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canuckistan
Mod Team
Joined: 17 Jun 2003
Location: Training future GS competitors.....
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 Posted: Wed Jul 12, 2006 7:03 am Post subject: Halliburton's dominance at the gov't trough to end.. |
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Someone finally wakes up:
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/11/AR2006071101459_pf.html
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Army to End Expansive, Exclusive Halliburton Deal
Logistics Contract to Be Open for Bidding
By Griff Witte
Washington Post Staff Writer
Wednesday, July 12, 2006; A01
The Army is discontinuing a controversial multibillion-dollar deal with oil services giant Halliburton Co. to provide logistical support to U.S. troops worldwide, a decision that could cut deeply into the firm's dominance of government contracting in Iraq.
The choice comes after several years of attacks from critics who saw the contract as a symbol of politically connected corporations profiteering on the war.
Under the deal, Halliburton had exclusive rights to provide the military with a wide range of work that included keeping soldiers around the world fed, sheltered and in communication with friends and family back home. Government audits turned up more than $1 billion in questionable costs. Whistle-blowers told how the company charged $45 per case of soda, double-billed on meals and allowed troops to bathe in contaminated water.
Halliburton officials have denied the allegations strenuously. Army officials yesterday defended the company's performance but also acknowledged that reliance on a single contractor left the government vulnerable. The Pentagon's new plan will split the work among three companies, to be chosen this fall, with a fourth firm hired to help monitor the performance of the other three. Halliburton will be eligible to bid on the work.
The decision on Halliburton comes as the U.S. contribution to Iraq's reconstruction begins to wane, reducing opportunities for U.S. companies after nearly four years of massive payouts to the private sector.
Of the more than $18 billion Congress allocated for reconstruction in late 2003, more than two-thirds has been spent and more than 90 percent has been contractually obligated, according to the inspector general's office overseeing reconstruction work. The rest of the money, which is collectively known as the Iraq Relief and Reconstruction Fund, needs to be obligated by the end of September.
Army spokesman Dave Foster said in a written response to questions that funding for 11 contracts covering various aspects of reconstruction -- including transportation, communications, water distribution and the electric grid -- will expire this fall. While the contractors will be allowed to finish any work previously requested, no new work can be ordered after September.
Among those contracts is another Halliburton deal, for up to $1.2 billion to restore oil services in southern Iraq. As with the others, it will not be extended.
"The Iraq reconstruction is winding down . . . so there is no need for new contracts to replace the existing," Foster said.
Instead, the Iraqi government will have to find its own contractors to do the work, which includes tackling a large number of projects left undone by the United States.
"This is the year of transition for Iraqi reconstruction. The U.S.-funded projects are being completed and transferred to Iraqi management and control," said James Mitchell, spokesman for the inspector general's office.
That office has repeatedly warned of a "reconstruction gap" between what the United States promised in rebuilding the country after the spring 2003 invasion and what it has delivered. For instance, a contract aimed at building 142 new health centers across Iraq instead produced 20 before the program ran out of money.
The heavy involvement of U.S. contractors in Iraq has been one of the defining features of the American presence there, with private companies called on for duties as varied as guarding supply convoys and analyzing intelligence.
No contractor has received more money as a result of the invasion of Iraq than Halliburton, whose former chief executive is Vice President Cheney.
The logistics work is performed through a subsidiary, Kellogg Brown & Root Services Inc. Last year, the Army paid the company more than $7 billion under the contract, according to a search of government contracting data by Eagle Eye Inc., a private consulting firm. The number this year is expected to be between $4 billion and $5 billion, according to Randy King, a program manager with the Army.
The company maintains that its billing disputes with Defense Department auditors have been resolved and that its work has received rave reviews from the military. "By all accounts, KBR's logistical achievements in support of the troops in Iraq, Kuwait and Afghanistan have been nothing short of amazing," said company spokeswoman Melissa Norcross in a statement.
