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By DAVID PHINNEY
Poor planning by the Army before the invasion of Iraq led to
recurring problems with a multibillion-dollar contract for
military support services, says a congressional report.
Executives with the support services contractor --
Halliburton subsidiary KBR, formerly known as Kellogg Brown
& Root -- defended the company’s performance at a
hearing the day after the July 21 report was released. But
former employees who had worked in
Iraq
and
Kuwait
testified the company engaged in reckless spending and
sloppy accounting methods that led to frequent overcharges
to the government.
Released by the investigative arm of Congress, the
Government Accountability Office, formerly the General
Accounting Office, the report singled out numerous problems
with Halliburton’s work in providing services to U.S.
troops deployed in Iraq that, in part, stemmed from
ineffective planning before the war followed by a
“piecemeal” plan after the fall of Baghdad in May 2003.
Under the massive, 10-year contract, known as the Logistics
Civil Augmentation Program, or LOGCAP, KBR is expected to
deploy anywhere in the world and provide the military with
food, housing, camp maintenance and transportation of
supplies.
The Army and Defense Department share in the blame for the
problems KBR faces because of poor advance planning, the
report said. “The Army Central Command did not develop
plans to use the contract to support its military forces in
Iraq
until May 2003, even though Army’s LOGCAP guidance calls
for early planning and early involvement of the
contractor,” the report said.
The lack of foresight led to frequent changes in work orders
by the Army. From September 2002 through December 2003, the
task orders for troop support in
Kuwait
changed 18 times, while the work order in
Iraq
changed seven times, the report said. That, in turn, would
cause abrupt changes in what was expected from the company.
Recurring contractor problems such as poor cost reporting,
difficulties with meeting schedules, and weak oversight of
purchasing also made the LOGCAP contract more difficult to
administer.
“A more deliberate approach” would have yielded “a
better product at a lower cost,” GAO said.
GAO echoes other government investigations, faulting
Halliburton for staffing problems, an antiquated accounting
system, inaccurate cost estimates, improper records for
billing, and work that frequently missed schedules.
At the July 22 hearing before the House Government Reform
Committee, Halliburton executives reminded lawmakers that
their employees are under attack every day in
Iraq
. Forty-two KBR workers have lost their lives, another 93
have been wounded and others have been kidnapped, Alfred
Neffgen, KBR chief operating officer for government
operations, told the committee.
“In these conditions the military assigned us jobs like
bringing in millions of gallons of fuel for the military,
feeding the troops and transporting critical military
supplies,” Neffgen said. “We are accomplishing this
mission.”
Three former KBR employees who also testified told a
different story. They accused company managers of rarely
performing oversight of subcontractors and being
ill-prepared for providing logistical support on such a
large scale.
Assigned to LOGCAP in Kuwait, former Army Capt. Marie
deYoung said she was tasked with bringing expired
subcontracts up to date and was asked to address other
problems that made it difficult to provide services to the
troops.
Four months after taking the job in December 2003, she
concluded that poor contracting skills were evident in every
phase of the company’s work. Laundry services were
contracted for $100 per 15-pound bag and Halliburton staff
was staying in
Kuwait
’s five-star Kempinski hotel, she said.
“It’s not surprising that I observed significant waste
and overpricing,” deYoung said. “I tried to correct some
of these practices, but the Halliburton corporate culture is
one of intimidation and fear.”
A former truck convoy commander in
Iraq
, David Wilson, complained that KBR ignored basic
maintenance of Volvo and Mercedes trucks. Vehicles with a
flat tire or other minor failure were regularly abandoned or
torched at the side of the road.
KBR executives said that laundry needs for the troops were
initially overestimated and that a contract was quickly
renegotiated.
“KBR takes seriously the matters of controlling costs,”
said William Walter, KBR director of government compliance.
“We are proud of our record as a federal contractor.”
KBR regional project manager for transportation in
Iraq
, Keith Richard, said that abandoning trucks was a decision
made by the Army.
“The Army, not KBR, makes all decisions regarding whether
to halt a convoy to fix a truck or to abandon it,” he
said. “Those judgments are made on an assessment of how to
save lives.”
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