To Halliburton and its subsidiaries, largely.
Ed Harriman -- Where has all the money gone?: On the Take in Iraq -- LRB 7 July 2005
Waxman’s committee instructed Congress’s General Accountability Office to look into Halliburton’s biggest contract in Iraq: providing virtually all back-up facilities – from meals to laundry soap – to American forces. LOGCAP (Logistics Civil Augmentation Programme) contracts like this one are a product of the new ‘slimmed down’ American military, the quartermaster’s equivalent of Rumsfeld’s ‘invasion lite’. Rather than have uniformed troops peel potatoes and scrub floors, base support services have been privatised and contracted out so that, the idea goes, soldiers can get on with the fighting. The contracts are paid on a cost-plus basis, which allows the contractor to charge for what it has spent, then add on a profit. LOGCAP contracts have not been put out to tender, but rather awarded to a few US firms, the largest being Halliburton and its subsidiary Kellogg, Brown & Root.
The GAO report of July 2004 found that in the first nine months of the occupation, KBR was allowed a free hand in Iraq: a free hand, for example, to bill the Pentagon without worrying about spending limits or management oversight or paperwork. Millions of dollars’ worth of new equipment disappeared. KBR charged $73 million for motor caravans to house the 101st Airborne Division, twice as much as the army said it would cost to build barracks itself; KBR charged $88 million for three million meals for US troops that were never served. The GAO calculated that the army could have saved $31 million a year simply by doing business directly with the catering firms that KBR hired. In June 2004, the GAO continued, ‘by eliminating the use of LOGCAP and making the LOGCAP subcontractor the prime contractor, the command reduced meal costs by 43 per cent without a loss of service or quality.’
The GAO report makes clear that the Americans had given little thought as to how they might prevent looting and rebuild Iraqi society. They hadn’t even planned how they were going to provision the US forces staying on in Iraq: ‘the Army Central Command did not develop plans to use the [KBR] contract to support its military forces in Iraq until May 2003’ – a month after Saddam fell. Even then, this contract – with an estimated value of $3.894 billion – did not adequately provide for dining facilities, pest control, laundry services, morale, welfare and recreation, troop transportation or combat support services at the American bases hastily being built across Iraq. Stung by Waxman’s revelations about Halliburton’s petrol profiteering, and realising that KBR’s costs were spiralling out of control (LOGCAP costs in Kuwait, Iraq and Afghanistan rose from a projected yearly total of $5.8 billion in September 2003 to $8.6 billion in January 2004), the army vice chief of staff ‘asked units to control costs and look for alternatives to the LOGCAP contract’. This was the first admission that the Pentagon could not afford the occupation on top of the war.