Halliburton's Performance Worsens under Second Iraqi Oil Contract |
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Rep. Waxman releases the
first analysis
of Halliburton's RIO 2 contract to restore Iraq's southern
oil fields. The examination of previously undisclosed
correspondence, evaluations, and audits reveals that
government officials and investigators have harshly
criticized Halliburton’s performance under RIO
2. The documents disclose an "overwhelmingly negative"
performance, including:
- Intentional
Overcharging: Halliburton repeatedly overcharged
the taxpayer, apparently intentionally. In one case,
“[c]ost estimates had hidden rate factors to
increase cost of project without informing the Government.”
In another instance, Halliburton “tried to inflate
cost estimate by $26M.” In a third example,
Halliburton claimed costs for laying concrete pads
and footings that the Iraqi Oil Ministry had “already
put in place.”
- Exorbitant
Costs: Halliburton was “accruing exorbitant
indirect costs at a rapid rate.” Government
officials concluded that Halliburton’s “lack
of cost containment and funds management is the single
biggest detriment to this program.” They found
a “lack of cost control ¦ in Houston,
Kuwait, and Iraq.” In a partial review of the
RIO 2 contract, DCAA auditors challenged $45 million
in costs as unreasonable or unsupported.
- Inadequate
Cost Reporting: Halliburton “universally
failed to provide adequate cost information,”
had “profound systemic problems,” provided
“substandard” cost reports that did “not
meet minimum standards,” and submitted reports
that had been “vetted of any information that
would allow tracking of details.” Halliburton
produced “unacceptable unchecked cost reports.”
- Schedule
Delays: Halliburton’s work under RIO
2 was continually plagued by delays. Halliburton had
a “50% late completion” rate for RIO 2
projects. Evaluations noted “untimely work”
and “schedule slippage.”
- Refusal
to Cooperate: Evaluations described Halliburton
as “obstructive” with oversight officials.
Despite the billions in taxpayer funds Halliburton
has been paid, the company’s “leadership
demonstrated minimal cooperative attitude resolving
problems.”
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