The War Profiteers - War Crimes, Kidnappings, Torture and Big Money
July 13th, 2006 - U.S. Army Restructures Contract with Halliburton
New York Times
By James Glanz
July 13, 2006
Baghdad, Iraq, July 12 - The Army plans to terminate and restructure a lucrative and enormously contentious logistics contract that has paid a single company, Halliburton, more than $15 billion to do jobs like deliver food and fuel and construct housing for American troops around the world since late 2001.
The changes, described in draft contracting documents on Army Web sites, await final Pentagon approval, said Linda K. Theis, a spokeswoman for the Army Field Support Command in Rock Island, Ill., which oversees the contract. But they have already received extensive review and are moving through the upper echelons of the Army, she said.
If the plans are carried through, Halliburton’s contract will end, and the tasks it does will be divided among as many as four companies. One company will be an umbrella for planning and oversight, and the others will compete for the actual job orders — things like building camps and delivering fuel in war zones.
The Army said it hoped this approach would foster competition and lower the risks of having one large contractor in charge of critical military programs. Critics of the exclusive, no-bid contract, including Representative Henry A. Waxman, a California Democrat, say it has allowed Halliburton to charge unreasonably high costs for some work. They have often pointed to the deal with Halliburton, which was led by Dick Cheney before he quit to become vice president, as an example of cronyism by the Bush administration in awarding lucrative contracts.
Halliburton has dismissed those criticisms, and the Army has largely upheld its claimed costs for its work. Much of the criticism has been over work and billing by KBR, the Halliburton subsidiary once known as Kellogg Brown & Root.The Washington Post reported Wednesday that Halliburton’s contract would be ended.
Melissa Norcross, a Halliburton spokeswoman, called the proposed changes “neither unusual nor unexpected,” because earlier versions of the logistics contract had gone through the same process. The Halliburton contract could have run for 10 years, but the Army has the option of ending it after an annual review.
Ms. Theis said that when Halliburton’s logistics contract was awarded, the Army expected that it would be worth around $100 million over 10 years. But that was before the wars in Afghanistan and Iraq scattered the American military, with its vast logistical requirements, around the world.
When asked what role the widespread criticism of Halliburton’s work had played in generating the proposed changes, the Army replied, “None.” The shift was driven only by the surging logistics needs of the American military, the Army said.
But Frederick D. Barton, co-director of the postconflict reconstruction project at the Center for Strategic and International Studies, said he doubted that the waves of criticism could have been missed in the Army’s reviews. Because so much work went to one company for so long, the Army might have a hard time finding others with the capacity to carry the load now, he said.
“There are not competitors with warehouses full of talent sitting around waiting for this assignment,” Mr. Barton said.
Copyright 2006 The New York Times Company