|Friday, May 30, 2003|
WASHINGTON — Vice President
Dick Cheney's (search) former company already
has garnered more than $600 million in military work related
to the wars in Afghanistan and Iraq, and potentially could
earn billions more without having to compete with other
As the Army's sole provider of troop support services,
Halliburton's Kellogg Brown & Root subsidiary has received
work orders totaling $529.4 million related to the two wars
under a 10-year contract that has no spending
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.
"The amount Halliburton could
receive in the future is virtually limitless," said
Rep. Henry Waxman, D-Calif., who disclosed the troop
support work orders Thursday. "It is simply remarkable that a
single company could earn so much money from the war in
Halliburton (search), a Houston-based
oilfield-services and construction company, disputes those
characterizations, noting it had to compete to win the
original contract and that each of its work orders is covered
by strict guidelines and costs controls.
"U.S. government contracts are
awarded, not by politicians, but by government civil servants,
under strict guidelines," company spokeswoman Wendy Hall said.
"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."
Cheney headed Halliburton from
1995 until George W. Bush picked him as his running mate in
The Army Corps of
Engineers (search), using a separate
no-bid contract, has awarded Kellogg Brown & Root $71.3
million in work orders to repair and operate oil wells in
Iraq. That contract has a two-year duration of a spending
ceiling of $7 billion.
Kellogg Brown & Root
competed with two other companies in 2001 to win the logistics
contract that makes it the Army's only private supplier of
troop support services such as housing, amenities and food
over the next decade.
The initial logistics contract
award carried no value. The Army negotiates each task order
with the company and then verifies the costs as they are
There is no ceiling on
spending, because the contract is designed to provide rapid
troop support wherever and whenever U.S. forces move into
Under similar contracts, the
Army paid Kellogg 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.
Since March 2002, the Army has
issued 24 task orders totaling $425.5 million under the
contract for work related to Operation Iraqi Freedom,
according to Army records provided Waxman. Eleven more work
orders totaling $103.9 million have been issued under the same
contract for work related to the war in
Dan Carlson, spokesman for the
Army Field Support Command, said the Army has paid $42 million
to Kellogg Brown & Root through April for work under the
contract related to Iraq and Afghanistan.
Carlson said the more than
$500 million in work orders under the logistics contract
represents the Army's best estimate of the final costs of the
projects. He said the company 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
Much of a $60 million
obligation to Brown & Root to provide logistical supply
line services and locations in Turkey was never spent because
the Turkish government refused to allow U.S. troops to launch
an invasion of Iraq from Turkey, Carlson