More Flak on Halliburton Deal
WASHINGTON — The Pentagon's exclusive no-bid contract with a Halliburton Co. subsidiary for emergency oil-field services in Iraq could be worth as much as $7 billion over the next two years, according to a document made public Thursday.
The disclosure gave fuel to critics of the deal, who said a contract that large should have been put out for open, competitive bidding.
"I was surprised about the size of the contract and the fact that they're not going to have competitive bidding," Rep. Henry A. Waxman (D-Los Angeles) said Thursday.
"I didn't know we were talking about a contract of this magnitude."
The $7-billion ceiling was revealed in a letter to Waxman from Lt. Gen. Robert B. Flowers, the commanding general of the Army Corps of Engineers. Flowers called the amount "an estimate of worst-case damage" from oil and gas fires in the war-torn country. Flowers noted in the April 8 letter that the Houston-based energy giant and its subcontractors were authorized to spend $50.3 million in the first month.
In a March 26 letter seeking more information about the deal from Flowers, Waxman expressed concern that the contract was awarded in secret and could range into the "tens of millions" of dollars.
In public statements, the Army Corps has downplayed the size.
"This is not going to be a huge dollar contract
In fact, only eight oil and gas wells and pipelines have been set ablaze in Iraq. All but one fire have been extinguished either by subcontractors or by Kuwaiti Oil Co. firefighters.
But in a written response to Flowers on Thursday, Waxman questioned the decision to set the ceiling so high before officials had an idea of what the scope of the work would be.
"Why did the Army Corps issue a two-year, $7-billion contract to perform work that is intended to be short term and limited in nature?" Waxman asked.
"It may be the case that the administration had valid reasons for granting a sole-source contract for emergency work during armed hostilities," he continued. "It is harder to understand, however, what the rationale would be for a sole-source contract that has a multi-year duration and a multibillion-dollar price tag. Yet this appears to be the type of contract that was awarded."
Flowers' office didn't return calls for comment.
Waxman and Rep. John D. Dingell (D-Mich.) recently called for an investigation into whether Halliburton and its subsidiary received favored treatment in the awarding of the contract.
