Peacekeeping Helped Cheney Company
By Karen Gullo, Associated Press Writer Monday, Aug. 28, 2000; 3:25 p.m. EDT
WASHINGTON — The company run until this month by former Defense Secretary Dick Cheney has reaped more than $2 billion in federal contracts to support U.S. troops on some of the peacekeeping missions that George W. Bush says have helped run down the military.
U.S. deployments in Bosnia, Kosovo, Somalia and elsewhere – the kinds of missions Bush has pledged to reduce if elected – have meant big contracts for Dallas-based Halliburton Co., which Cheney, the GOP vice presidential candidate, headed from 1995 until he retired two weeks ago.
What started out as a $4 million contract in 1992 to help the government plan how to provide meals, tents, toilets and laundry for troops sent on missions to far-flung lands has grown substantially for Halliburton, an oil-services conglomerate.
Halliburton’s Brown & Root Services subsidiary has received the lion’s share of the Pentagon’s troop support business in the years since the Persian Gulf War, which Cheney helped direct as secretary of defense under Bush’s father.
A big chunk of the business came in 1995 when troops were sent to Bosnia. The Army paid Brown & Root $546 million to provide logistical support for over 20,000 American soldiers in Bosnia, Croatia and Hungary. The company had already earned $269 million on the contract.
Two years later Brown & Root received a sole-source contract worth $405 million to continue support services in Bosnia. Last year the company beat out one other bidder to win a five-year Army contract to support U.S. peacekeeping troops in the Balkans region. Originally awarded for $900 million, work under that contract has now reached $730 million and could go to more than double that figure because more troops were sent to Kosovo last year.
Another contract for support services awarded this year by the Navy will bring in at least $300 million.
The government has hired Halliburton for dozens of other jobs, from a $100 million contract to improve security at U.S. embassies and consulates to a $40 million contract to maintain labs at the National Institutes of Health.
Brown & Root and Army officials say the company won the logistics contracts fair and square.
“There’s no doubt Dick traveled around the world and had an impact on our global business,” said Larry Pope, president of Brown & Root. But in deals with the U.S. government, Cheney didn’t have any direct bearing on the awards, he said, adding that Brown & Root doesn’t have a lock on the business – it has lost a few federal contracts to competitors.
Brown & Root was given the sole-source contract in May 1997 to continue supporting troops in Bosnia because the Army decided it would be cheaper to keep the same contractor than find a new one, said Capt. Joan Kibler, spokeswoman for Army Corps of Engineers, which awarded the contract.
Brown & Root has worked for the government for years; it did construction work for the military during the Vietnam War. But a surge in U.S. troop deployments and the Pentagon’s growing reliance on private companies to provide logistics services have been a boon for Brown & Root.
“The current administration helped set the course for them to build the business,” said Maj. Joe Bigelow, spokesman for the Army, which has given the company more than $1 billion in business since 1998. “Five years ago there was no Bosnia or Kosovo.”
This past weekend, Cheney said the military has “too many commitments” for the size of U.S. forces. And Bush has repeatedly accused President Clinton and Vice President Al Gore of overcommitting U.S. soldiers to overseas peacekeeping missions while cutting military budgets.
Bush says that if elected, “I will tell our friends and allies, we care for you, we will strengthen our alliances, but if there needs to be troops on the ground to keep warring parties apart in your neighborhood, you get to be the peacekeepers.”
Gore says more diplomacy in advance would limit the need to send soldiers to crises abroad.
A cutback in overseas missions “will reduce our business,” said Pope. However, Halliburton derives less than 10 percent of its revenue from federal contracts, said Wendy Hall, a company spokeswoman. Brown & Root’s revenues were $1.6 billion last year; Halliburton had nearly $15 billion in revenues.
Brown & Root’s contracts are “cost-plus-award-fee” deals, meaning the company is reimbursed for its costs and also gets an incentive fee – usually up to 9 percent – based on performance.
Except for some problems in the beginning of the Balkans support mission, “generally their marks were usually very good to excellent,” said the Army’s Kibler.
Complaints about escalating costs for the Bosnia peacekeeping mission in 1997 prompted a review by the General Accounting Office, the investigative arm of Congress.
The GAO said costs increased because the Army increased the number of troop camps and didn’t monitor the contractor properly and because the contractor was slow to provide cost estimates. The problems were later corrected, the GAO said.
Some major contracts won by Halliburton Co.’s Brown & Root Services subsidiary to provide logistic support services for U.S. troops overseas:
Missions supported: Somalia, Zaire (Rwanda refugee crisis), Haiti, Southwest Asia, Italy (troops patrolling no-fly zone over Bosnia out of Aviano air base), Bosnia. Value: $815 million.
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