Haliburton not getting as rich as it could

[charrison]

The next question was how large the contract should be. That was a difficult problem, because no one knew how big the problem would be. Would all the fields burn? Would none of them? Just a few? The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount. Because most of the anticipated disasters did not take place, the Army has asked KBR to do much less work than the original worst-case scenario envisioned, and the contract has therefore been worth far less than it might have been. "We will come nowhere close to the $7 billion figure," says Lt. Col. Pawlik.As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million. While that is not pocket change, it's also not $7 billion ? contrary, again, to Waxman's assertion.

The scandal that wasn't

 

[Bowfinger]

Originally posted by: charrison

The next question was how large the contract should be. That was a difficult problem, because no one knew how big the problem would be. Would all the fields burn? Would none of them? Just a few? The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount. Because most of the anticipated disasters did not take place, the Army has asked KBR to do much less work than the original worst-case scenario envisioned, and the contract has therefore been worth far less than it might have been. "We will come nowhere close to the $7 billion figure," says Lt. Col. Pawlik.As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million. While that is not pocket change, it's also not $7 billion ? contrary, again, to Waxman's assertion.

The scandal that wasn't

This still begs the question of why this contract wasn't competitively bid. There are reportedly plenty of companies both qualified and eager to do the work. In a free market economy, competition drives down prices, saving taxpayers money. Republicans are supposed to be in favor of this.

 

[charrison]

Originally posted by: Bowfinger

Originally posted by: charrison

The next question was how large the contract should be. That was a difficult problem, because no one knew how big the problem would be. Would all the fields burn? Would none of them? Just a few? The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount. Because most of the anticipated disasters did not take place, the Army has asked KBR to do much less work than the original worst-case scenario envisioned, and the contract has therefore been worth far less than it might have been. "We will come nowhere close to the $7 billion figure," says Lt. Col. Pawlik.As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million. While that is not pocket change, it's also not $7 billion ? contrary, again, to Waxman's assertion.

The scandal that wasn't

This still begs the question of why this contract wasn't competitively bid. There are reportedly plenty of companies both qualified and eager to do the work. In a free market economy, competition drives down prices, saving taxpayers money. Republicans are supposed to be in favor of this.

Read the rest of the article.

 

[Bowfinger]

Originally posted by: charrison

Originally posted by: Bowfinger

Originally posted by: charrison

The next question was how large the contract should be. That was a difficult problem, because no one knew how big the problem would be. Would all the fields burn? Would none of them? Just a few? The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount. Because most of the anticipated disasters did not take place, the Army has asked KBR to do much less work than the original worst-case scenario envisioned, and the contract has therefore been worth far less than it might have been. "We will come nowhere close to the $7 billion figure," says Lt. Col. Pawlik.As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million. While that is not pocket change, it's also not $7 billion ? contrary, again, to Waxman's assertion.

The scandal that wasn't

This still begs the question of why this contract wasn't competitively bid. There are reportedly plenty of companies both qualified and eager to do the work. In a free market economy, competition drives down prices, saving taxpayers money. Republicans are supposed to be in favor of this.

Read the rest of the article.

I did. The fact that Halliburton already had a two year old, do-miscellaneous-stuff contract doesn't explain why this specific contract wasn't put out for separate bid. Even assuming that the Haliburton contract was fairly and agressively bid, now is the time to be re-bidding such contracts due to the bush-whacked economy. Within the IT industry, for example, most companies are agressively renegotiating vendor contracts to get better terms. Why? Because companies are hungry for business, and they're willing to make concessions to gain or retain business.

I would expect all the top-notch business executives in our Republican leadership to do the same. After all, they are fiscal conservatives, right? They wouldn't put the interests of VP Dick's company ahead of taxpayers, would they?

On a side note, cost-plus contracts are a bad idea, especially when you have an open-ended contract like this. It is an invitation to waste money. The more you waste, the more you profit. Not a good plan for the buyer.

