Halliburton Could Get $1.5bn More Iraq Work Reuters
Saturday 26 February 2005
Halliburton, under scrutiny for its contracts in Iraq, would receive an extra $1.5 billion as part of the Bush administration's additional war spending proposal for fiscal 2005, a senior US Army budget official said.
Halliburton, once led by Vice-President Dick Cheney, is the largest corporate contractor in Iraq and has drawn fire for its no-bid contracts there, with auditors charging its Kellogg Brown and Root (KBR) unit overcharged for some work.
The Army's portion of a $81.9 billion supplemental spending package earmarked the extra funding for KBR under its LOGCAP (Logistics Civil Augmentation Programme) contract to provide a wide range of services to US troops in Iraq, the official said. The contract covers food and laundry services, trash collection, mail delivery and other support services.
If approved by Congress, that would bring the total spending under KBR's LOGCAP contract to about $6 billion in fiscal year 2005, about the same amount spent a year earlier, said the offical.
He declined to estimate how much the Army would spend on the LOGCAP contract in fiscal 2006, but said the top US commander in Baghdad was putting a big emphasis on controlling costs by setting clear standards for the services provided.
Gen George Casey told a newspaper earlier this month that KBR had submitted budget estimates that exceeded the Army's proposed spending by $4 billion, adding, "someone has made assumptions that have driven the costs through the roof".
Overall, KBR has earned $7.2 billion under a massive 2001 logistics contract with the US military and could earn more than $10 billion under that deal. It has separate deals with the government for reconstruction work in Iraq.
The senior Army official said the proposed supplemental budget request included about $4 billion in spending to repair or upgrade weapons damaged or worn out by the war in Iraq.
In addition, the budget request included $570 million in funding for replacement of weapons lost in battle, including 13 AH-64 Apache helicopters built by Boeing and five UH-60 Black Hawk helicopters built by the Sikorsky Aircraft unit of United Technologies.
The budget request also included $3.3 billion for new Bradley fighting vehicles made by United Defence Industries, Abrams tanks made by General Dynamics and armored Humvees.
Halliburton: $9.6 Billion in Iraq So Far By Pamela Hess United Press International
Friday 25 February 2005
Washington - Halliburton's logistics contract with the U.S. Army in Iraq has been worth at least $9.6 billion since the start of the war and is mounting at a cost of about $6 billion a year, according to Army documents and officials.
The company, headed by Vice President Dick Cheney for five years prior to his election in 2000, has been paid $6.6 billion for its work so far, with another $3 billion in payments pending completion of the work, said Dan Carlson, spokesman for Army Field Support Command, Rock Island, Ill.
The logistics contract is not just for work performed in Iraq, but that ongoing war accounts for the lion's share of the work. The money obligated to the company under the contract amounts to $10.5 billion, with a little under a billion for work in Afghanistan. In 2005, the Iraq contract is expected to be worth more than $6 billion, with $500 million for Afghanistan and $500 million for other projects, according to an Army budget official and Army documents.
Halliburton subsidiary KBR - formerly known as Kellogg, Brown & Root - holds the contract, known as the Army's Logistics Civil Augmentation Contract, or LOGCAP, an open-ended "cost plus" contract. The Army issues "task orders" for logistics work it needs done - meals served, facilities constructed - and KBR charges a percentage of the cost of the work as its profit.
The LOGCAP arrangement began in 1992, with KBR's predecessor Brown & Root the first winner. It held the contract until 1997 when the General Accounting Office discovered Brown & Root had overcharged the Army for its work on the war and peacekeeping mission in Bosnia. DynCorp won the contract in 1997, but KBR won it back in December 2001 and will hold it for 10 years, according to the contract terms.
KBR has a separate contract originally worth up to $7 billion to restore Iraq's oil infrastructure, awarded on the brink of the war in March 2003. That contract was later divided and opened for competition; KBR won a contract for the restoration of the southern oil fields only for a maximum value of $1.2 billion.
Halliburton's fortunes increased dramatically with the onset of the Iraq war. In 2003 alone it received contracts from the Defense Department worth $4.3 billion, more in one year than it won in Pentagon contracts over the previous five years combined, according to the Center for Public Integrity. The total worth of DOD contracts from 1998 to 2003 was $2.5 billion.
In January 2004, Halliburton fired two of its employees in Kuwait who accepted a $6 million bribe in exchange for awarding Army subcontracts to a Kuwaiti-based company involved in Iraq reconstruction. The next month, Pentagon auditors discovered Halliburton overcharged the military $27.4 million for meals served to American troops at five military bases in Iraq and Kuwait last year.
Despite the controversies surrounding KBR's billing practices, military officials in Iraq told United Press International in 2004 they were satisfied with the quality of food and hygiene facilities provided by the company, saying their troops were generally well fed and healthy and had higher morale as a result. They could not speak to the financial side of the contract.
Army Gives Halliburton $9.4 Million in Bonuses The Los Angeles Times
Friday 25 February 2005
Washington - Halliburton Co. received $9.4 million in bonuses for its work in Kuwait and Afghanistan, the Army said Thursday.
None of the bonuses were for work in Iraq, said Sylvia Youngman, an Army contracts specialist. Reviews of those orders will start next week, she said.
Halliburton's KBR unit, formerly known as Kellogg, Brown & Root, received its biggest bonuses, $4 million of a potential $5 million, for two projects in Bagram and Kandahar, Afghanistan.
Army Field Support Command in Rock Island, Ill., said award fee boards rated KBR's performance as "excellent" to "very good" for more than a dozen "task orders" in Kuwait and Afghanistan.
The Army said this month that it wouldn't withhold 15% of future payments to Halliburton for its work in Iraq after a Pentagon inspector general, an Army auditor and the Defense Contract Audit Agency had recommended docking a portion of the company's payments.
Some government departments have launched investigations of Halliburton's work in Iraq, including an inquiry on whether it overcharged to supply fuel to Iraqi civilians. The company has said its prices were fair.
Rep. Henry A. Waxman (D-Los Angeles) alleged in August that Halliburton, which was headed for five years by Vice President Dick Cheney, was getting special treatment from the Pentagon.
KBR supplies, among other things, housing and daily meals for the 155,000 U.S. troops stationed in Iraq and Kuwait and 18,000 in Afghanistan. Halliburton also is helping to restore Iraq's oil infrastructure.
The awards are the first granted to Halliburton under a contract it won in 2001 to provide emergency combat logistics support worldwide for the Army. It has been paid $7.2 billion of the $10.5 billion obligated.
