Controversy

WASHINGTON (AFP) - The US army came under fire for granting an Iraqi oil well
firefighting contract to a subsidiary of Halliburton Co., once run by Vice President Dick Cheney
(news - web sites), without a bidding process.

Henry Waxman, the senior Democrat in the House of
Representatives' government reform committee,
demanded an explanation in a letter to Army Corps of
Engineers Lieutenant General Robert Flowers.

"I am writing to inquire why the administration entered into
a contract potentially worth tens of millions of dollars to a
subsidiary of Halliburton without any competition or even
notice to Congress," he said.

"The contract -- to extinguish oil well fires in Iraq (news -
web sites) -- has no set time limit and no dollar limit and is
apparently structured in such a way as to encourage the
contractor to increase its costs and, consequently, the costs
to the taxpayer."

The Army Corps of Engineers said Tuesday the contract
had been given to Halliburton subsidiary Kellogg, Brown
and Root (KBR) without being put out to tender.

KBR had already been asked by the Pentagon (news - web
sites) to draw up plans for extinguishing oil well fires in
Iraq, Corps spokesman Lieutenant Colonel Gene Pawlik
said.

"It made the most sense to engage them in the near term
as the company to get the mission done because they
were familiar with the details of the fires themselves and
what would be needed," he said.

The value of the contract would depend on the scale of
the work.

KBR would claim the cost of its services plus two to five
percent depending on how it executed the job, Pawlik said.

"This type of contract is generally discouraged in the executive branch because it provides the
contractor with an incentive to increase its profits by increasing the costs to the taxpayer,"
Waxman said.

The contract was particularly troubling because the government oversight office, the General
Accounting Office (news - web sites), had previously raised concerns about the army's ability to
monitor costs at KBR, he said.

The only rationale for delivering the contract to KBR appeared to be that KBR had drawn up
a plan for fighting the fires, Waxman added.

"Why did the administration fail to provide an opportunity for other companies to bid on this
contract?" he asked.

"When Kellogg, Brown and Root was asked by the army to develop a contingency plan for
extinguishing oil well fires in Iraq in November 2002, were any other companies asked to
develop similar plans? If not, why not?"

Waxman asked why the contract was not announced until two weeks after it had been awarded
on March 8.

He requested an answer by April 4.

Cheney was chief executive of the KBR parent company Halliburton, a major oil services
company, for five years until 2000.

KBR said it had teams of well control and engineering contractors preparing
the initial phase of the firefighting effort.

The company was given a free hand to choose subcontractors for the work,
the Corps spokesman said.

KBR chose Houston-based Boots and Coots International, with which it has
a services and equipment partnership, and Wild Well Control Inc. as
firefighting subcontractors.

US President George W. Bush (news - web sites) asked lawmakers on
Tuesday to approve some 3.5 billion dollars in aid to get Iraq back on its
feet, including nearly half a billion for oil field repair.

The chief of Britain's armed forces, Admiral Sir Michael Boyce, said Friday
that Iraqi forces had set fire to seven oil wells in the south of the country.