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Originally Posted by Ustwo
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.
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Thanks for the info Ustwo, anyway you can provide a source or link?
For me, it's not so much that it's Halliburton, but rather the seemingly lack of transparency in the whole bidding process. I don't think anyone said that Bush was evil, but sometimes what his administration does raises eyebrows. It is healthy to question and raise questions I think.
My question would be, why do they need to build a new facility? What's wrong with the old one? It all seems like a waste of money to me.
Or, you could even "spin" it this way - They have to rebuild a ne facility to comply with international standards, to build more "humane structures", and satisfy Amnesty International concerns. THAT, would be ironic
