Shipping Was Extra- A Lot Extra

[retsuki03]

I know it is a war zone, but this is insane.

Shipping was extra — a lot extra

KBR spent millions getting $82,100 worth of LPG into Iraq
By DAVID IVANOVICH
Copyright 2005 Houston Chronicle Washington Bureau


WASHINGTON - Iraq needed fuel. Halliburton Co. was ordered to get it there — quick. So the Houston-based contractor charged the Pentagon $27.5 million to ship $82,100 worth of cooking and heating fuel.

In the latest revelation about the company's oft-criticized performance in Iraq, a Pentagon audit report disclosed Monday showed Halliburton subsidiary KBR spent $82,100 to buy liquefied petroleum gas, better-known as LPG, in Kuwait and then 335 times that number to transport the fuel into violence-ridden Iraq.

Pentagon auditors combing through the company's books were mystified by this charge.

"It is illogical that it would cost $27,514,833 to deliver $82,100 in LPG fuel," officials from the Defense Contract Audit Agency noted in the report.

The portions of the audit report released Monday did not specify exactly how much fuel was involved in this billing.

The portions of audit report were released by Rep. Henry Waxman, D-Calif., and Rep. John Dingell, D-Mich., both dogged critics of Halliburton and its wartime contracts.

Halliburton spokeswoman Wendy Hall said the figures were taken out of context.

"The implication is definitely misleading," Hall said. "Transporting fuel into Iraq was a mission fraught with danger, which increased the prices that firms were willing to offer for transportation."

Halliburton has seen 61 of its workers and subcontractors die in Iraq and Kuwait, many while delivering fuel.

Army officials were desperate to get fuel into Iraq, fearing the lack of such basic necessities as cooking and heating fuel would lead to greater unrest and support for the insurgency.

But efforts to truck in fuel were hampered by repeated attacks on fuel convoys, delays organizing military escorts, supply route closures and changing delivery points, company officials said. Security was so dicey, in fact, that tanker trucks were lucky to make two round trips per month.

And because neighboring Kuwait had few trucks available to transport fuel, Halliburton had to bring in trucks from neighboring countries and contract for a barge, Hall said.

No comment from corps
Company officials say they transported about 3.5 million barrels of LPG from Kuwait to Iraq via truck and barge.

The U.S. Army Corps of Engineers, which had assigned Halliburton the job of getting fuel into Iraq, declined to comment on the substance of the audit report, noting that it contained confidential commercial information that had not been authorized for release outside government channels.

Corps officials said a subsequent audit report was completed in February, which they are now studying.

"The major issues in this audit report have not been resolved," a Pentagon spokesperson said. The corps "is currently working to finalize negotiations for a price on this and all outstanding task orders."

The lawmakers would not say how they had obtained the audit report for the fuel transportation.

Support from agency
Company officials point out the firm's estimating and purchasing systems have recently received a nod of approval from the Pentagon's Defense Contract Management Agency.

In all, Halliburton submitted bills to the U.S. Army Corps of Engineers totaling $875 million for supplying Iraq with fuel from May 2003 through March 2004.

Pentagon auditors questioned $108 million or about 12 percent of those costs.

That's substantially higher than the $61 million in possible fuel overcharges Pentagon auditors had previously identified. But that figure only covered the first five months of Halliburton's fuel supply assignment.

In March 2004, the Defense Energy Support Center, the military's own fuel supply arm, took over the job.

In a letter to President Bush Monday, Waxman and Dingell complained that Pentagon officials had repeatedly ignored their requests to see copies of the Pentagon audits.

"Indeed, when Government Reform Committee staff indicated that they were considering issuing a subpoena for the audit reports, a Defense Department official replied that issuing a subpoena will not get the material released any faster," the lawmakers wrote.

http://www.chron.com/cs/CDA/ssistory...siness/3085603

[DEI37]

is about all I have to say about that.

[cj2112]

you want me to drive an LPG truck into Iraq? Sure thing.....but it's gonna cost ya a couple million per trip. BTW ya do realize that this stuff is highly explosive and people are likely going to look at it as a big friggin bomb...

The Feds should have got a price up front this kind of stuff has been going on for years

[Bill O'Rights]

You can't seriously be trying to justify this...theft? We're talking over 300x the cost of the propane...for transportation costs. Dangerous? Hell, yes! But don't even try to suggest to me that the actual haulers saw anywhere close to a fraction of those charges. Thank you, Halliburton.

[thatoneguy]

Holy bejesus... really? Why would they pay this company to do it? I mean, there HAS to be another company in this country that will get LPG to where it needs to be for less than $27.5 million... This is like those old jokes about the government paying $5000 for a hammer or $10000 for a toilet seat.

