Army to end Halliburton deal

flywallyflyflywallyfly Posts: 1,453
edited July 2006 in A Moving Train
Paper: Army to end Halliburton deal

WASHINGTON (Reuters) -- The Army will discontinue its multi-billion dollar contract with oil services giant Halliburton Co. to provide logistical support to U.S. troops worldwide, The Washington Post reported Wednesday.

Halliburton, formerly run by Vice President Dick Cheney, has drawn scrutiny for its work in Iraq from auditors, congressional Democrats and the Justice Department, which is investigating potential overcharges for fuel, dining and laundry services.

Texas-based Halliburton is the world's second-largest oil services company and the U.S. military's biggest contractor in Iraq. The logistical support is performed by Halliburton engineering and construction unit Kellogg Brown & Root. Last year, the Army paid the company more than $7 billion under the contract, the Post said.

Army officials defended the company's performance but said Pentagon leaders decided multiple contractors would give them better prices, more accountability and greater protection if a one contractor fails to perform, the newspaper said.

Halliburton maintains that its billing disputes with Defense Department auditors have been resolved and that its work has received rave reviews from the military, the Post reported.

The Pentagon's 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, the newspaper said.

According to the report, the Pentagon plans to split the Iraq work among three companies to be chosen this fall and Halliburton would be eligible to make a bid.

A fourth firm would be hired to help monitor the performance of the three contractors selected, the newspaper said.

Rep. Henry Waxman of California, the top Democrat on the House Government Reform Committee and a frequent Halliburton critic, welcomed the move away from the exclusive contract with Halliburton as a good first step, the Post said.

"When you have a single contractor, that company has the government over a barrel," Waxman said. "One needs multiple contractors in order to have real price competition. Real competition saves the taxpayer money."

Copyright 2006 Reuters. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.
Post edited by Unknown User on

Comments

  • I'll be interested to see if this actually fixes the Halliburton-related problems.
  • flywallyflyflywallyfly Posts: 1,453
    I'll be interested to see if this actually fixes the Halliburton-related problems.


    Very true. It looks good on paper but the reality could be much different.
  • rightonduderightondude Posts: 745
    Very true. It looks good on paper but the reality could be much different.

    well if the US constitution is any indication...
  • Very true. It looks good on paper but the reality could be much different.

    I'm not sure how good it even looks on paper. This statement is troubling:

    "When you have a single contractor, that company has the government over a barrel," Waxman said. "One needs multiple contractors in order to have real price competition. Real competition saves the taxpayer money."

    The only way Halliburton has the government "over a barrel" was because the government gave them cost-plus contracts which allowed Halliburton to jack up costs. Having 3 contractors won't stop that.

    Price competition 'emerges' as part of the bid process and the negotiation process. There's no mention here if this means an end to no-bid contracts. There's no mention here if this means an end to cost-plus contracts.

    Furthermore, there's no mention of how work would be divided between 3 contractors. I forsee the very real possibility that Halliburton just ends up doing 95% of the work.
  • flywallyflyflywallyfly Posts: 1,453
    I'm not sure how good it even looks on paper. This statement is troubling:

    "When you have a single contractor, that company has the government over a barrel," Waxman said. "One needs multiple contractors in order to have real price competition. Real competition saves the taxpayer money."

    The only way Halliburton has the government "over a barrel" was because the government gave them cost-plus contracts which allowed Halliburton to jack up costs. Having 3 contractors won't stop that.

    Price competition 'emerges' as part of the bid process and the negotiation process. There's no mention here if this means an end to no-bid contracts. There's no mention here if this means an end to cost-plus contracts.

    Furthermore, there's no mention of how work would be divided between 3 contractors. I forsee the very real possibility that Halliburton just ends up doing 95% of the work.


    All very good points.
  • keeponrockinkeeponrockin Posts: 7,446
    well if the US constitution is any indication...

