It’s taken several years, but the very lucrative [tag]no-bid[/tag] [tag]contracts[/tag] for [tag]Halliburton[/tag] appear to have come to an end. The WaPo’s front-page story that broke the news, however, included one key tidbit that shouldn’t be overlooked.
The [tag]Army[/tag] is discontinuing a controversial [tag]multibillion-dollar[/tag] 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 [tag]Iraq[/tag].
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.
Of course, Halliburton’s sketchy deals are well known, which is why the end of their “unique arrangement” with the federal government is encouraging. The [tag]Pentagon[/tag]’s new contracting system will split work between three companies, with a fourth brought it to monitor the performance of the other three. Can Halliburton be one of the three? Yes, but at least it’ll be a competitive process.
But the other interesting point here is the timing: Halliburton’s multi-billion dollar deals are wrapping up just as U.S. [tag]reconstruction[/tag] efforts in Iraq end.
The decision on Halliburton comes as the U.S. contribution to Iraq’s reconstruction begins to wane, reducing opportunities for U.S. companies after nearly four years of massive payouts to the private sector.
Of the more than $18 billion Congress allocated for reconstruction in late 2003, more than two-thirds has been spent and more than 90 percent has been contractually obligated, according to the inspector general’s office overseeing reconstruction work. The rest of the money, which is collectively known as the Iraq Relief and Reconstruction Fund, needs to be obligated by the end of September.
Army spokesman Dave Foster said in a written response to questions that funding for 11 contracts covering various aspects of reconstruction — including transportation, communications, water distribution and the electric grid — will expire this fall. While the contractors will be allowed to finish any work previously requested, no new work can be ordered after September.
As Foster told the Post, “The Iraq reconstruction is winding down … so there is no need for new contracts to replace the existing.”
In other words, Halliburton’s sweetheart reconstruction deals are ending at the exact same time the Bush administration is no longer spending big bucks on reconstruction deals.
It’s remarkable timing, isn’t it?