 

[Nitemare]

Originally posted by: Bowfinger

Originally posted by: charrison

The next question was how large the contract should be. That was a difficult problem, because no one knew how big the problem would be. Would all the fields burn? Would none of them? Just a few? The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount. Because most of the anticipated disasters did not take place, the Army has asked KBR to do much less work than the original worst-case scenario envisioned, and the contract has therefore been worth far less than it might have been. "We will come nowhere close to the $7 billion figure," says Lt. Col. Pawlik.As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million. While that is not pocket change, it's also not $7 billion ? contrary, again, to Waxman's assertion.

The scandal that wasn't

This still begs the question of why this contract wasn't competitively bid. There are reportedly plenty of companies both qualified and eager to do the work. In a free market economy, competition drives down prices, saving taxpayers money. Republicans are supposed to be in favor of this.

reportedly plenty???

I can think of 2 maybe 3 if you really push it

 

[AvesPKS]

Originally posted by: Bowfinger

Originally posted by: charrison

The next question was how large the contract should be. That was a difficult problem, because no one knew how big the problem would be. Would all the fields burn? Would none of them? Just a few? The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount. Because most of the anticipated disasters did not take place, the Army has asked KBR to do much less work than the original worst-case scenario envisioned, and the contract has therefore been worth far less than it might have been. "We will come nowhere close to the $7 billion figure," says Lt. Col. Pawlik.As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million. While that is not pocket change, it's also not $7 billion ? contrary, again, to Waxman's assertion.

The scandal that wasn't

This still begs the question of why this contract wasn't competitively bid. There are reportedly plenty of companies both qualified and eager to do the work. In a free market economy, competition drives down prices, saving taxpayers money. Republicans are supposed to be in favor of this.

Do you guys understand anything about how the government works? Do you know how long it takes to set up an IDIQ? If done 'by the book', it could take 2 years to 'competitively bid' an IDIQ. I think a lot of contraversy and confusion could be averted by people taking the time to sit down and learn a bit about their government.

Edit: I realize this might come off as inflamatory...and it is not meant as so. It is just one of the things I have had to learn to deal with in civil service.

 

[BOBDN]

As long as Halliburton earns enough to keep paying Cheney while he's in office their success is assured.

 

[lozina]

Originally posted by: AvesPKS

Originally posted by: Bowfinger

Originally posted by: charrison

The next question was how large the contract should be. That was a difficult problem, because no one knew how big the problem would be. Would all the fields burn? Would none of them? Just a few? The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount. Because most of the anticipated disasters did not take place, the Army has asked KBR to do much less work than the original worst-case scenario envisioned, and the contract has therefore been worth far less than it might have been. "We will come nowhere close to the $7 billion figure," says Lt. Col. Pawlik.As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million. While that is not pocket change, it's also not $7 billion ? contrary, again, to Waxman's assertion.

The scandal that wasn't

This still begs the question of why this contract wasn't competitively bid. There are reportedly plenty of companies both qualified and eager to do the work. In a free market economy, competition drives down prices, saving taxpayers money. Republicans are supposed to be in favor of this.

Do you guys understand anything about how the government works? Do you know how long it takes to set up an IDIQ? If done 'by the book', it could take 2 years to 'competitively bid' an IDIQ. I think a lot of contraversy and confusion could be averted by people taking the time to sit down and learn a bit about their government.

Edit: I realize this might come off as inflamatory...and it is not meant as so. It is just one of the things I have had to learn to deal with in civil service.

You're right, I don't know much about it, but let me ask this: Since it may take long to competively bid given the inefficiency of the current process it's better to ignore it altogether than to come up with a more efficient bidding process?

 

[drewshin]

i dont get the point of this thread. the amount of money was never an issue, whatever the costs came to is what they came to, the issue was how the contract was won. another red herring/straw man, whatever you want to call it.

the old $7 billion dollar contract is null and void, but there's still work to be done, they'll just write up a new contract. duh.

