UPDATE 3-Agility still negotiating with US on fraud charges

* Agility granted briefing schedule as talks continue

* Prosecutor says case will be long and complex

* Agility supplies food to U.S. troops in Iraq and Kuwait (Adds statement from company)

By Verna Gates

ATLANTA, Feb 8 (Reuters) - Kuwaiti logistics company Agility (AGLT.KW) is negotiating with U.S. authorities to resolve an indictment accusing it of overcharging the U.S. Army $60 million on supply contracts in Iraq, Kuwait and Jordan, the company's lawyer said on Monday.

Agility, formerly Public Warehousing Co K.S.C. (PWC), was indicted by a U.S. grand jury in Atlanta in November for overcharging the U.S. Army over 41 months on $8.5 billion in contracts to provide food to soldiers in Iraq, Kuwait and Jordan.

"The company is in active negotiations and we hope this can be resolved," company lawyer Richard Deane said at an initial court hearing in Atlanta. The discussions were not conclusive, he said, and asked the court to set a briefing schedule, or a schedule of hearings to keep the judge up to date.

He declined to reveal details on the negotiations when asked by a Reuters reporter.

In a subsequent statement, Agility said the court agreed to set a briefing schedule. "The request for a briefing schedule is intended to preserve PWC's rights while the company and the Department of Justice conduct discussions aimed at a resolution of the case," it said.

Prosecutor Barbara Nelan forecast "a long and complex case".

Agility, the principle food supplier to the U.S. military in Kuwait and Iraq, said previously the indictment and complaint are without merit.

Prosecutors have said that, if convicted of violations under the False Claims Act, PWC faces probation and a fine of up to twice the gain it realized or twice the loss to the United States.

ALLEGED MANIPULATION OF CONTRACTS

The six counts of the indictment charge PWC with crimes against the United States including: conspiracy to defraud, committing major fraud, making false statements, making false, fictitious or fraudulent claims and wire fraud.

Agility said in November that it had been suspended, but not debarred, from new U.S. government contracts pending the outcome of the indictment.

In Monday's hearing, Deane filed a motion alleging the indictment summons against Agility was not properly served.

"PWC hereby enters an initial appearance to quash service of summons on the indictment. The attempted service on PWC was inadequate under the governing legal requirements," he said.

The indictment alleges PWC overbilled the Army through scams, including failing to purchase cheaper or discounted food, inflating its distribution fees and submitting fraudulent claims.

The indictment followed an initial whistle-blower suit filed by Kamal Mustafa Al-Sultan, the owner of a company that partnered with PWC to submit a proposal for the contracts, according to Justice Department officials. (Writing by Pascal Fletcher; editing by Steve Orlofsky)