View Full Version : Searching for the facts about Haliburton

10-07-2004, 12:28 AM
Senator Gone made a big deal in the debate about Haliburton's 7.5 Billion no-bid contract in Iraq. Of course this makes for a great soundbite, and the Senator knows full well that the average person knows absolutely nothing about the procurement process in the US Gov't. But the mere suggestion of impropriety is guaranteed to make an impact, so who cares about the truth.

Some facts:

The contract was an extension of a previous contract that Haliburton had for logistic support around the world. The original contract was competitively bid. This is according to factcheck.org.


I cannot find the original contract in the DOD archives, because I don't know the contract number or date, but there is a press release from the DOD here (http://www.defenselink.mil/releases/2003/b03062003_bt100-03.html).

This contract extension was awarded on Feb. 25, 2003. It was to provide firefighting services in Iraq, in anticipation of Saddam lighting the oilfields on fire again. It was based on a worse case scenario where 1500 oil wells would be set ablaze. It turned out that only a few wells were actually set on fire this time around, so I was curious how much money KBR has actually collected of this $7Bn.

The DOD publishes every contract and award over $5 Million on it's website at the end of each day, so I went to the website and used the search tool to find every Haliburton or KBR contract or award in the last two years. There are several, but only one relating to this particular "no-bid" contract. Every other contract won by KBR was competitively bid. Here is the DOD entry: [ QUOTE ]
Brown &amp; Root Services, Houston, Texas, was awarded on May 4, 2003, a delivery order amount of $24,000,000 as part of a $7,000,000,000 cost-plus-award-fee contract for fire fighting services. Work will be performed in various location in Kuwait and Iraq and is expected to be completed by March 2005. Contract funds will not expire at the end of the current fiscal year. This was a sole source contract initiated on Feb. 25, 2003. The U.S. Army Corps of Engineers, Fort Worth, Texas, is the contracting activity (DACA63-03-D-0005).<hr /></blockquote> So of the $7.5 Billion, which was actually estimated at $7 Billion (worst case), exactly $24 Million has actually been spent under this contract, according to the DOD. Here is the DOD announcement. (http://www.defenselink.mil/contracts/2003/c05122003_ct317-03.html) Note that the contract was awarded by the US Army Corps of Engineers, not Dick Cheney.

Of course, that is not everything that Haliburton has billed the Pentagon for, they also have contracts for logistical support, housing and feeding troops ($2.5 Billion), delivering fuel, etc. Every one of these contracts were competitively bid, and there have been some accounting problems, no doubt. Of the $4.18 Billion total billed, $1.8 Billion cannot be properly accounted for, and the Pentagon may start witholding payments to Haliburton. The disputes are still being negotiated, and Haliburton has not been paid everything billed at this point. Pentagon auditors have recommended witholding 15% of the money billed until the they are satisfied of Haliburton's accounting. source (http://www.factcheck.org/article.aspx?docID=201)

In addition to this, the political fallout has been so harsh, that the Pentagon has cancelled these contracts and is going to break them up and rebid them. This will most likely run the costs up significantly. source (http://www.reuters.com/newsArticle.jhtml?type=topNews&amp;storyID=6163467)

Finally, for anyone interested, here is a Washington Post article written by a Senior Procurement Policymaker from the Clinton Administration that addresses the idea of cronyism in the Pentagon. article (http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&amp;contentId=A6691-2003Nov5&amp;notFound=true)

I would just point out that this is the Bush Administration's Pentagon that initiated the investigation, after Haliburton notified them of the problem. Nobody was <font color="red">caught red handed</font color>, as some people are so fond of implying.

I have no problem with oversight of Government contracts, or competitive bidding. I do have a problem with blatant lies and distortions. Maybe tomorrow I will talk about the "$200 Billion" we've spent on the war.

This politicizing of the war has seriously weakened the US in my opinion. The Kerry camp has done no good with their criticism and disrespect of our Allies, and their repeated accusations that the President of the United States has lied to the rest of the world are <font color="red">especially offensive</font color>. This conduct has effectively destroyed what credibility we had, and tell me, what happens if they don't win in November?

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