 

[BOBDN]

Originally posted by: drewshin
i dont get the point of this thread. the amount of money was never an issue, whatever the costs came to is what they came to, the issue was how the contract was won. another red herring/straw man, whatever you want to call it.

the old $7 billion dollar contract is null and void, but there's still work to be done, they'll just write up a new contract. duh.

Yeah, let's just write up a new contract to cover the cost of repairs in Iraq made necessary by the invasion Bush and Co. led by lying to the American people.

 

[ReiAyanami]

how do you bid on a variable contract?!

haliburton is the leading company in oilfield logistics, if one was burning you'd want them to fix it, plus they have security clearance

 

[AvesPKS]

Originally posted by: ReiAyanami
how do you bid on a variable contract?!

haliburton is the leading company in oilfield logistics, if one was burning you'd want them to fix it, plus they have security clearance

It happens all the time. You just adhere to their statement of work. It's not like the contractors don't know the variety of work they will be doing; they merely do not know to what extent they will be working on such items.

 

[AvesPKS]

Originally posted by: lozina

Originally posted by: AvesPKS

Originally posted by: Bowfinger

Originally posted by: charrison

The next question was how large the contract should be. That was a difficult problem, because no one knew how big the problem would be. Would all the fields burn? Would none of them? Just a few? The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount. Because most of the anticipated disasters did not take place, the Army has asked KBR to do much less work than the original worst-case scenario envisioned, and the contract has therefore been worth far less than it might have been. "We will come nowhere close to the $7 billion figure," says Lt. Col. Pawlik.As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million. While that is not pocket change, it's also not $7 billion ? contrary, again, to Waxman's assertion.

The scandal that wasn't

This still begs the question of why this contract wasn't competitively bid. There are reportedly plenty of companies both qualified and eager to do the work. In a free market economy, competition drives down prices, saving taxpayers money. Republicans are supposed to be in favor of this.

Do you guys understand anything about how the government works? Do you know how long it takes to set up an IDIQ? If done 'by the book', it could take 2 years to 'competitively bid' an IDIQ. I think a lot of contraversy and confusion could be averted by people taking the time to sit down and learn a bit about their government.

Edit: I realize this might come off as inflamatory...and it is not meant as so. It is just one of the things I have had to learn to deal with in civil service.

You're right, I don't know much about it, but let me ask this: Since it may take long to competively bid given the inefficiency of the current process it's better to ignore it altogether than to come up with a more efficient bidding process?

Maybe it would be better to come up with a better bidding process...but at what expense? It's all federally mandated, and there are so many hoops you have to jump through, it's ridiculous. But WE can't do anything about it; it has to come from Congress, and that has to come from John Taxpayer.

 

[Gonad the Barbarian]

Hmm, sounds like we need another war.

 

[Bowfinger]

Originally posted by: AvesPKS
Do you guys understand anything about how the government works? Do you know how long it takes to set up an IDIQ? If done 'by the book', it could take 2 years to 'competitively bid' an IDIQ. I think a lot of contraversy and confusion could be averted by people taking the time to sit down and learn a bit about their government.

I did work in government for several years, and I do understand how it works (within reason, of course). The fact that a far-ranging, open-ended contract can take two years to bid doesn't mean it has to in an urgent situation. When you consider that this specific engagement was much narrower in scope and duration, it could have been relatively easy to do a quick RFP to a dozen or so qualified companies, find out who was most hungry for the business. If that meant cutting a few corners, it would still have been more "by the book" than just handing it to Cheney's company.

 

[Bowfinger]

Originally posted by: ReiAyanami
how do you bid on a variable contract?!

Lots of options: cost-plus, time and materials, fixed hourly rate, fixed cost per 'task' where specific tasks are defined and priced, fixed scope at fixed price, with overruns at a pre-negotiated rate, or any combination of these. Some of these approaches wouldn't be practical in this specific case, but that's a general answer.