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Contracts in Iraq spend over 50% on overhead

sfgate.com — A report by a federal oversight agency provides the first official estimate that in some cases, more money is being spent on things like housing and feeding employees, completing paperwork and providing security than on actual construction. The highest proportions of overhead were found to be incurred by Halliburton.

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  • choicetoes, on 10/12/2007, -4/+37What? A huge corporation with massive ties to the people at the highest levels of our government engaged in war profiteering? What has the world come to? Imagine how surprised everyone will be when this comes to light!
    • truspector, on 10/12/2007, -4/+22Look at how much Halliburton stock has jumped up since the war in Iraq started. This war has literally made Dick Cheney a ton of money. No wonder they were no bid contracts.
    • fletchowns, on 10/12/2007, -3/+22Why are Americans letting this happen? Why can't we do something to stop all the BS the government is doing? We're so powerless...it's frustrating. We know they're screwing us. What can we do?

      It's not like impeachment is an option. The only thing worse than a President Bush is a President Cheney. Maybe a better use of $337,085,638,554 and thousands of lives spent on a pointless war is researching alternative fuel sources, space research, or education. You know, things that actually benefit HUMANITY and not rich, white, soulless republicans.
    • verifex, on 10/12/2007, -1/+10Hey Mr Gov't, I want my money back. I didn't want my money being spent to keep rich inept managers at the status quo while the people of Iraq are still under attack daily, and the US has much bigger fish to fry.
    • p0s3r, on 10/12/2007, -1/+4FTA:
      Instead, the inspector-general pointed to a simple bureaucratic flaw: The United States ordered the contractors and their equipment to Iraq and then let them sit idle for months at a time.

      The delay between assembling the teams in Iraq and the start of actual construction was as long as nine months, the report said.
    • 2ndRevolution, on 10/12/2007, -0/+1 @fletchowns

      [Why are Americans letting this happen? Why can't we do something to stop all the BS the government is doing? We're so powerless...it's frustrating. We know they're screwing us. What can we do?]

      Why are we letting it happen? We have become apathetic. What can we do? Organize and do what the 2nd amendment was put into the Bill of Rights for...replacement of corrupt government. There is no other option at this point.

      "If you're not with us, you're with the terrorists" (paraphrasing G.W. Bush) That was the same mindset of King George when he was subjecting the colonies to tyranny. Luckily there were men who realized what a crock of ***** that was and fought to give us our country. I hope to see it restored in my lifetime.
  • listrophy, on 10/12/2007, -15/+3100% overhead? Doesn't seem too bad, _especially_ given that the workers need housing and food.

    I know of (decently-run) companies running over 150% overhead. Sheesh.
  • ninti, on 10/12/2007, -0/+12It is amazing how much things like security and housing costs when everyone there is trying to kill you. And considering that things are getting worse there every day, it is only going to get more expensive, both in money and bodies, the longer we stay.
  • jonnydobad, on 10/12/2007, -1/+11Based on the circumstances in Iraq, I am surprised that overhead rates aren't more like 60-70% on many contracts. Security alone must cost a fortune for any contractor operating there. It isn't surprising that KBR has one of the highest overhead rates considering Oil is one of the priorities in order to provide money to the Iraqi government and the fact that the oil pipelines and fields have been attract many times. Their security costs, cost of assessing damage, and other items that are considered overhead would have to be high. Think about paying for workers when they are waiting on new assessments (the cost of contracted employees is very high, how do entice someone to go to a war zone?).
    • nixonrichard, on 10/12/2007, -1/+3I agree. Overhead rates of over 100% (over 50% spent on overhead) are very common for construction companies, even local companies that don't have to worry about their employees being murdered. I worked for a state DOT for 3 years and all but one of the construction companies and utilities we worked with had overhead rates over 80% . . . it happens.
  • Tynan, on 10/12/2007, -8/+8Forgive me if I'm not seeing the equivalence between "housing and feeding employees, completing paperwork and providing security" and "padding corporate coffers".

    It's obvious the media is pretty desperate for a Halliburton corruption story. Meanwhile back in real life, Iraq isn't a very profitable place to operate and profit from Iraq contracts is not particularly great.

    We know what real scandals look like. This only appears as one if you're looking through a twisted anti-Bush prism.
    • jonnydobad, on 10/12/2007, -6/+0Actually, many government contracts in Iraq are profitable, although the margins are a slim 3 to 6% (usually a negative NPV if anyone here knows what that is). They key that companies see is that they can build a relationship with the government and increase revenue (which investors always like regardless of if it offers much profit).
    • ardenr, on 10/12/2007, -2/+3well, try looking up some figures on how much helliburton charge. see if that makes sense to you. when people ask why americans are powerless, remember knowledge is power. and it's not my job to tell you.
  • chi1thook, on 10/12/2007, -3/+1I just watched Omri Caspi. God damn is he good.
  • Mofo, on 10/12/2007, -2/+10I know of this kind of stuff first hand. I am a slave to a unnamed contractor that charges the gov 5+ times the amount for my services of what they pay me. I know cause I've seen the contracts. Our "senior management" are always down as senior technical directors too billing ***** of hours though they might be able to tell you what the acronym of the project stands for if you're lucky.
    • Daedalus17, on 10/12/2007, -7/+4Slave? So they are making you work for them against your will? Either you a a hypocrite for working for a corporation that is ripping off the American public even though you are complaining about it, or you are lieing.
    • nixonrichard, on 10/12/2007, -0/+8If they are doing that, you should tell someone because it is very illegal . . . wages are not allowed to be inflated for contracts . . . materials and supplies are, but not wages -- Davis-Bacon act.
    • p0ss, on 10/12/2007, -1/+3i am in a similar situation, and i can name hundreds of similar situations. I am not in america, but the government here consistently pays contracting companies well above what the actual contractors receive. It is common knowledge
  • geometry, on 10/12/2007, -1/+6It doesn't matter what the overhead is. Isn't our army trained to do the same things that Halliburton and KBR are doing? Isn't that one of the big reasons people join the army, to get an education and be trained to do these things so when they leave the army they can get a job. I've heard many stories of army personal having to train KBR employees to do the jobs that they themselves were there to do, then the army personal don't have the chance to get the on the job experience they expect.

