The U.S. Army has removed forwarder EGL Eagle Global Logistics from a list of unapproved firms for government contracting, after the two sides reached an agreement on issues stemming from a 2003 overcharge case.

EGL General Counsel Dana Carabin said the company and the Army had signed a compliance agreement Friday afternoon under which EGL would again be eligible to participate in new government contracts, following a brief suspension.

The Army's Web site that names the parties excluded from contracting no longer has EGL on that list.

After a former EGL regional manager pleaded guilty Feb. 16 to fraud charges -- for imposing a war risk surcharge in 2003 on military shipments to Iraq that EGL was handling as a subcontractor -- the Army on Feb. 27 listed the company on the Web site as under an indefinite suspension.

The Department of Defense inspector general had initially questioned the surcharges because they had not been charged to Houston-based EGL by its vendor for air transportation.

The former EGL manager, Christopher Cahill, is awaiting sentencing. EGL had earlier fired him and another employee in the case. But still unsettled was the issue of EGL repayment of the surcharges and penalties. EGL previously said it planned to repay overcharges of $1.14 million from the war risk fees, plus $2.86 million that the government was assessing as penalties. But Carabin said while the company had set that money aside, the actual repayment method was still under discussion in the period before the Army suspended EGL from new contracts.

Carabin said the company received official notice of the Army's action on March 7. Other government sites picked it up in turn from the Army's posting and spread the ban to other departments with varying effective dates, with the notices all citing the recent Cahill conviction as cause of the suspension.

EGL reported the suspension to investors in a March 17 filing with the Securities and Exchange Commission. In both that and an earlier SEC filing, EGL also said that under a pending settlement agreement it had with prosecutors in the case, the U.S. Attorney's Office for the Eastern District of Texas had agreed not to recommend charges against the company or debarment from government contracting.

Carabin met in Washington with Army officials on March 20, she said, to discuss efforts the company had been making to settle the issues. Afterward, the company was in communication with U.S. officials throughout last week on the wording of an agreement to monitor EGL's future compliance with contracting rules.

John D. Boyd