(AP)--The Army has given a Halliburton Co. subsidiary
more than $425 million in troop support work,
much of it related to the Iraq war, over the past
14 months under a contract that Vice President
Dick Cheney's former company won in 2001.
new work is in addition to the $71.3 million that
Halliburton's subsidiary, Kellogg Brown & Root,
has received from the Army Corps of Engineers
in contracts to repair and operate oil wells in
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.
Rep. Henry Waxman, D-Calif., who disclosed the
troop support work orders Thursday, said the structure
of that contract means that "the amount that
Halliburton could receive in the future is virtually
appears that many, if not all, the task orders
under the contract were awarded without any competition,''
Waxman said in a letter to Acting Army Secretary
Les Brownlee. "This type of arrangement poses
inherent risks to taxpayers. ... It is unclear
what safeguards, if any, the Army is using to
prevent excessive charges to the government.''
Halliburton, a Dallas-based oilfield-services
and construction company, disputes those characterizations,
noting it had to compete to win the original contract
in 2001 and that each of its work orders is covered
by strict guidelines and costs controls.
2001 contract, it notes, was designed to give
the government flexibility over the next decade
to call on Halliburton's expertise when needed
in the service areas covered by the contract.
government contracts are awarded, not by politicians,
but by government civil servants, under strict
guidelines,''company spokeswoman Wendy Hall said
Thursday. "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.''
Brown & Root competed with two other companies
to win the logistics contract that makes it the
Army's only private supplier of troop support
services over the next decade. 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 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.
March 2002, the Army has issued 24 task orders
totaling $425 million under the contract for work
related to Operation Iraqi Freedom, according
to Army records provided Waxman. Eleven more work
orders totaling $103 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
Brown & Root through April for work under the
contract related to Iraq and Afghanistan.
Carlson said the more than $500 million in work
orders represents the Army's best estimate of
the final costs of the projects. He said Brown
& Root 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
In January, the Army obligated $60 million to
Brown & Root to provide logistical supply line
services and locations in Turkey. But because
the Turkish government refused to allow U.S. troops
to launch an invasion of Iraq from Turkey, much
of that obligation was not spent, Carlson said.
asked Brownlee to explain what actions and procedures
the Army has taken to ensure that it will not
be hit with cost overruns like those identified
by the General Accounting Office, Congress' investigative
arm, when Brown & Root had a similar exclusive
troop support contract for the U.S. military action
in Bosnia in 1997.
AP-NY-05-29-03 1959EDT Copyright 2003, The Associated
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