King, the Army official, agreed yesterday. "Halliburton has done an outstanding job, under the circumstances," he said. He added that Pentagon leaders ultimately decided they did not want to have "all our eggs in one basket" because multiple contractors will give them better prices, more accountability and greater protection if one contractor fails to perform.
Halliburton initially won the contract in December 2001. At the time, the deal was relatively modest in size, but stubborn insurgencies in both Iraq and Afghanistan have stretched U.S. troops and kept Halliburton busy trying to meet their needs.
Known formally as the Logistics Civil Augmentation Program, or LOGCAP, the contract "has expanded beyond what anyone could have imagined," said Dov S. Zakheim, the Pentagon's comptroller from 2001 until 2004 and now a vice president at consulting firm Booz Allen Hamilton Inc. "The KBR people themselves would point out that the challenges they had coming out of Iraq, over and above everything else they had to do, were taxing their systems. You're really asking too much of one firm to be able to manage all of this."
The original contract included one base year with nine option years. The Army says it will not pick up the next option year and instead plans to put out a new request for proposal by the end of the month. It expects to announce winners in November.
The bidding on the new contract is likely to attract some high-profile suitors, including weapons makers Lockheed Martin Corp. and Northrop Grumman Corp.
"These are huge contracts. They are among the biggest government services contracts that have ever been created," said Loren Thompson, chief operating officer of the Lexington Institute, a defense research organization in Arlington. "Most of the big, integrated defense contractors recognize that new sales of military hardware are going to be hard to come by in the years ahead. There's a general migration to services. And no contract on the horizon is bigger in services than LOGCAP. It's just too big to ignore."
Rep. Henry A. Waxman (D-Calif.), a frequent Halliburton critic, said he would like to see even more companies included as winners in order to increase competition as work arises. But he welcomed the move away from the exclusive contract with Halliburton as a good first step. "When you have a single contractor, that company has the government over a barrel," Waxman said. "One needs multiple contractors in order to have real price competition. Real competition saves the taxpayer money."
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igotthisguitar
Joined: 08 Apr 2003
Location: South Korea (Permanent Vacation)
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| Posted: Thu Jul 13, 2006 12:53 am Post subject: |
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Good catch.
The full implications of "terminating", or otherwise "revising" this sprawling multi-billion dollar
criminal PORK-BARREL greed-fest remains to be seen  |
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igotthisguitar
Joined: 08 Apr 2003
Location: South Korea (Permanent Vacation)
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| Posted: Mon Jul 17, 2006 11:34 pm Post subject: |
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Halliburton's Fleecing Ends -- Or Does It?
Margaret Carlson
July 17 (Bloomberg) -- I wonder how many customers McDonald's Corp. would keep if instead of including a Coke with a Happy Meal, as the menu promised, the company charged for it twice.
That's what Halliburton Co. did to Uncle Sam, billing $45 for soda by the case and billing for it again when served by the glass at meals.
It's all part of the cost-plus, no-bid life of Halliburton and its subsidiary, Kellogg, Brown & Root, the sole source of just about everything the U.S. Army needs to supply troops in Iraq. For three years, the U.S. government kept paying double for soda and many other things with nary a complaint.
But last week, all that ground to a screeching halt when the Pentagon announced the end of no-bid contracts -- or did it?
Not really. That's like saying to the outlaw Jesse James, ``We'll no longer hand over the money. You have to ask nicely.''
Which is not to compare Halliburton to a common criminal.
There's nothing common about what Halliburton did and a heist of $1.4 billion, an estimate of Halliburton's overcharges by Pentagon auditors.
Two sets of hearings by Representative Henry Waxman and Senator Byron Dorgan, using the Pentagon's own information, exposed Halliburton's deceitful billing practices: charging for twice as many employees as actually hired and always choosing the most expensive vendor. Instead of paying 80 cents a pound for bacon, Halliburton paid $6. Instead of $450,000 for ice, Halliburton paid $3.4 million, blaming transportation costs. Where did it come from, Alaska?
