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Context of 'April 9, 2003-September 18, 2003: Halliburton Overcharges US Government on Gasoline Imports'

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The US Army Corps of Engineers awards Halliburton subsidiary, Kellogg, Brown & Root (KBR), a sole-source monopoly contract to repair and operate Iraq’s oil infrastructure. The contract is awarded in secrecy without any competing bids from other qualified companies. Halliburton will eventually charge the government $2.4 billion for its work. The Defense Contract Audit Agency will find that about $263 million of these costs are either questionable or unsupported. Despite this, the US Army will pay Halliburton all but $10.1 million, or 3.8 percent, of the disputed costs. [New York Times, 2/27/2006; US Congress, 3/28/2006, pp. 3-4 pdf file]

Entity Tags: Defense Contract Audit Agency, Halliburton, Inc., US Army Corps of Engineers

Timeline Tags: Iraq under US Occupation

Halliburton issues a press release declaring that it has won a contract from the US Army Corps of Engineers to extinguish oil well fires and do emergency repairs to Iraq’s oil infrastructure in post-invasion Iraq. The firefighting work will be subcontracted to Houston-based companies Boots & Coots International Well Control, Inc. and Wild Well Control, Inc. [Halliburton, 3/24/2003]

Entity Tags: Halliburton, Inc.

Timeline Tags: Iraq under US Occupation

Halliburton is paid $304,486,577 to import 191,965,150 gallons of gasoline into Iraq at an average price of $1.59 per gallon. This does not include the two to seven percent bonus the company will receive as part of its cost-plus contract, which will bring the total cost to between $1.62 and $1.70 per gallon. The Congressional Research Center will later report that during this time the wholesale cost of gas in the Middle East was only 71 cents per gallon, meaning that Halliburton was charging the government 91 to 99 cents for transporting a single gallon of gas to Iraq. Later, an expert interviewed by the staff of Congressman Henry A. Waxman will claim that the gas could have easily been transported into Iraq for 20 to 25 cents per gallon. Another will claim that it could have been done for as little as 10 cents per gallon. [US Congress, 10/15/2003, pp. 3-4 pdf file]

Entity Tags: Halliburton, Inc.

Timeline Tags: Iraq under US Occupation

The Pentagon’s Defense Contract Audit Agency sends a draft audit report to Halliburton subsidiary Kellogg, Brown, & Root (KBR) claiming that the firm overcharged the US military as much as $61 million for fuel deliveries into Iraq. The report says that KBR charged an average of $2.64 per gallon, more than twice the price others were paying. The DCAA also says the company has been slow to provide cost estimates for its projects in Iraq. KBR has given the US government estimates for only 12 orders. As of this date, 69 are overdue. [New York Times, 12/12/2003]

Entity Tags: Defense Contract Audit Agency, Halliburton, Inc.

Timeline Tags: Iraq under US Occupation

Compounding effect of multiple tiers of subcontractorsCompounding effect of multiple tiers of subcontractors [Source: News Observer] (click image to enlarge)Despite the fact that the Logistics Civil Augmentation Program (LOGCAP) contract explicitly prohibits Halliburton and its subcontractors from subcontracting security services, Halliburton subcontractor ESS hires the firm Blackwater USA to provide security through Regency Hotel, another subcontractor. Each of the subcontractors involved in this arrangement will charge a substantial mark-up for the security personnel. Blackwater pays its security guards $600 per day and charges Regency $815 per day plus overhead costs, while Regency charges ESS between $1200 and $1500 per day for each security guard. It is not known what ESS charges Halliburton or what the final bill is for the taxpayer. Halliburton refuses to disclose this information to Congress. Congressman Henry Waxman, in a letter to Secretary of Defense Donald Rumsfeld, will suggest that Halliburton’s invoice to the US government for these services was not legal and should not have been paid. [Regency Hotel & Hospital Company, 3/12/2004 pdf file; News & Observer, 10/24/2004; News & Observer, 10/28/2006; US Congress, 12/7/2006 pdf file]

Entity Tags: Regency Hotel, Halliburton, Inc., Blackwater USA, ESS

Timeline Tags: Iraq under US Occupation

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