[News] Top 100 war contractors

[Anti-Imperialist News]

The Top 100 Private Contractors in Iraq and Afghanistan

http://www.publicintegrity.org/WOWII/



By Bill Buzenberg


KBR, Inc., the global engineering and 
construction giant, won more than $16 billion in 
U.S. government contracts for work in Iraq and 
Afghanistan from 2004 to 2006—far more than any 
other company, according to a new analysis by the 
Center for Public Integrity. In fact, the total 
dollar value of contracts that went to 
<http://www.publicintegrity.org/WOWII/Database.aspx?act=contractor_details&duns=010810893&contractor_name=KBR%20Inc%20%28formerly%20known%20as%20Kellogg%20Brown%20and%20Root%29>KBR—which 
used to be known as Kellogg, Brown, and Root and 
until April 2007 was a subsidiary of 
Halliburton—was nearly nine times greater than 
those awarded to 
<http://www.publicintegrity.org/WOWII/Database.aspx?act=contractor_details&duns=608461898&contractor_name=DynCorp%20International%20%28Veritas%20Capital%29>DynCorp 
International, a private security firm that is 
No. 2 on the Center's list of the top 100 
recipients of Iraq and Afghanistan reconstruction funds.

Another private security company, 
<http://www.publicintegrity.org/WOWII/Database.aspx?act=contractor_details&duns=012418161&contractor_name=Blackwater%20USA>Blackwater 
USA, whose employees recently killed as many as 
17 Iraqi civilians in what the Iraqi government 
alleges was an unprovoked attack, is 12th on the 
list of companies and joint ventures, with $485 
million in contracts. (On November 14, the New 
York Times reported that FBI investigators have 
concluded that 14 of the 17 shootings were 
unjustified and violated deadly-force rules in 
effect for security contractors in Iraq, and that 
Justice Department prosecutors are weighing 
whether to seek indictments.) 
<http://www.publicintegrity.org/WOWII/Database.aspx?act=contractor_details&duns=535150841&contractor_name=First%20Kuwaiti%20General%20Trading%20And%20Contracting%20Company%20Wll>First 
Kuwaiti General Trading & Contracting, which 
immediately precedes Blackwater on the Top 100, 
came under fire in July after a pair of 
whistleblowers told a House committee that the 
company essentially "kidnapped" low-paid foreign 
laborers brought in to help build the new U.S. 
embassy in Baghdad. First Kuwaiti and the U.S. 
State Department denied the charges.

Other key findings from the Center's analysis:

• Over the three years studied, more than $20 
billion in contracts went to 
<http://www.publicintegrity.org/WOWII/Database.aspx?act=contractor_details&duns=123456787&contractor_name=Miscellaneous%20Foreign%20Contractors>foreign 
companies whose identities—at least so far—are impossible to determine.

• Nearly a third of the companies and joint 
ventures on the Top 100 are based outside the 
United States. These foreign contractors, along 
with the $20 billion in contracts awarded to the 
unidentified companies, account for about 45 
percent of all funds obligated to the Top 100.

• U.S. government contracts for work in Iraq and 
Afghanistan have grown more than 50 percent 
annually, from $11 billion in 2004 to almost $17 
billion in 2005 and more than $25 billion in 2006.

According to David Walker, the comptroller 
general of the United States, the outsourcing of 
government has escalated across the board over 
the past five years, although oversight of the 
process has shrunk during this same period. In an 
interview with the Center for Public Integrity, 
Walker noted particular problems with military 
contracting. "We have identified about 15 
systemic, longstanding acquisition and 
contracting problems that exist within the 
Defense Department—which is the single biggest 
contractor within the U.S. government—that we are 
still not making enough progress on," said 
Walker, who heads the Government Accountability 
Office. "I mean, this stuff isn't rocket science."

While KBR earns the top spot among individual 
companies and their subsidiaries, the firm's $16 
billion in obligated contracts is eclipsed by 
$20.4 billion in contracts that went to a 
nebulous collection of companies identified by 
the U.S. government only as "foreign 
contractors." The Center has filed a Freedom of 
Information request for the 50 largest 
contracts—collectively worth some $19.6 
billion—awarded to these unnamed companies. The 
largest of these contracts is worth more than $6 
billion—a sum that would catapult the 
unidentified recipient to the No. 2 spot on the Top 100.

In October 2003, when the Center published 
"Windfalls of War," Halliburton's Kellogg, Brown, 
and Root was also the top recipient of U.S. 
government contracts for the postwar effort, with 
more than $2.3 billion in awards over two years 
(see the story 
<http://www.publicintegrity.org/wow/report.aspx?aid=65>here). 
By contrast, Bechtel, the only other company on 
that 2003 roster to have received more than $1 
billion in awards, won a second large contract in 
January 2004—this one for $1.8 billion—but left 
Iraq after completing its work in March 2007. 
Since this Top 100 represents contracts newly 
awarded in fiscal years 2004 to 2006, Bechtel is not on the list.

When the 2003 study was published, federal 
agencies did not comprehensively distinguish war 
contracts in Iraq and Afghanistan from other 
government contracts; therefore, Center 
researchers had to flush out these contracts one 
by one. Since then, however, most such contracts 
list Iraq or Afghanistan as their "place of 
performance," making the contracting process more 
transparent and the search for data—available 
from the General Service Administration's Federal 
Procurement Data System—more methodical.

But not all contracts for Iraq and Afghanistan 
are reported in this federal data system, 
including awards originating at one contracting 
agency in Baghdad, which reports only some 
aggregate totals for inclusion in the central 
database. Because the agency has so far refused 
to furnish these missing contracts, the Center is 
now seeking copies via Freedom of Information Act requests.

Officials in the Baghdad office say that these 
contracts are unlikely to change the rankings of 
the largest contractors on the Top 100, although 
some companies at the bottom of the list may 
change. According to Major General Darryl A. 
Scott, the commander of the Baghdad contracting 
office, these contracts are inaccessible not 
through willful omission, but because of the 
computer resources and human labor that would be 
required to integrate them into the main federal procurement database.

Iraq remains the clear priority of the U.S. 
government, the Center's research shows, with 
more than seven times as many contracting dollars 
designated for spending there as for Afghanistan. 
Furthermore, minority-owned businesses received 
less than one-tenth of 1 percent of the total 
awards as primary contractors. (The GSA's data 
does not provide subcontracting information.) And 
the data reveals that 12 of the 32 foreign 
contractors on the Top 100 are based in Turkey—far more than any other nation.

In the early months of the Iraq war, U.S. 
government officials were criticized for awarding 
contracts there without competition. Since then, 
however, much of the criticism has centered on 
cost-plus contracts, which guarantee that a 
vendor will earn either a fixed amount of profit 
or a set percentage of profit above its cost.

Of the $13 billion awarded through cost-plus 
contracts in Iraq and Afghanistan for 2004 to 
2006, 30 percent was awarded through simple 
cost-plus, fixed-fee arrangements that offer no 
incentives for performance or cost savings. The 
largest amount awarded to one vendor through 
cost-plus contracts, more than $8 billion, went 
to KBR. Much of that was the result of a contract 
to provide logistical support for U.S. Army combat operations.


Senior Database Fellow John Perry provided data analysis for this story.





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