[hosti|e]

Im sure they can write it off against the money the government is making on all that oil they now posess

[mazagmot]

Originally Posted by thatoneguy

I mean, there HAS to be another company in this country that will get LPG to where it needs to be for less than $27.5 million...

There probably is, but is our vice president a former CEO with possible financial ties to those other companies? I think not. And we wouldn't want to use one of those other companies would we? Of course not.

Or maybe that money is how we fund our top secret black ops undercover projects. It cost Halliburton $82,100 dollars to buy the LPG, and maybe another $100,000 to secure a truck from out of country, pay for the barge, any private security, penalties to the drivers while waiting for military escort, and that gives us a nice $26 million and change to fund the next f-22 developmnet or an undercover mission to support a rebel uprising. :-P

[jorgelito]

I'll do it for $25 Million. Wow, I just save the US $2.5 million....

What happened to bidding? This doesn't seem "fiscally conservative" to me.

[cj2112]

Originally Posted by jorgelito

What happened to bidding? This doesn't seem "fiscally conservative" to me.

there is why it costs so much, rather than put the job out for bid, or at least get a price up front, we just told them to do it and send us the bill.

[ObieX]

This isn't the first time Halliburton have "over charged" for things over in Iraq and such, stuff like this has been brought up before. I doubt it will be the last time they'll find something they over charged for, and i also doubt anything will be done about any of the cases. I also do not think they will stop overcharging for this stuff, and no one will do anything about that either.

[thingstodo]

Welcome to the world. If you don't agree to the price ahead of time you WILL get screwed. And if you say money is no object, you WILL get screwed.

Most folks in the government don't give a crap about cost because they don't run anything like a business or a household...and all they live for is to collect more $$ so they can get re-elected.

[william]

Big business has control - especially Haliburton. The Army has drivers trained for transporting the fuel. Why not use them? Cheney, and the company he works through, have always been the puppet-master; should not be a surprise that we have to transport fuel into a country that we transport fuel out of.

[guthmund]

Originally Posted by jorgelito

What happened to bidding? This doesn't seem "fiscally conservative" to me.

Bidding works better than no competition at all, but bidding has it's faults as well.

I don't have a national example, but locally, my city council just rejected the latest bid to build the new 'parks and services' complex. Why? The bid was too low. Word is their leaning towards the company that built the last 'parks and services' complex. The same complex the new one is supposed to replace because the old one is 'inadequate.'

I'm sure there's a joke about the status quo there, but I'm too lazy to find it.

[alicat]

I readily admit I really don't know much about or understand politics. I do understand the value of money though. How in the hell is it sanely possible to justify over 25 million dollars to transport a measly $82,000 worth of fuel?!

Give me all the complication's that could arise in that transport and I still can't conceive it costing more than a small fraction of the amount Halliburton billed our government (I'll even entertain the amount of a MILLION dollars to move $82,000 worth). And, it's our countries government being billed. Shouldn't they have the best legal minds available to pour over the books and find a law that says it's illegal for Halliburton to fudge the costs and over-bill? Come on, this is absolutely rediculous.

All I can think of is, like someone else sort of said, Big Business has got our leaders in their hands. "We the little people" think that we are still going along hunky-dory and yet the people we elect into office are then free to try what they may and only their peers are there to halt them. Once they are in office, they no longer really need to pander to us "little people", only the "BIG people" that financed their ascent. Since they are all already elected and in office for their term, they answer to each other, not the people that put them in office, which is the majority of the countries populous. Before anyone jumps on me, as I said, I don't know much about politics at all. Therefore, these are my thoughts as a relatively, politically ignorant person, yet still a citizen of this country that has an opinion and vote.

Given the amount of the national debt and the issues of medicaid, health-care, social-security, poverty or any other large problem in our country, I just can't fathom how those in our government can pay this outragious bill when $20+ million could make a bit of a dent on any of the things I just mentioned. Maybe not a huge dent, but this topic has caused me to wonder just how many other bullshit bills are out there not in the public eye, that our government pays without a second thought that contribute to the national debt and the lack of funds for things that need to be fixed. And what the cumulative amount might be every year.

Ali

[BigBen]

Okay, I am not justifying anything here. I just want to re-introduce the line of thought that I originally posted on the thread "1000 percent?"

Numbers, statistics and graphs are bullshit. If you think that BIG BUSINESS is fleecing the government for services provided in a hostile environment, you are certainly correct. I see this post and ponder why the Juggernaut has not planned for this event and procured a fast-response refuelling team. To ensure that fuel reaches critical units in a timely fashion, there should be a stand-alone unit ready to deploy with those supplies.

