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THE US Army is discontinuing a controversial multibillion-dollar deal with the oil services giant Halliburton to provide logistical support to American troops worldwide, a decision that could cut deeply into the firm's dominance of government contracting in Iraq.

The decision comes after several years of attacks from critics who saw the contract as a symbol of politically connected corporations profiteering on the war.

Under the deal, Halliburton had exclusive rights to provide the military with a wide range of services that included keeping soldiers around the globe fed, sheltered and in communication with family back home.

Audits turned up more than $US1 billion ($1.3 billion) in questionable costs. Whistleblowers told how the company charged $US45 for a case of soft drinks, double-billed on meals and allowed troops to bathe in contaminated water.

Halliburton officials denied the allegations strenuously. Army officials defended the company's performance, but acknowledged that reliance on a single contractor left the US vulnerable.

The Pentagon's new plan will split the work among three companies, to be chosen soon, with a fourth firm hired to help monitor the performance of the other three. Halliburton will be eligible to bid on the work.

The decision on Halliburton comes as the US contribution to Iraq's reconstruction begins to wane, reducing opportunities for US companies after nearly four years of huge payouts to the private sector.

The Iraqi Government will have to find its own contractors to do the work, including a large number of projects left undone by the US. The US Inspector-General's office has repeatedly warned of a "reconstruction gap" between what the US promised in rebuilding the country after the invasion in 2003 and what it has delivered. For instance, a contract aimed at building 142 new health centres instead produced a mere 20 before the program ran out of money.

No contractor has received more money as a result of the invasion than Halliburton, whose former chief executive, Dick Cheney, is now US Vice-President.

Logistics work is carried out by a subsidiary, Kellogg Brown & Root Services.

Last year, the US Army paid out more than $US7 billion for the Iraq contract. This year the amount will be as much as $US5 billion. Halliburton initially won the contract in 2001.

The Iraq contract had expanded "beyond what anyone could have imagined", said Dov Zakheim, the Pentagon's comptroller from 2001 until 2004 and now a vice-president at the consulting firm Booz Allen Hamilton.

The bidding on the new contract is likely to attract some prominent suitors, including the weapons makers Lockheed Martin.

"They are among the biggest government services contracts that have ever been created," said Loren Thompson, of the Lexington Institute think tank. "Most of the big, integrated defence contractors recognise that new sales of military hardware are going to be hard to come by in the years ahead. There's a general migration to services."

frigidmagi wrote:Cpl I expect better from you. They got to find replacements for them first, they got to make sure that the replacements can do a better a job and they got to make sure that the replacements are set up and ready to go. This takes time. Logistics, Cpl, Logistics.

You have to understand that for a Canadian the thought of having an outside company do this is somewhat strange. Until this tour in Afghanistan most of the services provided to a Canadian Battlegroup where either provided by the soldiers themselves, locals under the supervision of soldiers or PSP also under the supervision of soldiers. Having a company completely outside the military come and purify water for us is unheard of.

frigidmagi wrote:
You're right, forgive me. Truth be told this is a new system in the US to, it's the product of Clinton's budget cuts and the increasing demands on the armed forces. No I'm not blaming Clinton for Halliburton, that lies solely with the people who hired them without even allowing opposing bids. But with drastic cuts in personnal (7 divisions, almost half of the army gone, solders and sailors who wanted to stay in sent home and told to get civilian jobs...) and expanding roles (Bosnia, Solmalia, East Timour, etc) along with having to maintain old deployments (Europe, Japan, Korea) the military took steps to increase the number of front line personalle available. For example when I entered the Marines, there were 4 or 5 MOSes that basically tranlated to cook. When I left, there was 1 and they were talking about getting rid of that and giving it to civilian workers.

While I don't blame the Clinton Government for making cuts in the size of the army, navy and air force, both Clinton and Jr. have asked us to do more with less. Either some old deployments must be given up (what are we defending Europe from anyways?) or things like this will continue as the Pentagon does everything in it's power to create more frontline troops without increasing the size of the military.