WASHINGTON (AP) – Halliburton’s contract to restart Iraq’s oil production has doubled in cost over the past month, and the no-bid work may last longer than expected, the Army says.
The expanded role awarded to Vice President Dick Cheney’s former company cost taxpayers $184.7 million as of last week, up from $76.7 million a month ago, the U.S. Army Corps of Engineers confirmed this week.
The Corps, which issues noncompetitive work orders under the contract, initially had estimated that a replacement contract would be awarded through competitive bidding by August. It now is backing off that estimate.
There may be no second contract if the oil restoration mission is completed before another company can take over, or if the Iraqis make their own arrangements for additional help, the Corps said.
“We’re not going to try to discuss a specific timetable,” a Corps spokesman, Lt. Col. Eugene Pawlik, said. Asked about the Corps’ earlier August estimate, Pawlik said, “I would be very surprised if that would be in the timetable, with all the requirements that are out there.”
Several members of Congress have invoked Cheney’s name to raise the hint of favoritism in a contract originally described as a bridge between emergency repair and longer-term assistance to restore full oil production.
Cheney’s office repeatedly has said he had no role in the award, which was given to Halliburton’s KBR subsidiary. Cheney left the company in August 2000.
Halliburton’s spokeswoman Wendy Hall said, “KBR is proud to assist with the restoration of Iraq’s oil infrastructure.”
The Houston company’s oil industry assistance in Iraq is only part of the more than $600 million in military work received by Halliburton in connection with the wars in Iraq and Afghanistan.
As the Army’s sole provider of troop support services, KBR has received work orders totaling more than $500 million under a 10-year contract with no spending ceiling.
Rep. Henry Waxman, D-Calif., the chief House critic of the Halliburton oil contract, reminded the Corps in a letter last week that the Army expected to advertise for bids by the spring or early summer.
Writing to Lt. Gen. Robert B. Flowers, the Corps commander, Waxman asked whether the Corps “has done an about-face and is poised to give additional benefits to Halliburton under its no-bid contract.”
Waxman cited a Dow Jones news story in which Gary Loew, planning director for the Corps oil restoration project, said there might not be time to award a second contract and still meet deadlines for restoring the industry.
Flowers responded that the Corps was moving ahead with plans for a replacement contract “if needed.”
He also said the Iraqis had the choice of obtaining services elsewhere. “The competitively awarded contracts will be one of the many sources available to the Iraqi management team; the Iraqis will not be required to make use of the contracts,” Flowers said.
Flowers contended KBR was the only practical choice when, in February, the Corps was given the prewar contingency mission of keeping the Iraq oil industry afloat after fighting ended.
“With only weeks to be prepared to execute, full and open competition was not feasible,” Flowers said.