'MWR Baghdad'
For 2,500 soldiers, KBR billed $152,000 for videos, and $617,000 for extra soft drinks for MWR ("morale, welfare and recreation''). How's $100 per bag of dirty laundry and $1.5 million for "tailoring, seamstress service and textile repair" sound? Need towels for the gym? Halliburton's happy to supply 'em at prices you won't believe.
At one hearing, former Halliburton employee Henry Bunting held up an ordinary towel made extraordinary after KBR insisted on embroidering a logo on it saying "MWR Baghdad.'' That jacked the price up from $1.60 each to $7.50.
Halliburton charged for "surge capacity" for extra meals long after there was no chance 5,000 extra mouths would be passing through base camp to be fed. When Halliburton food manager Rory Mayberry noted the discrepancy, his superiors told him to keep quiet about it or face reassignment.
It would be bad enough if this awful behavior claimed no victims, but Halliburton's greed put soldiers already in harm's way at greater risk. Rather than purify the water, KBR ignored regulations so that soldiers bathed and brushed their teeth in water with E. coli bacteria floating in it. Rather than fix new but poorly maintained trucks, KBR abandoned or torched them, leaving soldiers stranded along roads mined with explosive devices, according to an eyewitness at Dorgan's hearings.
Sell-By Date
Food long past its sell-by date was served, along with food spoiled by insufficient refrigeration. Imagine coming home from a hard day at war trying not to get killed and being presented with rancid meat.
While soldiers were afraid to shower for fear of getting nasty bacterial infections, KBR managers charged the Pentagon for luxurious rooms with crystal clear water at the Kempinski Hotel on the ``unpolluted azure coastline'' of Kuwait for $10,000 a month, according to former Halliburton employee Marie DeYoung.
How could the Bush administration stand by and pay up while the troops were so poorly treated? The same way L. Paul Bremer, the U.S.'s former top official in Iraq, could get a Medal of Freedom even as a draft audit of the Coalition Provisional Authority shows that $8.8 billion went unaccounted for on his watch. At the same time, for telling auditors about those 5,000 daily meals not served (adding up to over $200 million), poor Rory Mayberry was banished to a hardship posting in Fallujah.
Life Is a Breeze
And consider what happened to Bunnatine Greenhouse, the highest-ranking civilian in the Army Corps of Engineers. She added a handwritten note that couldn't be missed to the Halliburton contract the Secretary of Defense had to see when he signed off advising the contract be limited to one year. She had already criticized the Defense Department for letting Halliburton attend confidential Pentagon meetings.
Greenhouse was ignored, sidelined and lost her job. She later testified before Congress to "the most blatant and improper contract abuse'' she'd ever witnessed.
For Halliburton, life is still a breeze. The Pentagon ignored its own auditors and paid most of Halliburton's bills, including hundreds of millions for gas from Kuwait. To justify paying for double meals, it upped Halliburton's take to 3 percent of costs and every individual meal was counted as 1.3 meals.
Terrible Message
Letting Halliburton continue, much less bid on government logistics contracts again, sends a terrible message. It says, If I catch you bilking the government, I'll suggest you knock it off. But I'll still pay you, and require only that you compete for the opportunity to do so again -- and likely win because of experience gained from three years on the job, more information than anyone but the Army itself, and an infrastructure already in place. Halliburton could lose if federal procurement officials took into account ``past performance,'' as required, although their pathetic performance in the past makes this unlikely.
In March, Waxman tried to amend the defense appropriations bill to deny contracts to any firm the Pentagon found billed more than $100 million in unreasonable costs. Republicans blocked it 
With their tax cuts and sweetheart contracts, Republicans have asked mostly what their country could do for them even while the country is at war. Halliburton is just the lucky bidder. Dick Cheney, Halliburton's chief executive during the second half of the 1990s, should be ashamed of his former company.
( Margaret Carlson, author of "Anyone Can Grow Up: How George Bush and I Made It to the White House" and former White House correspondent for Time magazine, is a Bloomberg News columnist. The opinions expressed are her own. )
To contact the writer of this column:
Margaret Carlson in Washington at [email protected]
Last Updated: July 17, 2006 00:10 EDT |
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