Army to End Halliburton Handouts
by Pamela LeaveyAfter years of attacks on the war profiteering of Halliburton, 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.”
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 has repeatedly denied all allegations but, yesterday, Army officials “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 WaPo reports that “No contractor has received more money as a result of the invasion of Iraq than Halliburton, whose former chief executive is Vice President Cheney.”
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Our Vice President must be so proud.
Previously, I have posted comments on the Halliburton contract, but I believe they bear repeating here. In another write up on this subject, it was noted that Halliburton has been paid 8 billion dollars this year alone. While the word is that the contract is being discontinued, that statement should be closely monitored. Halliburton can, and probably will, immediately “invent” new contractors using a different name, but actually controlled by Halliburton. During my time in contracting for the government, we discovered a number of cases where the same contractor was operating under different names and bidding on the same contract. A high bid and a low bid, typically, in hopes of the low getting the contract, while the high simply provided a false pretense of adequate competition. Now some further comments:
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 $5 a can, with all the hidden costs, probably fraudulent, added in.) 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!
The Halliburton contract should not have been awarded as a long term contract, rather a short term contract while other bidders could be found or developed, as required by the FAR. For it to have continued since the invasion is counter to the intent of the law and nothing short of a disgrace.