DJ Halliburton's Work In Iraq, Afghan Could Earn It Billions
WASHINGTON (AP)--U.S. Vice President Dick Cheney's former company
already has garnered more than $600 million in military work related
to the wars in Afghanistan and Iraq, and potentially could earn
billions more without having to compete with other companies.
As the Army's sole provider of troop support services, Halliburton's
(HAL) Kellogg Brown & Root subsidiary has received work orders
totaling $529.4 million related to the two wars under a 10-year
contract that has no spending ceiling.
Rather than put the Iraq work up for bidding, the government has
used the 2001 Halliburton contract to place the various work orders in
Iraq, prompting criticism from some Democrats that Cheney's former
company is receiving favored treatment.
"The amount Halliburton could receive in the future is virtually
limitless," said Rep. Henry Waxman, D-Calif., who disclosed the troop
support work orders Thursday. "It is simply remarkable that a single
company could earn so much money from the war in Iraq."
Halliburton, a Houston-based oilfield-services and construction
company, disputes those characterizations, noting it had to compete to
win the original contract and that each of its work orders is covered
by strict guidelines and costs controls.
"U.S. government contracts are awarded, not by politicians, but by
government civil servants, under strict guidelines," company
spokeswoman Wendy Hall said. "Government civil servants are well aware
of and consistently abide by the requirements of the process.
Privatizing this work allows the military to concentrate on its
mission. "
"Any allegation that this contract is set up to encourage
unwarranted spending is unfounded and untrue," she said. "The vice
president has nothing to do with the awarding of contracts, the
bidding process or task orders."
Cheney headed Halliburton from 1995 until George W. Bush picked him
as his running mate in July 2000.
The Army Corps of Engineers, using a separate no-bid contract, has
awarded Kellogg Brown & Root $71.3 million in work orders to repair
and operate oil wells in Iraq. That contract has a two-year duration
of a spending ceiling of $7 billion.
Kellogg Brown & Root competed with two other companies in 2001 to
win the logistics contract that makes it the Army's only private
supplier of troop support services such as housing, amenities and food
over the next decade.
The initial logistics contract award carried no value. The Army
negotiates each task order with the company and then verifies the
costs as they are billed.
There is no ceiling on spending, because the contract is designed to
provide rapid troop support wherever and whenever U.S. forces move
into action overseas.
Under similar contracts, the Army paid Kellogg Brown & Root $1.2
billion from 1992 through 1999 to support U.S. troops, mainly in the
Balkans. An extension of that contract from 1999 through 2004 is
projected to cost $1.8 billion.
Since March 2002, the Army has issued 24 task orders totaling $425.5
million under the contract for work related to Operation Iraqi
Freedom, according to Army records provided Waxman. Eleven more work
orders totaling $103.9 million have been issued under the same
contract for work related to the war in Afghanistan.
Dan Carlson, spokesman for the Army Field Support Command, said the
Army has paid $42 million to Kellogg Brown & Root through April for
work under the contract related to Iraq and Afghanistan.
Carlson said the more than $500 million in work orders under the
logistics contract represents the Army's best estimate of the final
costs of the projects. He said the company must justify its spending
to Army contract officials before it can be paid.
"Costs are verified as they are billed," he said. "We may spend more
or we may spend less."
Much of a $60 million obligation to Brown & Root to provide
logistical supply line services and locations in Turkey was never
spent because the Turkish government refused to allow U.S. troops to
launch an invasion of Iraq from Turkey, Carlson said.
(END) Dow Jones Newswires
05-30-03 0815ET
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