    This war is complete BS. I want my portion of the 300 something billion back. Figure 300 million people in the US divided my $300 billion, that comes out to about $1,000 per US citizen.
    • avidlinuxuser, on 10/12/2007, -2/+6@macabuser

      Yep, Halliburton sure does take care of our troops like serving contaminated water, http://www.msnbc.msn.com/id/10977706/.
    • geekuskhan, on 10/12/2007, -2/+6The army used to take care of this stuff itself until contractors convinced (bribed) the civilian leadership to say they could do it better and cheaper.

    • deanlowe, on 10/12/2007, -0/+2MacAbuser, if the US Army can't take care of itself without KBR, why the ***** are they over there?
  • webXL, on 10/12/2007, -7/+4OK, all you libs. You're right. Iraq is too damn expensive. That money could be better spent on things like the National endowment for the arts and farm subsidies.

    In all seriousness, money does not grow on trees, and it should be possible to redefine victory in Iraq so it doesn't bankrupt every single one of us. After all, we got rid of a brutal dictator who was a trouble maker for the region and pursued WMDs, brought a little democracy to the region, and we'll get some bases out of it. And things are peachy keen in Kurdistan. The mistake was trying to stabilize the country before it was possible to do so. Civil war is a reality now and if they want to kill each other over there, then we should get out of the way. God will sort them out.

    Conservatives need to realize that most liberals in the world (pretty much the world) will never accept American victory in Iraq, whether perceived or real, so you might as well claim it and figure out how to start saving money and lives. It was *not* a mistake to invade, we all know that. It was a mistake to invade without a sound strategy for fighting the insurgency and preventing foreign fighters from entering the country and screing everthing up. That doesn't fall entirely on Bush's head or the 77 Senators and 296 Congress members who supported the invasion, or Bill Clinton who signed the law that made regime change in Iraq our official policy. It falls on the head of everyone who has some degree of blind faith of what government can accomplish, myself included. Government can blow stuff up, but keeping stuff from blowing up is much, much harder.

    Why the hell do we need to listen to Collin Powell? We don't need to fix anything. The world will hate us no matter what. It's still broken and it's only cost us a bunch of money and lives. We accomplished our goals. Now split up the country and move on to Iran.
    • butterpat, on 10/12/2007, -2/+4>After all, we got rid of a brutal dictator who was a trouble maker for the region and pursued WMDs, brought a little democracy to the region...

      Bush is gone???
  • elastikos, on 10/12/2007, -3/+6Halliburton, say it aint so!

    Who would have thought that this war was made just for the war companies?
  • mirunit, on 10/12/2007, -0/+7Question:

    What government project does NOT have such huge overhead? Almost every governmental project is grossly too expensive and inefficient.
    • JonForTheWin, on 10/12/2007, -0/+4For example the DMV and the IRS.
    • jonnydobad, on 10/12/2007, -0/+1Don't forget the rest of the government, the IRS is probably one of the most efficient... I'm thinking the EPA - 95% overhead (people can claim want they want, but the EPA doesn't even take care of problems they are supposed to take care of).

      Government workers = lazy scoundrels
      Corporate America = greedy scoundrels

      I used to work for the government until I was told that I should stop working so hard because I made my coworkers look bad, then I went to private industry where my work ethic was actually rewarded. When making a choice between lazy and greedy I choose greedy, after all we all really are greedy. (Economics actually proves this point since greed is simply the desire to have more, it just tends to have negative connotations.)
  • Corrosionx, on 10/12/2007, -2/+5This war is nothing but a transfer of wealth, from the American taxpayers to the war profiters. Everything else is a diversion.
  • dschrute, on 10/12/2007, -3/+5It was all worth it though, wasn't it?
    At least we got rid of those WMD's, liberated a nation, started a new democracy, and got rid of all of those terrorist followers of Osama Bin Laden. Hopefully Iran and North Korea learned a good lesson from our success in Iraq.

    Oh, that's right, we didn't accomlish any of those things. *****.
    • webXL, on 10/12/2007, -6/+4We got rid of one WMD: Saddam Hussein. He'll never make or use anymore of them. The nation was liberated. Just ask a Kurd. Democracy will take a while, I don't think there was much when we had our civil war, at least in the South. And weren't Zarqawi and his henchmen terrorist followers?

      Iran has Americans on both sides of its borders now, which easily explains its behavior. North Korea is so hungry it will do anything to get the world's attention.

      *****.
  • CharlieInCO, on 10/12/2007, -4/+3What. a company doing government contracts has over 50 percent overhead?

    Wow, that's pretty good. I used to do contracting and it was more like 70 percent overhead.

    And this in Iraq, where they have to provide their own security.

    You know, the ignorance in digg polotical stories would be funny if it weren't so ignorant.
  • im3ngs, on 10/12/2007, -1/+1This is so frustrating to read. FEMA, Iraq... misappropriation of funds everywhere... WHAT can we do about this...?!?!?!?
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