[Congressional Record (Bound Edition), Volume 152 (2006), Part 10]
[Senate]
[Pages 14151-14152]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     SOLE-SOURCE CONTRACTS AND IRAQ

  Mr. DORGAN. Mr. President, this morning in the Washington Post there 
was an article announcing a decision by the Defense Department that 
relates to something I have held a good many hearings on through the 
Democratic Policy Committee in the past several years. We have been 
holding hearings on waste, fraud, and abuse with respect to the very 
large sole-source contracts that have been given to certain companies 
to do business in Iraq and provide food and fuel and logistics support 
for our troops. What we have discovered is very substantial waste, 
fraud and abuse.
  This morning, finally, the Washington Post says: ``The Army to End 
Expansive, Exclusive Halliburton Deal. Logistics Contract to be Open 
for Bidding.'' One of the side bars of the story talks about: 
``Whistle-blowers told how the company charged $45 per case of soda, 
double-billed on meals, and allowed troops to bathe in contaminated 
water.'' All of these were issues given us to us by whistle-blowers who 
came to our Committee to testify because there was virtually no 
oversight on these issues by the other Committees.
  The decision to terminate these sole-source contracts is long 
overdue. Sole-source contracts are contracts that are, in my judgment, 
invitations for abuse. The bill that I introduced some months ago, 
along with 30 other Senators, called S. 2361, the Honest Leadership and 
Accountability in Contracting Act of 2006, is a piece of legislation 
that insists on this exact provision, but goes much, much further--the 
provision that says we ought to break up these contracts and have them 
competed for so that the competition for contracts will give the 
taxpayers some feeling they are not being cheated.
  A fellow named Henry Bunting testified at a hearing we held. He was a 
whistle-blower. He actually worked for Halliburton in Kuwait. His job 
in Kuwait was to purchase hand towels for American soldiers. So he got 
a requisition to buy hand towels for American soldiers, and he would 
order the hand towels. But then he was told: No, we don't want you to 
order those hand towels; we want you to order new hand towels. He 
brought a sample of the hand towels with him. The reason they wanted 
him to order different hand towels is they wanted the company name to 
be embroidered on the hand towels, which tripled the cost of the towels 
for the taxpayers.
  No one would have believed that soldiers need to have hand towels 
with the embroidered name of the contractor providing the hand towels. 
That is exactly what happened. And it is exactly what the whistle-
blowers told us was happening with respect to procurement.
  This whistle-blower, who worked with the company, said: This is 
something my supervisor said we are going to do, and we did it. He 
said: We saw $8,500-a-month SUV rentals. We saw $40, $45 a case for 
Coca-Cola
  It is pretty unbelievable when you hear all of the stories. Those 
stories come from giving billions of dollars of contracts to one 
company. That is what has happened on contracts called LOGCAP and RIO, 
and finally the Pentagon suggests maybe it is going to shut these down 
and require competition.
  Looking forward, I am going to ask the Pentagon to consider all of 
the information that we have uncovered in these hearings, because 
provisions in defense contracting require that you hold companies 
accountable for actions they have taken in the past, when you consider 
new bids for the future.
  It is interesting that this also relates to something that is now 
happening in the Pentagon. The woman who testified before the 
committee--there has been a great deal of discussion about her--was 
Bunny Greenhouse, the top civilian contracting official in the Corps of 
Engineers at the Pentagon. She rose to the top. Every performance 
evaluation said she was the best. People outside the Government who had 
dealt with her said she was the best, professional, knew what she was 
doing. She said:

       I can unequivocally state that the abuse related to 
     contracts awarded to KBR--

  That is Halliburton--

     represents the most blatant and improper contract abuse I 
     have witnessed during the course of my professional career.

  This woman was honest and public about what she saw. She was demoted. 
She lost her job. That job has now been filled by someone else, someone 
who has 40 years experience with the Government but has no contracting 
experience. A person with 20 years contracting experience, the highest 
civilian official in the Corps of Engineers loses her job to be 
replaced by someone who is now being sent to school because she doesn't 
know contracting.
  This is happening at a time when we hear these stories of $85,000 
trucks left by the side of the road to be burned because of a flat 
tire--the taxpayer is paying for it; it doesn't matter--25 tons of 
nails, 50,000 pounds of nails ordered, wrong size, throw them in the 
sand. Want to find 25 tons of nails? They are in the sand in Iraq, paid 
for by the American taxpayer.
  Where is the accountability? It is unbelievable the amount of waste 
that has existed. And the one person who had the courage to talk about 
it publicly lost her job. That is still the subject of a great deal of 
angst in the Pentagon.
  So yesterday the Pentagon announces that they are finally going to 
end sole-source contracts and require competitive bidding, and finally 
the taxpayers appear to get a break. But this was several overdue.
  There is more that needs to be done. One of the things the Pentagon 
has apparently also decided to do is to outsource oversight. You can't 
outsource oversight. It has been tried before. They had companies that 
were partners in contracts in other countries come into Iraq to provide 
oversight over each other. You can't do that. You can't delegate 
oversight, especially not to companies with conflicts of interest. The 
oversight responsibility for spending the taxpayers' money is with the 
Government, not someone you hire that will have a patently obvious 
conflict of interest.
  While the Pentagon is taking a step forward today in their 
announcement about the ending of these sole-source contracts, they are 
taking another step backward on this issue of deciding they are going 
to hire other companies to provide oversight to make sure the 
taxpayers' money is being spent in the way anticipated. That makes no 
sense.
  Here is another whistleblower account. Rory Mayberry worked in Iraq 
for Halliburton. He worked in food service. He was the manager of a 
food service that provided food to the troops. He came to us and said: 
We had food that was date stamped expired. The Halliburton supervisors 
said: It doesn't matter, just feed to it the troops. And they said: By 
the way, don't you dare talk to a Government auditor. If a Government 
auditor comes around and you talk to that person, either you will be 
fired or you will be sent to an area where there is hostile action. He 
talked to a Government auditor. He was sent to Fallujah during the 
height of the action there.

[[Page 14152]]

  The stories are unbelievable. And finally, the Pentagon is taking a 
step in the right direction in one area, stepping backward in another. 
But I hope the Pentagon understands, when they open these contracts 
called the LOGCAP contract and the RIO contract, when they open these 
contracts and finally insist that there be competition between 
companies in order to provide some safety for the American taxpayer and 
to be sure that we are getting what we are paying for, I hope they will 
understand that there has to be adequate oversight.
  We have introduced legislation, myself and many of my colleagues, 
called the Honest Leadership and Accountability in Contracting. What 
the Pentagon is doing today appears to be in line with one piece of it, 
and it is a step in the right direction. But much more needs to be 
done.
  I ask those in the Pentagon to take a look at what we will send to 
them as a result of a number of hearings in which whistleblowers who 
have worked for these contracts, particularly Halliburton that has 
received very large sole-source contracts worth billions of dollars 
without bidding, I would hope they would take a look at this and 
evaluate whether the performance is performance that is worthy of 
receiving other contracts. The list is endless. I will not go over it 
again.
  This morning's announcement by the Pentagon is finally a recognition 
that there needs to be competition. It is one step in the piece of 
legislation I and many of my colleagues offered some months ago. My 
hope is they will finish the job and do what is necessary to give the 
taxpayers full value and full measure for the money that is being spent 
on these contracts.
  I yield the floor.

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