I wonder how much body armor 72 million dollars would buyArmy said on Tuesday it had awarded $72 million in bonuses to Halliburton Co. for logistics work in Iraq but had not decided whether to give the Texas company bonuses for disputed dining services to troops.
Army Field Support Command in Rock Island, Illinois, said in a statement it had given Halliburton unit Kellogg Brown & Root ratings from "excellent" to "very good" for six task orders for work supporting U.S. troops in Iraq.
The Army said its Award Fee Board in Iraq had met in March and had agreed to pay KBR bonuses for work it did in support of U.S. forces there.
But it said dining facility costs questioned by auditors from the Defense Contract Audit Agency had not yet been considered by the military's Award Fee Board.
The Army said it could not immediately provide more details on when the dining fee bonuses would be resolved.
Much of Halliburton's work for the U.S. military, ranging from building bases to delivering mail, is on a cost-plus basis, which means the company can earn up to 2 percent extra depending on its performance.
Bonuses are awarded based on, among other factors, how efficient and responsible the company is to requests from the Army and is an indicator of how the Army views KBR's performance in the field.
KBR's logistics deal with the U.S. military has been in the spotlight from the outset in Iraq, with allegations by auditors that they overcharged for some work, including dining services.
In addition, investigators are looking into whether the Texas-based firm charged too much to supply fuel to Iraqi civilians, a claim the firm says is not justified.
Halliburton, which was run by Vice President Dick Cheney until he joined the 2000 race for the White House, has earned more than $7 billion under its 2001 logistics contract with the U.S. military.
Army rewards Halliburton for overcharging taxpayers
Army rewards Halliburton for overcharging taxpayers
http://www.msnbc.msn.com/id/7806065/
Every government contract is a race for how much can be tossed into the "overhead" pot. In addition because of Federal Acquisition Regulation (FAR) streamlining as part of OBRA 93, virtually all Federal contracts are on a cost plus basis. Oddly enough cost plus contracts are designed to incent the contractor to save money. The budget is negotiated prior to the beginning of the fiscal year, monthly cost reports are filed, and at year end the final expenses are filed. Based on the actual savings compared to budget the contractor receives a bonus. More often than not the initial budget estimates are inflated and usually signed off on by a low level desk jockey that is getting some graft from the contractor.
You all have heard of the $500 hammer right? Well the reality is the hammer itself probably didn't cost the government much more or less than retail. The price inflation comes from all the overhead charges the contractor adds on to the contract. All contracts these days per the FAR have administrative costs applied as pure variable expenses. However back when the hammer story came up the contractor in question (Lockheed I think) was required to apply a fixed overhead charge to all orders it filled. The hammer order was an anomaly that got a lot of press, as did a few other notable ones. The $1000 toilet seat from Hamilton Standard was another one that got a lot of press, but that was actually not just a seat but a zero-G toilet system for the shuttle.
It's a crappy corruption ridden system, but there haven't been any more viable ideas floated in the past 20 years.
LOL rereading this I know way too much about the inner workings of Federal contracting.
You all have heard of the $500 hammer right? Well the reality is the hammer itself probably didn't cost the government much more or less than retail. The price inflation comes from all the overhead charges the contractor adds on to the contract. All contracts these days per the FAR have administrative costs applied as pure variable expenses. However back when the hammer story came up the contractor in question (Lockheed I think) was required to apply a fixed overhead charge to all orders it filled. The hammer order was an anomaly that got a lot of press, as did a few other notable ones. The $1000 toilet seat from Hamilton Standard was another one that got a lot of press, but that was actually not just a seat but a zero-G toilet system for the shuttle.
It's a crappy corruption ridden system, but there haven't been any more viable ideas floated in the past 20 years.
LOL rereading this I know way too much about the inner workings of Federal contracting.
On the one hand; there probably aren't that many companies that the US could trust to provide the services, at any cost.
On the other; Cheney and friends are more interested in money and power than any Iraqi they might "liberate".
On the other; Cheney and friends are more interested in money and power than any Iraqi they might "liberate".
May 2003 - "Mission Accomplished"
June 2005 - "The mission isn't easy, and it will not be accomplished overnight"
-- G W Bush, freelance writer for The Daily Show.
June 2005 - "The mission isn't easy, and it will not be accomplished overnight"
-- G W Bush, freelance writer for The Daily Show.
Being a contractor in the DC area, but on the building side, I can say that this is fairly normal for a cost plus job. Relativelly speaking of course. If I have a "cost plus not to exceed" contract of 100 million, and I do all the work for 80 million, there is almost always a clause in the contract where I will also retain a share of the portion of the money saved...usually around 10 to 20%.
So, I would assume that Haliburten spent around 750 million less than what they originally budgeted for the work.....or Bush is pullilng a fast one on the taxpayers.
Either way, that article does not go into detail about where the money is coming from. If it is as I spelled it out in the first paragraph, then I'm cool with it, because I take advantage of that exact same thing.
So, I would assume that Haliburten spent around 750 million less than what they originally budgeted for the work.....or Bush is pullilng a fast one on the taxpayers.
Either way, that article does not go into detail about where the money is coming from. If it is as I spelled it out in the first paragraph, then I'm cool with it, because I take advantage of that exact same thing.
cost plus with incentive contracts are pretty fucking rare (ie. never) for no-bid contracts. what is the point? the whole point of a cost plus contract is to see who will do the best job for the cheapest amount.
the $500 hammer paradigm was generally thought to be how the CIA and other organizations cook books for slush funds and other things?
the $500 hammer paradigm was generally thought to be how the CIA and other organizations cook books for slush funds and other things?
The point of a cost plus contract is to incent the contractor to spend significantly less than their budget. And yah, the Federal Government has standardized on these contracts subsequent to the Omnibus Budget Reconciliation Act of 1993 for not only ongoing, recurring, administrative services contracts (such as Medicare, or KBR support services) and one-time contracts for large capital projects, bid and no-bid alike.kyoukan wrote:cost plus with incentive contracts are pretty fucking rare (ie. never) for no-bid contracts. what is the point? the whole point of a cost plus contract is to see who will do the best job for the cheapest amount.
Now that's squarely in the realm of conspiracy theoryland.kyoukan wrote:the $500 hammer paradigm was generally thought to be how the CIA and other organizations cook books for slush funds and other things?