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Published: Monday, 7/17/2006

Such a deal

After years of awarding no-bid contracts worth billions of dollars to a Texas-based oil services conglomerate, the U.S. Army says it's ending its exclusive deal with Halliburton subsidiary Kellogg Brown & Root.

American taxpayers are entitled to ask the obvious question: What took so long?

The Bush Administration has been under fire from the beginning of the Iraq war and before then for the company's highly lucrative and enormously contentious contract with the Army.

Only Halliburton, once led by Vice President Dick Cheney, was given exclusive rights to perform jobs like deliver food and fuel and construct housing for U.S. troops around the world.

Only Halliburton and its subsidiaries were singled out for no-bid logistics contracts in 2003 and 2004 and paid more than $10 billion.

Since late 2001 the company has received more than $15 billion for its services, which have persistently been dogged with allegations of fraud, poor quality, overpricing, and other abuses.

The Army explained its overdue decision to discontinue the controversial Halliburton contract as part of the Army's "lessons learned" process. Spokesman Dave Foster related how the Army lives on "lessons-learned":

"There's discussion under way that there may be - may be - a better way of doing this" [awarding contracts], he said. "If you open it up to as many as three bids, that offers more open competition."

The sudden realization that requiring military contractors to compete aggressively for work could result in lower prices and higher accountability is stunning.

The Pentagon apparently has a lot more lessons to learn about managing cost and quality than taxpayers ever imagined.

All this time a single contractor had the government over a barrel with reported price gouging, but launching a new contracting scheme with the defense sector never occurred to the Army.

The change finally comes after government auditors and Democrats in Congress have leveled new accusations against Halliburton for potential overcharges for fuel, dining, and laundry services.

A disgusted Sen. Byron Dorgan of North Dakota said "I believe literally hundreds of millions, and probably billions, of dollars have been wasted. It's almost an unbelievable amount of waste and abuse and likely fraud."

The Pentagon's new plan to solve the problem and eliminate exclusivity in awarding contracts will be launched late this year. Halliburton, which has stood by its work, said it might bid under the new government structure.

No lessons learned there, but at least they'll face competition.



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