Tilted Forum Project Discussion Community - View Single Post - Halliburton to Build $30 Million Guantanamo Jail

Ustwo · 06-17-2005, 08:45 PM

The lack of understanding of how these contracts works is almost mind boggling based on the amount of noise this subject makes.

The profit margin is determined ahead of time. It is normally a very low %, far lower than most private work. If Haliburton goes over that profit margin they have to give the money back (hence the 'overcharged for oil' deal, government accountants determined the profit margin exceeded the one set and Haliburton had to return the difference, SOP.)

The government sets the profit margin for between 2-7%. In Iraq I believe it is set at 3.8%.

Basically the only way to make a profit is to do very large scale projects like this, so you need to be big enough to do the work PLUS you have to accept the deferred payment that is typical for most government contracts.

Not many companies fit the bill and Haliburton has a very good record on this.

So complain all you want but I'd rather have the job done by reputable companies who have worked with the government for decades.

06-17-2005, 08:45 PM	#14 (permalink)
Ustwo Pissing in the cornflakes	The lack of understanding of how these contracts works is almost mind boggling based on the amount of noise this subject makes. The profit margin is determined ahead of time. It is normally a very low %, far lower than most private work. If Haliburton goes over that profit margin they have to give the money back (hence the 'overcharged for oil' deal, government accountants determined the profit margin exceeded the one set and Haliburton had to return the difference, SOP.) The government sets the profit margin for between 2-7%. In Iraq I believe it is set at 3.8%. Basically the only way to make a profit is to do very large scale projects like this, so you need to be big enough to do the work PLUS you have to accept the deferred payment that is typical for most government contracts. Not many companies fit the bill and Haliburton has a very good record on this. So complain all you want but I'd rather have the job done by reputable companies who have worked with the government for decades. __________________ Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps.