenland, there is no nationality requirement for who carries out day-to-day operations. In other words, foreigners may apply.

Kevin McGwin, PolarJournal

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