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KBR truths and lies

October 15th, 2006 by Double Tap

I’m sure you all have heard from many a liberal about how Halliburton and its subsidiary, Kellogg-Brown-and-Root, have benefitted from their “no-bid” contract in Iraq. You’ve also, I’m sure, have heard horror stories about service in Iraq and how much money they are making. Frankly, some of those horror stories are true. I’ve seen several KBR price tags for work they do over here and I was appalled.

However, to debunk some of the liberal conspiracy theories about Halliburton, allow me to quote the blog Captain’s Quarters, which asks a series of questions and then answers them, using data derived from interactive database provided by OMB Watch and the Sunlight Foundation which holds five years of federal spending on contracts and grants, sortable by congressional district and containing plenty of details on the projects the money supported:

What percentage of federal contracts come from full and open competitive bids?
For the six-year period provided by FedSpending, only 40.61% of all federal contracts come from full and open competitive bids in which multiple bids were received. Another 9.95% comes from full and open bid situations but where only the one bid was received, for a total of 50.56%. That number is not improving, either. in FY 2005, the combined categories only accounted for 47%.

25% of federal contracts come from no-bid awards, and that excludes follow-on contracts.

What contractor gets the highest percentage of federal contracts?
Lockheed Martin got 6.49% of all federal contracts for FY2005, which came to nearly $25 billion dollars. Only 37% of that came from full and open competition; the rest came from no-bids or excluded-sources bids. The second-highest category came from operation of government facilities, by the way, and not the defense materiel or R&D efforts which came in at positions 1, 3, 4, & 5.

Which federal contractor won 94.7% of its contracts in full and open competition?
You’re going to laugh when you read this, but it’s … Halliburton. Halliburton is sixth on the list of government contractors, with $6 billion in FY 2005 contracts, one-quarter of what Lockheed Martin received. Almost all of that came from Army contracts, and almost all of it ($5.4B) went to logistics support. They got 94.7% of their contracts in full and open competition in multibid scenarios, and another 4.7% of them from full and open competition where only the winning bid got submitted. Only 0.6% of their contracts came from any kind of restricted bid process, far away from the overall trend in federal contracting.

As I said, I have seen some crazy price quotes from KBR regarding work to be done. However, those were for bids that I, as a representative of the Army, chose not to take. I have the option, in many cases, to open up the bidding to other sources - namely Turkish or Iraqi contractors here or near my base.

KBR and Halliburton are companies out to make a profit - no doubt about that. However, I defy you to find a liberal who can name any other company in the world that is has the expertise and is equipped to do what KBR does logistically for the U.S. military in Iraq and Afghanistan. Every time I’ve posed that question to a liberal, all I’ve received is stony silence - because they don’t know of one.

Of course, you can’t talk about Halliburton unless you talk about Dick Cheney. Liberals also like to gripe about the fact that the Vice-President used to be the CEO of Halliburton and somehow is benefitting financially from the KBR contracts in the Middle East. However, according to a 2004 report by Jim Geraghty at National Review Online, most of the griping is based on conjecture rather than fact. Here’s a summary, nicely compiled by Blogcritics.org:

  • Cheney has released documents showing that most of his deferred salary was paid after he resigned to run in 2000 but before he took office in January 2001. He has also arranged for his stock options to be sold without his input and all proceeds to be donated to charity. Democrats say Cheney nonetheless retains a financial interest in Halliburton’s success.
  • Halliburton’s work in Iraq includes a wide-ranging contract, called a LogCAP, that it won through competitive bidding in 2001 to provide food, fuel, and other logistical services to troops worldwide. That contract — most of which is for services in the Middle East — and the oil infrastructure contract are estimated to be worth a total of $11 billion. Most of that work has gone to KBR, Halliburton’s construction and engineering unit.
  • A Kerry ad during the campaign implied that Cheney has a financial interest in Halliburton and is profiting from the company’s contracts in Iraq. The fact is, Cheney doesn’t gain a penny from Halliburton’s contracts, and almost certainly won’t lose even if Halliburton goes bankrupt. The ad claimed Cheney got $2 million from Halliburton “as vice president,” which is false. Actually, nearly $1.6 million of that was paid before Cheney took office. More importantly, all of it was earned before he was a candidate, when he was the company’s chief executive.

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