• Deals on meals
Deals on meals
Recently, The Wall Street Journal reported that Congress and the General Accounting Office were having trouble figuring out how the Pentagon was spending the $1 billion a week appropriated for the war in Iraq. Last week, part of the answer emerged.
The Journal reports that the Halliburton Co. overcharged the Pentagon more than $16 million for seven months’ worth of soldiers’ meals at a single Army dining facility in Kuwait. In July alone, a subcontractor hired by Halliburton’s Kellogg Brown & Root subsidiary billed the Army for 42,042 meals a day. Only 14,053 meals actually were served.
In the first six months of last year, the Journal reported, the Pentagon paid KBR $30 million for meals at Cap Arifjan, south of Kuwait City. Some 4 million of those meals were never eaten.
It could get worse. Halliburton, formerly run by Vice President Dick Cheney, operates 50 other dining halls in Kuwait and Iraq. Under a 2001 contract designed to bring the efficiency of private enterprise to Army logistical services, Halliburton also does laundry, delivers fuel, mail and supplies and provides other services that used to be performed by military personnel.
The terms of the logistics contracts are “cost-plus,” meaning Halliburton spends whatever it wants and then bills the government, adding a built-in profit margin of 2 percent to 7 percent. For food, KBR projects the number of meals it will serve and then bills the Pentagon for the actual number of meals served, or the projected number, whichever is greater. The company consistently is projecting three times more meals than it actually serves.
Many troops in Iraq report the food in KBR’s kitchens is so unappetizing that they prefer to buy food from Iraqi vendors on the streets. At Camp Victory in Kuwait, the gateway in and out of Iraq, soldiers spend hours in line to buy their own food at Hardee’s and Subway restaurants established by Kuwaiti entrepreneurs.
Meanwhile, the U.S. taxpayer is paying Halliburton for the meals those soldiers aren’t eating in the mess halls. Average cost per meal: about $4. The spokesman said Halliburton will repay the government’s money by lowing future bills, sort of like a $16 million lunch ticket.
The food revelation came few weeks after Halliburton admitted that two of its employees in Kuwait had accepted $6 million in bribes to steer oil contracts to a Kuwaiti firm. This resulted in the Army being overcharged by more than $1 a gallon for fuel.
These lax practices suggest that Halliburton may have overestimated its ability to handle such a massive undertaking. Logistics and supplies are critical to military success. They need to be on time, in the right quantity and delivered at bottom-dollar prices. Is it too late to turn the war over to Wal-Mart?
St. Louis Post-Dispatch