    That made my day.
    Believe me, when I was growin up, I thought the worst thing you could turn out to be was normal, So I say freaks in the most complementary way. Here's a song by a fellow freak - E.V
  • Pacomc79Pacomc79 Posts: 9,404
    "Pentagon leaders decided multiple contractors would give them better prices, more accountability and greater protection if a one contractor fails to perform."


    IE, they can fire one segment if that segment is the weak link, instead of bitching to the head people while continuing to pay because you are getting decent service in other areas.


    You still have the cost + contract issue. You still have the propensity of the pentagon, to spend other peoples money with reckless abandon, with little oversight.

    Competition is good, obviously, but low bid contracting can bring another set of issues.

    I think forcing halliburton to compete even if they do end up doing most of the work is a very good idea though in the long run.
    My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
  • Here's another fine government project that would fit the "new and improved" qualifications named in the article above.

    http://en.wikipedia.org/wiki/Big_Dig
  • Pacomc79Pacomc79 Posts: 9,404
    Here's another fine government project that would fit the "new and improved" qualifications named in the article above.

    http://en.wikipedia.org/wiki/Big_Dig

    From Above.

    Reports of substandard work and criminal misconduct
    On August 11, 2005, it was announced that the Massachusetts State Police searched the offices of the Big Dig's largest concrete supplier in June and found evidence of faked records that hid the poor quality of concrete delivered for highway project. However, it is not believed that the low-quality concrete is connected to the hundreds of leaks discovered in the tunnels that take vehicles under Boston.

    On March 19, 2006, the International Herald Tribune reported that Massachusetts "Attorney General Tom Reilly plans to sue Bechtel/Parsons Brinckerhoff and other companies if the two sides do not reach an agreement over 200 complaints of poor work in the construction of a highway system under the center of Boston, the Boston Globe reported Saturday. Reilly was said to be seeking $67 million from Bechtel and $41 million from other companies." [6]

    On May 4, 2006, six current or former employees from the concrete supplier Aggregate Industries Inc. were arrested and charged for falsifying records regarding the poor quality concrete.

    On May 5, 2006, due to the controversy, Massachusetts Governor Mitt Romney announced he would return some $3,500 in political contributions from employees of Aggregate Industries. [7]

    [edit]
    Big Dig tunnel ceiling collapse
    On July 10, 2006, at approximately 11:00 p.m., a steel tieback that suspends the concrete ceiling inside the tunnel structure failed near the eastern portal of the eastbound I-90 Connector tunnel leading to the Ted Williams Tunnel in South Boston, causing four three-ton sections of ceiling to collapse. A section of ceiling fell on top of a car traveling through the tunnel, killing newlywed 38-year-old passenger Milena Del Valle and slightly injuring her husband Angel Del Valle, who was driving. The Boston Globe noted that similar tiebacks were in use in the Ted Williams Tunnel, as well as in 17 places on I-90. Attorney General Tom Reilly issued subpoenas to those involved in the construction and testing of the tunnels in which criminal charges may follow. Governor Mitt Romney also returned from a vacation in New Hampshire to view the condition of the tunnels. [4] Governor Romney and Attorney General Reilly both called for the resignation of Turnpike Authority chairman Matthew J. Amorello who provides oversight on the project. This call was supported in editorials in Boston's two major newspapers, the Boston Herald [8] and the Boston Globe [9]. Romney and Reilly are taking heat from the media for accepting campaign contributions from Big Dig contractors and for not taking more action prior to the fatal accident. Modern Continental was the contractor that built this section.

    On July 12, 2006, investigators began questioning on how the tunnel ceiling was constructed. The collapse of the ceiling structure began with the failure of a single steel hanger that held up the panels. The failure of that panel set off a chain reaction that caused other hangers to fail and send 12 tons of concrete smashing below. Numerous problems with this same system of bolts and glue in the Ted Williams Tunnel were revealed by the state Office of the Inspector General in a 1998 report. Not only were the bolts too short, but the epoxy used to glue the bolts into the concrete were not up to standard. [5]
    ________________________________________________


    Wow, .......your tax dollars at work. You know, it's really not all that difficult to be honest and do things right the first time.....before people die.
    My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
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