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Ear to the Ground

Belated Justice: Army Cancels Halliburton Contract

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Posted on Jul 13, 2006

We’re a bit late to this story, but we couldn’t let it go un-blogged. So, without further ado:
HUURAH!

  • You know the old saying: You can overbill some of the government agencies all the time, all the government agencies some of the time…but you can’t, apparently, charge $45 for a case of soda and get away with it forever.


    AP:

    The Army will rebid the multibillion-dollar contract under which a Halliburton Co. subsidiary has been providing services to troops around the world after years of complaints over how the deal has worked in Iraq.

    Critics of the contract said the move was overdue and that hundreds of millions of dollars had probably been wasted.

    Halliburton subsidiary KBR, also known as Kellogg Brown & Root, provides food, water, shelter, laundry service and other logistical support for troops under a 2001 contract that has been extended several times.

    Halliburton is a Texas-based oil services conglomerate once led by Vice President Dick Cheney. Bush administration officials have come under fire since the beginning of the war in Iraq for awarding more than $10 billion to the company and its subsidiaries in 2003 and 2004, some of it in no-bid contracts. There have been allegations of fraud, poor work, overpricing and other abuse, which the company has denied.

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    By Vietnam Vet, July 13, 2006 at 7:22 am Link to this comment
    (Unregistered commenter)

    I have posted comments previously on the Halliburton contract, but I believe they are appropriate in repeating here. While it is good news that this farce of a contract is being dropped, care must be taken to insure that Halliburton does not just invent another company, go in with bids, get contracts, and continue to fleece the tax payer as it has been doing. In my years as a contracting specialist for the government, we found instances where the same contractor, operating under more than one name, would submit bids designed to get the contract regardless. Typically, the contractor would submit a bid, then another lower bid, with the intent that the low bid got the contract, while the higher just added a false semblance of adequate competition. The Halliburton contract should never have been awarded as a sole source, long term contract in the first place and is contrary to the intent of acquisition law. It should have, at best, been awarded as a short term, sole source, while other sources were found and/or developed. That it has continued since the invasion is a disgrace for the tax payers. Here are some of my comments previously posted on other sites:

    I am a retired Government Contract Specialist, with many years of soliciting, awarding, managing, and auditing government contracts. The Halliburton contract is probably the least desirable type contract authorized under the Federal Acquisition Regulation (FAR), called cost type contracts, because the advantage under this type arrangement is always with the contractor, not the government. (The contractor’s fee, added after costs are calculated, is generally the profit.) Why? Because the contractor charges the government what it costs to perform under the contract. As such, there is little incentive for the contractor to control costs and can, if the contractor is crooked, “hide” tremendous amounts of fraud, waste, and abuse and reap that as extra profits. (A can of soda, for example, could be billed at $3 a can, with all the hidden costs, probably fraudulent, added in. Note the article indicates a case was at $45; while I am not sure that is accurate, it is clearly plausible!) Secondly, I would wager that there is little actual management and oversight under the Halliburton contract and audits are probably minimal. Results (i.e., discrepancies, fraud, waste, etc.) of any audit will probably be “hidden” under the guise of “National Security,” a favorite ploy of this administration. Thirdly, the contract is probably rife with unauthorized payments, over payments, double billing, etc. And again, probably not reported even if found. Finally, it is highly doubtful that there was significant justification, for a long term, sole source contract as required by the FAR. In sum, the Halliburton contract is probably just a bundle of paper, not worth what it is printed on. My final comment is a little off the subject, but I would say that anyone who thinks Cheny, a retired Halliburton employee currently drawing compensation from that firm, had nothing to do with the award is living in another world. The American people are being fleeced big time, and I really mean BIG TIME!

    Finally, Halliburton claims that all disputes with the government have been settled satisfactorily. You can bet your ass that most, if not all, were settled in Halliburton’s favor, with Cheny pulling all the decision levers. (Information is starting to leak out that Cheny DID in fact, influence the award of the contract.) One would like to see the dispute settlement terms, but any request to see them would probably be denied based on “national security” as this administration consistently claims. A claim that only serves to prevent the public from seeing what this government is doing under the guise of national security.

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