Posted on 10/29/2004 8:28:51 AM PDT by Dubya
RALEIGH - Jerry Zovko’s contract with Blackwater USA looked straightforward: He would earn $600 a day guarding convoys that carried food for U.S. troops in Iraq.
But that cost – $180,000 a year – was just the first installment of what taxpayers were asked to pay for Mr. Zovko’s work.
Blackwater, based in Moyock, N.C., and three other companies would add to the bill, and to their profits.
Several Blackwater contracts obtained by The News & Observer open a small window into the multibillion-dollar world of private military contractors in Iraq. The contracts show how costs can add up when the government uses private military contractors to perform tasks once handled by the Army.
Here’s how it worked in Mr. Zovko’s case: Blackwater added a 36 percent markup, plus its overhead costs, and sent the bill to a Kuwaiti company that ordinarily runs hotels. That company, Regency Hotel, tacked on its costs for buying vehicles and weapons and a profit and sent an invoice to a German food services company called ESS that cooked meals for the troops.
ESS added its costs and profit and sent its bill to Halliburton, which also added overhead and a profit and presented the final bill to the Pentagon.
It’s nearly impossible to say whether the cost for Mr. Zovko doubled, tripled or quadrupled. Congressional investigators and defense auditors have had to fight the primary contractor, Halliburton, for details of the spending. The companies say the subcontracts are confidential and won’t discuss them.
About 20,000 private security contractors are now in Iraq, escorting convoys, protecting diplomats, training the Iraqi army and maintaining weapons.
The bills for this work flow from the bottom up. They start with Blackwater’s $600-a-day guns for hire such as Mr. Zovko and his three comrades, who were killed escorting a convoy through Fallujah in March.
At the top is Houston-based Halliburton, which has an open-ended "cost-plus" contract to supply the U.S. military with food, laundry and other necessities. Cost-plus means the U.S. government pays Halliburton all its expenses – its costs – plus 2 percent profit on top.
So far the Army has committed $7.2 billion on this cost-plus contract to Halliburton, which has been criticized for its performance in Iraq. The company has drawn additional political fire because of its ties to Vice President Dick Cheney, a former Halliburton CEO.
Henry Bunting, a former Halliburton purchasing officer, said he heard a common refrain in 2003 in Kuwait from managers at KBR – also known as Kellogg Brown & Root – a division of Halliburton: "Don’t worry about price. It’s cost-plus."
"There is no question the taxpayer is getting screwed," said Mr. Bunting, who was an Army staff sergeant in Vietnam. "There is no incentive for KBR or their subs to try to reduce costs. No matter what it costs, KBR gets 100 percent back, plus overhead, plus their profit.
"The Army said it is satisfied with Halliburton’s performance.
"They are providing essential services to our troops every day," said Daniel Carlson, a spokesman for the Army Field Support Command, which oversees the contract. "All the reports from the field come back that they are providing the services adequately."
Even if the Pentagon could tally all the layers of profit and overhead, it would struggle to compare the cost of using contractors such as Mr. Zovko in Iraq against the cost of soldiers.
According to a Defense Department Web site, a soldier with Mr. Zovko’s experience and final rank (he was a sergeant) would receive about $38,000 a year. That figure would not reflect additional costs for things such as health and retirement benefits or combat pay.
The shift to private contractors often has been justified as cheaper and more efficient. But the real reason for the use of private contractors is to reduce the political costs of war, according to P.W. Singer, an expert on private contractors and the military at the Brookings Institution.
By using private contractors to do work soldiers once did, Mr. Singer said, the administration doesn’t have to call up more regular troops, or National Guard and reserves, or compromise with allies to get them to send more troops.
"We don’t need another division there – we’ve got 20,000 private military contractors," Mr. Singer said.
But Mr. Singer said it’s hard to see how five layers of profits and overhead could save money.
"A cost-plus structure is contrary to all the lessons of free-market economics," Mr. Singer said. "It is most ripe for abuse . . . and by layering it and layering it, you make it even worse."
Liberal evil rag!!
Get rid of the contracors and have a draft!!!
$600 a day is on the cheap side.
$600 a day is on the cheap side
Sure it is.
For the man doing the work, it is cheap. Guys in different roles in different locations make more.
The layering, which is not all that uncommon, adds a considerable expense.
Bet he pays a lot in taxes, yes?
=== Liberal evil rag!!
What do you mean?
For what ?
=== $600 a day is on the cheap side.
Did you miss the part about the military who do it for a mere fraction of the cost?
Do military pay taxes?
=== Imagine how much money is wasted on pollsters, political consutlants, 527 organizations, PAC's, public relations firms.
Maybe the GOP could resist the urget to affix dollar bills to every third or fourth mailing as part of the fundraising inundation and save a few bucks that way.
Do military pay taxes?I did when I was in.
== no paper trail,
This is a "good thing" where our Moral Wars are concerned?
I didn't even attempt to make a value judgement on the "no paper trail" actions. They do happen though.
I'll be darned. Wearing the sort of uniform that made you a target in the way "paperless, uniformless" sorts are not.
Here's hoping you cleared more that $80K/year else you're probably going to feel pretty stupid for serving your country as some dogface when you could have been clearing some seriously Patriotic Pay ... TAX FREE!!
The conflict in Iraq, has opened opportunities in thousands of support jobs with hundreds of large US companies involved in a range of security, logistics and non military operations. The types of jobs available range from
- truck drivers,
- mechanics,
- food preparation (cooks, bakers and other support in food preparation),
- telecommunications and
- other technical personnel for the oil fields, water treatment plants, pumping stations, electricity distribution etc. de-mining road and airport maintenance port and rail maintenance
- Prison, security and Police
In fact it is difficult to find a skill that is not being used in this operation.
All the jobs are outstandingly well paid with salaries ranging from $ 60,000 to $ 175,000 a year, depending on age, qualifications and experience. in addition there are costs of living allowances and free transport from the USA, there and back. Former Armed Forces service personnel is especially welcome.
These jobs are not for everyone, and only hardworking and conscientious candidates need apply. Experience in working in Arab countries or language skills are not required but are an obvious advantage.
The Problem for interested candidates is finding the companies that are active in this area, since they keep their involvement on a low key and do not publicize their activities highly. JobLine International will submit your CV by e-mail to these companies, as appropriate for your job skills. We will also prepare your cover letter and Resume, so that you have a good chance of being offered a job.
Remember, this is a unique opportunity to earn a substantial amount of money in a very short time. Not all candidates will be accepted, but if you have a good work record, you have a good chance to land the job of a lifetime.
Remember, if you stay 12 months, the first 80k in salary is tax free!!!
Interesting ... given the "hands-off" nature of the IRS where these folks are concerned, I'm sure that "paperless" bookkeeping is not a problem after all where Some Corporations are more equal than Others.
You bet they do.
But now that (as above), it's common knowledge that some corporations are more equal than others and assassination is now Accepted Practice (for the Executive Branch, anyway), there's probably no point in making Value Judgments about much anymore.
The military really needs to do something about this. It always pissed me off watching civilian contractors making 6 figure salaries for doing the same work as my E-3s and E-4s that were essentially making minimum wage. Grrrrr...
I agree with you.
Some of our military families have to get food stamps to get by.
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