Amid reports that the Obama Administration had granted a $568 million no-bid contract to Halliburton despite assurances during the presidential campaign by candidate Obama that he would “end the abuse of no-bid contracts once and for all,” I asked the President’s top spokesman about this apparent contradiction at Monday’s briefing for White House reporters.
"When you let me know precisely in what area the contract was awarded, we can reconnoiter," said White House Press Secretary Robert Gibbs.
As it turned out, the no-bid contract was awarded to KBR, Inc., a subsidiary of Halliburton until 2007, and a company already under fire from the U.S. Department of Justice.
So here are the details: On May 9, Bloomberg Business Week reported that KBR, Inc. was selected for a no-bid contract by the U.S. Army worth as much as $568 million through 2011 for military support. According to several published reports, the Army also awarded the work to KBR over objections from members of Congress.
The awarding of the contract came as the Justice Department announced it will join a suit filed by whistleblowers alleging that two subcontractors gave KBR officials kickbacks in the forms of meals, drinks, sports tickets, and golf outings.
KBR, Inc. (formerly, Kellogg Brown and Root) was a subsidiary of Halliburton and is based in Houston. After Halliburton purchased Dresser Industries in 1998, Dresser’s engineering subsidiary (M.W. Kellogg) was merged with Halliburton’s construction subsidiary (Brown and Root) to former Kellogg and Brown and Root. In April 2007, Halliburton announced it had broken its 44-years-old ties with KBR.
During the ’08 campaign, candidate Obama denounced Halliburton ("The days of sweetheart deals for Halliburton will be over when I’m in the White House") as well as the process of no-bid contracts itself ("I will finally end the abuse of no-bid contracts once and for all."). Apparently, if one reads the words carefully, sweetheart deals are not over for former Halliburton subsidiaries and the no-bid contract process has not ended.
It will be interesting to see Robert Gibbs’ reply, now that he has the details he requested.
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