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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (327600)	3/13/2007 9:20:02 PM
From: Road Walker	Read Replies (1) \| Respond to of 1573850

re: Most contractors are not hired by the federal government, some of them aren't even hired as part of a federal contract. Most of them don't earn over $100k. I believe most of them are hired as part of a federal contract... most of the 110,000. And most of them do earn $100K, but their cost is even higher. Contractors in Iraq make costs balloon Extensive paramilitary work earns profit on several levels Zovko died as he was escorting a U.S. convoy in Fallujah. Joseph Neff and Jay Price, Staff Writers Jerry Zovko's contract with Blackwater USA looked straightforward: He would earn $600 a day guarding convoys that carried food for U.S. troops in Iraq. But that cost -- $180,000 a year -- was just the first installment of what taxpayers were asked to pay for Zovko's work. Blackwater, based in Moyock, N.C., and three other companies would add to the bill, and to their profits. Several Blackwater contracts obtained by The News & Observer open a small window into the multibillion-dollar world of private military contractors in Iraq. The contracts show how costs can add up when the government uses private military contractors to perform tasks once handled by the Army. Here's how it worked in Zovko's case: Blackwater added a 36 percent markup, plus its overhead costs, and sent the bill to a Kuwaiti company that ordinarily runs hotels. That company, Regency Hotel, tacked on its costs for buying vehicles and weapons and a profit and sent an invoice to a German food services company called ESS that cooked meals for the troops. ESS added its costs and profit and sent its bill to Halliburton, which also added overhead and a profit and presented the final bill to the Pentagon. It's nearly impossible to say whether the cost for Zovko doubled, tripled or quadrupled. Congressional investigators and defense auditors have had to fight the primary contractor, Halliburton, for details of the spending. The companies say the subcontracts are confidential and won't discuss them. About 20,000 private security contractors are now in Iraq, escorting convoys, protecting diplomats, training the Iraqi army and maintaining weapons. The bills for this work flow from the bottom up. They start with Blackwater's $600-a-day guns for hire such as Zovko and his three comrades, who were killed escorting a convoy through Fallujah in March. At the top is Houston-based Halliburton, which has an open-ended "cost-plus" contract to supply the U.S. military with food, laundry and other necessities. Cost-plus means the U.S. government pays Halliburton all its expenses -- its costs -- plus 2 percent profit on top. So far the Army has committed $7.2 billion on this cost-plus contract to Halliburton, which has been criticized for its performance in Iraq. The company has drawn additional political fire because of its ties to Vice President Dick Cheney, a former Halliburton CEO. Henry Bunting, a former Halliburton purchasing officer, said he heard a common refrain in 2003 in Kuwait from managers at KBR -- also known as Kellogg Brown & Root -- a division of Halliburton: "Don't worry about price. It's cost-plus." more... newsobserver.com