Also from AP/WaPo on Dick Cheney's favorite millionaire-made-him Halliburton in Iraq, which follows up this previous post on Kellogg, Brown & Root:
Administrative overhead accounted for more than half the costs that a Halliburton Co. subsidiary passed on to the government under a key contract to restore Iraq's oil industry, a figure that critics said was unusually high.
A report released yesterday by the inspector general's office overseeing Iraq spending found that at least 55 percent, or $163 million, of $296 million in total costs rung up by Halliburton unit KBR went to expenses such as back-office support, transportation and security. That percentage was significantly higher than it was on work by other firms in Iraq, and experts said it is far above what is typically found on a government contract.
The findings are the latest that call into question KBR's work under the deal, which required the company to rehabilitate oil facilities in southern Iraq. Under the contract's terms, KBR is reimbursed for its costs and then receives a percentage for profit on top, an arrangement that critics contend has given the firm an incentive to run up its bills.
According to internal government documents released in March, auditors found that the company had repeatedly overcharged the government by, among other things, billing for work it didn't actually do and paying suppliers more than they were owed. Meanwhile, work schedules slid and company officials balked at requests for accurate cost estimates. At one point, officials threatened to terminate the deal. Instead, KBR -- which has received more money from the Iraq war effort than any other firm -- was allowed to keep the contract and is now winding up work.