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The Center for Public Integrity: Center Unveils Windfalls of War II Investigation

FOR IMMEDIATE RELEASE
NOVEMBER 19, 2007
5:58 PM

CONTACT: The Center for Public Integrity
Steve Carpinelli, Media Relations Coordinator
Center for Public Integrity
(202) 481-1225 (office)

 
Center Unveils Windfalls of War II Investigation
While the Pace of U.S. Iraq and Afghanistan Contracts Continues To Swell, Oversight has Declined
 

WASHINGTON, DC - November 19 - It's been four years since the Center released its acclaimed Windfalls of War investigation, which first named Halliburton as the largest single contractor in Iraq and revealed the most comprehensive list of the top Iraq and Afghanistan contractors available at the time. That list included more than 70 American companies that had been awarded up to $8 billion in contracts from 2002 through July 1, 2004. By the end of 2006, U.S. contracts in Iraq and Afghanistan have grown to $25 billion, while oversight has seriously deteriorated, according to a new Center analysis, Windfalls of War II.

The Center report shows that KBR, Inc., formally known as Kellogg, Brown and Root and a Halliburton subsidiary until April 2007, continues to top the list at more than $16 billion in U.S. government contracts from 2004 to 2006. DynCorp International, at $1.8 billion, came in at a distant second.

"While the billions of dollars involved and the complexity of these war-related contracts has only grown, the lack of oversight has been staggering," said Center Executive Director Bill Buzenberg. This reaction was shared by David Walker, Comptroller General and head of the United States Government Accountability Office. Walker said that while government outsourcing has escalated over the past five years, oversight has substantially declined. The Center's analysis also found a system marred by missing contracts, unidentified companies, a lack of competitive bidding and the absence of minority-owned companies as primary contractors.

The Center assembled its list of the top 100 contractors, where the reported place of performance was in Iraq and Afghanistan, by analyzing the General Service Administration's Federal Procurement Data System. After reviewing this federal database, the Center was able to piece together the 100 companies that received the most contracts from fiscal years 2004 to 2006. However, even this publicly available federal database does not include all Iraq and Afghanistan contracts, including the ones originating at the Baghdad contracting agency. The Baghdad contracting agency has rebuffed Center efforts to obtain missing contracts. The Center is now seeking to acquire them through Freedom of Information Act requests.

The latest Center analysis also found that:

* From 2004 to 2006, U.S. government contracts in Iraq and Afghanistan grew more than 130 percent, from $11 billion in 2004 to more than $25 billion in 2006.

* Foreign firms make up almost one-third of the top 100 contractors and more than $20 billion in contracts awarded went to unidentified companies. Together, foreign contractors and the unidentified companies accounted for approximately 45 percent of all the top 100 Iraq and Afghanistan reconstruction dollars awarded. If the largest of the unidentified contractors were counted as a single entity, it would rank on the top 100 list in the No. 2 spot, with more than $6 billion awarded.

* Some 30 percent of the $13 billion in cost-plus contracts in Iraq and Afghanistan were simple cost-plus, fixed-fee, which offer no performance or cost-saving incentives.

* Of the 31 foreign contractors on the top 100 list, 12 are based in Turkey, far more than any other country. U.S.-based minority-owned businesses received less than one-tenth of 1 percent of the total primary contracts awarded.

To read Windfalls of War II and all of the Center's award-winning investigations, visit www.publicintegrity.org.

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