Wednesday, July 12, 2006

Business Is Business

The other major defense contractors are receiving an opportunity to get in on Halliburton's exclusive turf.

This could be a reflection of the recent attenuation of Cheney influence in the administration.

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.

The choice comes after several years of attacks from critics who saw the contract as a symbol of politically connected corporations profiteering on the war.

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....

No contractor has received more money as a result of the invasion of Iraq than Halliburton, whose former chief executive is Vice President Cheney.

The logistics work is performed through a subsidiary, Kellogg Brown & Root Services Inc. Last year, the Army paid the company more than $7 billion under the contract, according to a search of government contracting data by Eagle Eye Inc., a private consulting firm. The number this year is expected to be between $4 billion and $5 billion, according to Randy King, a program manager with the Army....

The bidding on the new contract is likely to attract some high-profile suitors, including weapons makers Lockheed Martin Corp. and Northrop Grumman Corp.

"These are huge contracts. They are among the biggest government services contracts that have ever been created," said Loren Thompson, chief operating officer of the Lexington Institute, a defense research organization in Arlington. "Most of the big, integrated defense contractors recognize that new sales of military hardware are going to be hard to come by in the years ahead. There's a general migration to services. And no contract on the horizon is bigger in services than LOGCAP (Logistics Civil Augmentation Program). It's just too big to ignore."

Maybe under the new contract we can get the price of a case of soda down to $35.

Maybe not.

<< Home