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GAO finds Pentagon violated law by hiring Halliburton for pre-war planning work

WASHINGTON, June 15, 2004 (HalliburtonWatch.org) -- The auditing arm of Congress issued a report today confirming that the Pentagon had violated procurement law by issuing a "task order" to Halliburton to develop plans for extinguishing oil well fires in Iraq. The report, issued by the General Accounting Office (GAO), said the task order violated the law because it was issued under Halliburton's LOGCAP contract, which is not authorized to handle oil fires. LOGCAP is a logistics contract that requires Halliburton to feed the troops, deliver supplies in a war zone and construct military buildings. But there is no authority under LOGCAP to deal with oil well fires. The GAO said Bush administration officials �overstepped the latitude provided by competition laws� when they misused the LOGCAP contract to assign the planning job to Halliburton.

In addition, the GAO found Iraq contracts worth billions of dollars were not awarded under full and open competition. All 14 of the contracts the GAO examined, including Halliburton�s no-bid oil infrastructure contract and Bechtel�s billion-dollar capital construction contract, were awarded with limited or no competition.

Halliburton's task order was the precurser which ultimately led the Pentagon to award a no-bid Iraqi oil infrastructure contract to Halliburton in 2003, which the GAO said today was awarded lawfully. The contract sparked outrage in Congress because it was awarded to Halliburton without considering whether the company's competitors could perform the contract better and cheaper. Under pressure from Congress, the Pentagon subsequently cancelled the contract and, in January 2004, awarded another oil infrastructure contract to two companies, one of whom is Halliburton. The new contract, worth up to $1.2 billion, requires Halliburton to rebuild the oil infrastructure in southern Iraq.

The GAO's report, titled �Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and Management Challenges,� was discussed at the House Committee on Government Reform on June 15.

More Information

Summary of GAO report (pdf file)
Full GAO report (pdf file)
Testimony of GAO official who wrote the report (pdf file)
Response to the GAO's report by Minority Staff Committee on Government Reform (pdf file)