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The contract also allows the subsidiary, Kellogg Brown Root, to receive as much as a 7 percent profit. That could amount to $490 million. The Army Corps of Engineers released the details in a letter Thursday to Representative Henry Waxman, Democrat of California, one of two senior lawmakers who had asked the General Accounting Office to investigate how the Bush administration was awarding contracts for the reconstruction of Iraq. The reconstruction effort could cost $100 billion and be one of the most lucrative building programs in decades. The contract to Kellogg Brown Root was cited in the lawmakers' request to the General Accounting Office, the investigative arm of Congress. Waxman and Representative John Dingell, Democrat of Michigan, asked that special attention be paid to "allegations that Halliburton has received special treatment from the administration." Vice President Dick Cheney was chief executive of Halliburton from 1995 until 2000. When he left the company to run for vice president, Cheney received more than $30 million in compensation, Waxman said. Since the terrorist attacks of Sept. 11, 2001, Kellogg Brown Root has won significant additional business from the federal government and the Defense Department. It has built cells for detainees at Guantanamo Bay in Cuba and is the exclusive logistics supplier for the U.S. Navy and the U.S. Army, providing services like cooking, construction, power generation and fuel transportation. Since the war with Iraq began March 20, Cheney has been repeatedly questioned about his ties to his old employer and the oil industry. But the Bush administration said the contracts and all other contracts to rebuild Iraq had been awarded without any comment from Cheney or anyone else in the White House. "The White House has no role in selecting individual contractors," said Michael Anton, a spokesman for the National Security Council. Robert Flowers, a U.S. Army lieutenant general and the commander of the Corps of Engineers, wrote in his letter that Kellogg Brown Root had been chosen because it was the only contractor considered capable of developing what he called "complex, classified contingency plans" and carrying them out "on extremely short notice." "No other contractor, " Flowers wrote, "could satisfy mission requirements in the time available." He also said the Defense Department could not follow public procedures for awarding the contract, including a public notice, because the war plans and the need to fight oil fires in Iraq were then classified information. In the future, however, Flowers promised "ample opportunity for competition" to restore Iraq's oil infrastructure. The most sought-after contract will be awarded by the U.S. Agency for International Development and will cover the initial work to rebuild Iraq's roads, water and power systems, schools, and hospitals. Bidding for this work has been restricted to five American companies for the same reasons that Kellogg Brown Root won its contract without any competition: the need for speed and for security clearances. But specialists on government contracts assert that those needs have been exaggerated and that they may violate international trade agreements as well as federal rules. Waxman, the California congressman, responded to the letter from Flowers with several new questions. While accepting that the administration may have had valid reasons for giving the two-year contract to Kellogg Brown Root for emergency work during the war, Waxman wrote, "It is harder to understand, however, what the rationale would be for a sole-source contract that has a multiyear duration and a multibillion-dollar price tag." He asked Flowers in a letter Thursday how the U.S. Army had determined the cost of the work to be done by Kellogg Brown Root and when the U.S. Army would replace the current contract with one that was subject to competition. Copyright © 2003 The International Herald Tribune |