Halliburton Whistleblower Cut Out of Contract Procedures

The Army Corps of Engineers violated procurement rules in negotiating its contract with the Halliburton Corporation in early 2003, according to the Corps's chief contracting officer -- Bunnatine Greenhouse. She asserts that after expressing numerous objections to Halliburton contracts, she was threatened with demotion and was pressured to approve the contracts by her superior. Headed by Dick Cheney until he was elected U.S. vice president in 2000, Halliburton was initially awarded a five-year contract to protect Iraq's oil assets. The Corps granted the $7-billion contract to Halliburton without competition, claiming the war necessitated an expedited process. A public outcry forced the Pentagon to cut this contract short after nearly a year had elapsed and $2.4 billion of the contract had been executed. The remaining work was put up for bid. Greenhouse objected to Halliburton's role in both planning and implementing the 2003 contract, tasks usually distributed to two separate firms. Greenhouse also opposed the presence of Halliburton subsidiary Kellogg Brown & Root (KBR) officials at the meeting where the decision to award KBR the no-bid contract was made. Traditionally, the government uses bidding to ensure fair prices and to avoid waste. In addition to criticism from contracting officials, U.S. Army Corps of Engineers' dealings with Halliburton have drawn scrutiny from the Federal Bureau of Investigation (FBI). After Halliburton entered into Iraq and discovered minimal damage to oil wells, the Army shifted the contract from protecting oil assets to covering the transport of gasoline, kerosene and other fuels into the country for daily use by the Iraqi people. The Pentagon's inspector general and the FBI are conducting criminal investigations into allegations Halliburton overcharged the Army by as much as $61 million by refusing to use cheaper fuel suppliers. Another Halliburton contract has drawn the FBI's attention after the abrupt cancellation this past summer of a competitive process to award a follow-up contract to one Halliburton received competitively in 1999. Halliburton received the follow-up contract to provide food, fuel and logistics to U.S. troops in the Balkans through April 2005. The Pentagon awarded the contract without competition, and without Greenhouse's approval.
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