There is the old joke about the accountant who answers the question “What is 2+2?” with the response “What do you want it to be?”

What we have here (Along with those 5000 dollar toilet seats, thank you) is creative bookkeeping by anti-Halliburton lobbyists. I swear, any proper accountant is able to turn a toilet seat or a litre of propane into something huge. Try this on for size:

1. Deferred payments, accounts payable, schedule timing; If I pay you for something that you have yet to deliver, I can push those expenses into another fiscal year. Ethical? No. Is Halliburton supposed to deliver MORE FUEL in the future? Then it is likely that all of the expenses were pushed into the first delivery.

2. Other expenses that are “accidentally accounted for”; Does Halliburton have a good pension and health care plan? Then a lobbyist could un-ethically bring those expenses into the fuel contract, whether they belong there or not. Example…

LOBBYIST: “You pay your people 2 dollars on average in benefits for every widget you produce. The contract you procured from the federal government was for 5 million widgets. Therefore, you have charged the government 10 million dollars in benefits for your contract.”

CONTRACTOR: “The contract was to supply 5 million widgets for 5.1 million dollars. We are supplying at cost, and doing so to relieve excess capacity in this fiscal quarter. How can you say we charged someone something using our average numbers, costs, profits, or expenses?”

LOBBYIST: “WHAT ARE YOU TRYING TO COVER UP?!?”

3. Global contracts and the difference between PRIMARY and ANCILLARY services: If the government has a contract with supplier A for a bundle of goods, properly tendered and accounted for, it is easy for the lobbyist to charge that one of those goods in the bundle is being overcharged. If I am giving you goods A, B and C and services X, Y and Z for the fixed price of 10 dollars, who are you to say that I am overcharging you on service Y because you can get that service elsewhere for 1 dollar? You are ignoring the overall contract, and the possible (nay, probable) savings elsewhere.

4. If this story is true, completely and utterly, then I have one last fallback argument:

I’d rather pay someone else money to deliver an explosive substance in a war zone. Fuck it. I could care less how much it costs. Seriously. This is coming from a guy who has had a few close calls in uniform.

[hawker rider]

Well I feel that everybody that feels this is grossly wrong.

Be the first one to volunteer for the next trip! these people truly do run enormous risks, and I hope everybody realizes that Haliburton has has percentually more casulaties than the allied forces over there..... food for thought.

I agree it is a lot, but don't underestimate the risks involved

[alicat]

Hawker rider: The difference is that the people of our armed services that are dying in Iraq are there because they support their country and are patriotic. Granted, some of them signed up before the war and didn't count on going to war or active duty. None-the-less, they all knew what they were getting into when they joined, and they joined in spite of that knowledge.

On the other side of the coin, Halliburton is a business-not our government. The people working for them are just that, employee's. Not soldiers. Halliburton exists to make money, nothing else. I have no sympathy for people who die over there because they chose to work for a corporation that sent them to their deaths for "financial gains". Yes, the company probably paid well. So they put their lives on the line for money rather than take a job at McDonald's that isin't nearly as glamorous or profitable. And now I'm supposed to feel bad for them because they couldn't possibly bring themselves to work a menial job like a whole hell of a lot of American's do?

Not one single American that has died in Iraq that was there because of a private company, needed to be there or die. I feel bad that they have died and I feel sad for their families but I still feel their deaths wouldn't have happened if they had said "no, I won't go over there."

One of the saddest moment's I can remember from this war was when David Bloom died. I really liked and respected him and i was shocked and cried when he died. However, I still stand by my point, he most likely wouldn't have died at such a young age if he had not been in Iraq.

Ali

[Seanland]

How Do you put a Price on someone's life?

"Halliburton has seen 61 of its workers and subcontractors die in Iraq and Kuwait, many while delivering fuel."

is $27 Million that price? Compensation?

[hawker rider]

Well Alicat, It saddens me that people are thinking the way you do. So it's very easy to point with teh finger and tell people they brought it on to themselves by their own choices.

If nobody would do anything would this world ever become a better place for our children? looking the other way doesn't make any problem go away. As far as people joining the army and "not signing up for war" well that's a little strange you say something to that extent. What do most people think an army does? Making a choice of joining the armed forces also means that in case of war you agree to be send out


I truly do feel sorry for their families, but I do commend them for standing by their loved one, for him/her to make this world a better place. AS it already is a lot better place with Saddam not in charge in Iraq anymore!