OMG SCANDLE SCANDLE SCANDLE!
First the competition issue. Last year, as administration officials made plans for war in Iraq, they were greatly concerned that Saddam Hussein would set fire to his country's oil fields, just as retreating Iraqi troops had done in Kuwait at the end of the first Gulf War. That, military planners knew, would result in a huge economic and environmental disaster. "The model we were looking at was what the Iraqis had done in Kuwait at the end of the Gulf War," says Lt. Col. Eugene Pawlik, a spokesman for the Army Corps of Engineers. "We had to consider the possibility that the Iraqis would set that many or more wells on fire in Iraq and what it would take for us to throw a maximum response at a maximum destruction scenario."
Last November, the Corps assigned Kellogg Brown & Root (KBR), which has been a wholly owned subsidiary of Halliburton since the 1960s, to do a classified study of potential damage and repairs in the Iraqi oil fields. Contrary to Waxman's assertion, the work was done under a competitively awarded contract system known as the U.S. Army Logistics Civil Augmentation Program, or LOGCAP. The LOGCAP system came about because of the military's need to perform complex jobs — peacekeeping in Bosnia, intervention in Haiti — on sometimes very short notice. In such situations, American troops require lots of logistical support; camps have to be built, utilities have to be supplied, food has to be cooked. By the early 1990s, as the size of the active-duty force shrank, the Pentagon began to "outsource" much of that work, that is, pay civilian contractors to do it rather than tie up soldiers with non-essential tasks. Instead of going through a months-long competitive-bidding process for each job, the military came up with LOGCAP.
LOGCAP is, in effect, a multi-year supercontract. In it, the Army makes a deal with a single contractor, in this case Halliburton, to perform a wide range of unspecified services during emergency situations in the future. The last competition for LOGCAP came in 2001, when Halliburton won the contract over several other bidders. Thus, when the oil-field study was needed, Corps officials say, Halliburton was the natural place to turn. "To invite other contractors to compete to perform a highly classified requirement that Kellogg Brown & Root was already under a competitively awarded contract to perform would have been a wasteful duplication of effort," Corps commander Lt. Gen. Robert Flowers wrote to Waxman in April.
In February 2003, with the study done, the Corps of Engineers decided to issue a contract to actually execute the plan that KBR had drawn up for dealing with problems in the Iraqi oil fields. At the end of that month, Army headquarters authorized the Corps to issue a sole-source contract to KBR. (The assignment seemed logical for another reason: Halliburton/KBR put out 350 oil-well fires in Kuwait after the first Gulf War.) "Only KBR, the contractor that developed the complex, classified contingency plans, could commence implementing them on extremely short notice," Flowers wrote Waxman. "The timing was driven by Central Command's operational requirement to have support available in advance of possibly imminent hostilities." Flowers added that the contract was always intended as a temporary "bridge" to a more permanent contract that would be offered for competitive bidding.
In 1997, when LOGCAP was again put up for bid, Halliburton/Brown & Root lost the competition to another contractor, Dyncorp. But the Clinton Defense Department, rather than switch from Halliburton to Dyncorp, elected to award a separate, sole-source contract to Halliburton/Brown & Root to continue its work in the Balkans. According to a later GAO study, the Army made the choice because 1) Brown & Root had already acquired extensive knowledge of how to work in the area; 2) the company "had demonstrated the ability to support the operation"; and 3) changing contractors would have been costly. The Army's sole-source Bosnia contract with Brown & Root lasted until 1999. At that time, the Clinton Defense Department conducted full-scale competitive bidding for a new contract. The winner was . . . Halliburton/Brown & Root. The company continued its work in Bosnia uninterrupted.
That work received favorable notices throughout the Clinton administration. For example, Vice President Al Gore's National Performance Review mentioned Halliburton's performance in its Report on Reinventing the Department of Defense, issued in September 1996. In a section titled "Outsourcing of Logistics Allows Combat Troops to Stick to Basics," Gore's reinventing-government team favorably mentioned LOGCAP, the cost-plus-award system, and Brown & Root, which the report said provided "basic life support services — food, water, sanitation, shelter, and laundry; and the full realm of logistics services — transportation, electrical, hazardous materials collection and disposal, fuel delivery, airfield and seaport operations, and road maintenance."
In 2001, after the Bush administration came into office, the giant LOGCAP contract expired again and another competition was held. Once again, Halliburton won the contract, and it was under that arrangement that the Iraqi-oilfield analysis was done. As the record shows, Halliburton won big government contracts under the Clinton administration, and it won big government contracts under the Bush administration. The only difference between the two is that Henry Waxman is making allegations of favoritism in the Bush administration, while he appeared untroubled by the issue during the Clinton years.
