Windfalls of War

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The Pentagon turned to Russia to buy Mi-17 helicopters, like these shown here, to equip the Afghan and Iraqi militaries, to the consternation of American companies. Department of Defense
Pentagon contracts to Russian builders of helicopters confounds US companies. Pentagon says Afghan and Iraqi pilots are more familiar with Russian choppers.

Windfalls of War

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The Pentagon tried to sole-source a new line of refueling tankers to Boeing for $37 billion, citing the urgency of war, but was overruled. Even though Boeing eventually won the contract, a competition with Europe's EADS forced down the cost of the contract and saved taxpayer dollars.  Boeing
The air tanker fight shows how competition among defense contractors can drive down the cost of new weapons systems, to the benefit of taxpayers. The Pentagon's competed contracts fell to 55 percent in the first half of 2011.

Windfalls of War

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United Flight 175 collides with south tower of the World Trade Center. Chao Soi Cheong/AP

UPDATED 10/7/11: Ten years ago, American bombs rained down on Afghanistan, the first thrust of revenge for the 9/11 attacks on the Pentagon and the World Trade Center.

The United States went to war to find and kill terrorist leader Osama bin Laden, who had been given refuge by Afghanistan's Taliban leadership. The Taliban fell quickly; it took another 10 years to kill bin Laden. And still the war drones on.

More than 6,000 soldiers have died in Afghanistan and Iraq. The wars cost taxpayers $2 billion a week. The Pentagon has awarded $206 billion in contracts to support operations in Iraq and Afghanistan.

The bipartisan Commission on Wartime Contracting has concluded that up to $60 billion spent on contracts in Iraq and Afghanistan has been lost to waste, fraud and abuse.

 “The need for reform is urgent,” the commission report said. “Contractors’ support…has been unnecessarily costly, and has been plagued by high levels of waste and fraud.”

Over the last decade, the Center for Public Integrity and its website iWatch News have kept a watchdog’s eye on the Bush administration and now the Obama administration. What follows is a compendium of the Center’s best work on the war.

Windfalls of War III (2011)

Pentagon's no-bid contracts triple in 10 years of war
Over a decade of war, the Pentagon has awarded lucrative military contracts without competitive bidding, and the amount has increased from $50 billion in 2001 to $140 billion in 2010.

Windfalls of War

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This list was created from data covering contract transactions executed in fiscal years 2004, 2005, and 2006, where the reported place of performance was Iraq or Afghanistan. The data — available from the General Service Administration's Federal Procurement Data System — is limited to the 100 vendors receiving the most obligated funds during this three-year period.

When the Center for Public Integrity published its first "Windfalls of War" investigation, in October 2003, up-to-date data on federal contracting activity was not available. As a result, Center staff gathered contract amounts from documents obtained under the Freedom of Information Act. Since then, however, most such contracts for the post-war efforts 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.

Contract amounts in the new data represent actual dollars obligated for products or services. Because of variability in how amounts were reported in the 2003 documents, amounts from the original report cannot be accurately combined or compared with dollar amounts in the 2007 update.

The updated data does not include all Iraq reconstruction contracts. For example, contract transactions handled by the Army Joint Contracting Command Iraq/Afghanistan is maintained in a separate system. Though summary information about those contracts is available from various sources, including the Special Inspector General for Iraq Reconstruction quarterly reports to Congress, detailed transaction information is not generally available to the public.

The Center has requested information about these contract transactions under the Freedom of Information Act. That information will be added here as it is made available.

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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 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 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, 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.) 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 foreign companies whose identities—at least so far—are impossible to determine.

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Documents obtained by the Center for Public Integrity show that the Army Corps of Engineers ignored sharp objections by its top procurement official concerning Halliburton contracts in Iraq and the Balkans.

The most recent controversy surrounds the extension of a troop-support contract in the Balkans held by Kellogg, Brown & Root, a Halliburton subsidiary. Bunnatine Greenhouse, the contracting official, objected to the 11-month extension worth an estimated $165 million because she felt it was not justified. She has asked for an independent investigation of possible procurement fraud.

Time magazine broke the story regarding Greenhouse's allegations last week. Since then, the Center has obtained additional documents—none of which was originally included among those the Army Corps supplied to the Center in response to a Freedom of Information request and follow up lawsuit against the Corps. The new documents include the letter Greenhouse's lawyer sent to Les Brownlee, the acting Army Secretary. That letter mentions that Greenhouse came under pressure from individuals "associated with favorite companies" and experienced "repeated interference" when dealing with KBR. The documents also contain internal Army Corps e-mails and a version of the justification review document which includes notes from Greenhouse such as "Not a valid reason for extension" and "I cannot approve this."

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