US COMPANIES WILL DIVVY UP IRAQ CONTRACTS

WASHINGTON – Sometime soon, a group of American corporate executives and military leaders will sit down and divide Iraq into three parts.

JAMES RISEN; The New York TimesLast updated: May 24th, 2008 01:25 AM (PDT)
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Their meeting will not have anything to do with Iraq’s national sovereignty, but instead will involve slicing up billions of dollars in work for the defense contractors that support the U.S. military presence in the country.

For the first time since the war began, the largest single Pentagon contract in Iraq is being divided among three companies, ending the monopoly held by KBR, the Houston-based corporation that has been accused of wasteful spending and mismanagement and of exploiting its political ties to Vice President Dick Cheney.

Yet even as the Pentagon begins to pull apart the enormous KBR contract, critics warn that the new three-company deal could result in higher costs for American taxpayers and weak oversight by the military. In fact, under the new deal, KBR and the two other companies could make more than three times as much as KBR has been paid each year since the war began.

Last month the Pentagon awarded the companies pieces of a new contract to provide food, shelter and basic services for American soldiers, a 10-year, $150 billion deal that stretches far beyond the final days of the Bush administration.

KBR will still get a sizable chunk of the business, but now it will have to share the work with Fluor Corp. and DynCorp International.

Army officials and executives of the three companies are planning to meet in the next few weeks to start the complex process of breaking up KBR’s sprawling operations in Iraq. KBR, previously a subsidiary of Halliburton, once headed by Cheney, has collected more than $24 billion since the war began. It has 40,000 employees in Iraq and 28,000 more in Afghanistan and Kuwait.

But KBR has come under fire from Congress and Pentagon auditors for complaints ranging from making more than $200 million in excessive charges to delivering unsafe water to American troops, to doing little to prevent sexual assaults of its female employees, often by their KBR co-workers.