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MediaWatch:Reports
Profits of War
Measuring the "Windfalls of War"
Center for Public Integrity Report Lists Top 100 Private Contractors
11/20/2007 2:46 PM ET
LONDON - SEPTEMBER 11: The KBR logo is illuminated during the Defence Systems and Equpment International (DSEi) at the Excel Centre on September 11, 2007 in London, England.
Daniel Berehulak/AFP/Getty
LONDON - SEPTEMBER 11: The KBR logo is illuminated during the Defence Systems and Equpment International (DSEi) at the Excel Centre on September 11, 2007 in London, England.

Defense contractor KBR tops the list of the top 100 private contractors employed by the United States in Iraq and Afghanistan, having won $16 billion worth for work between 2004 and 2006.

The Center for Public Integrity assembled the list for its new report The Windfalls of War II, a sequel to its 2003 assessment.

CPI found that KBR, until April 2007 a subsidiary of contracting leviathan Halliburton, has done so well in Iraq and Afghanistan that it beat the value of second-place DynCorp's contracts by a factor of nearly nine. Washington Group International, IAP World Services, and Environmental Chemical Corp round out the top five.

The report determines that US government spending on private contractors has increased more than 50 percent annually from FY 2004-2006--from $11 billion in 2004 to almost $17 billion in 2005 and more than $25 billion in 2006.

Though outsourcing has expanded significantly in recent years, the government has failed to devote sufficient resources to overseeing the management of the increasing number of contracts.

"While the billions of dollars involved and the complexity of these war-related contracts has only grown, the lack of oversight has been staggering," says CPI's Executive Director Bill Buzenberg.

CPI reports David Walker, Comptroller General and head of the United States Government Accountability Office, agrees that oversight shrunk over the same period when contracting expanded.

"We have identified about 15 systemic, longstanding acquisition and contracting problems that exist within the Defense Department—which is the single biggest contractor within the U.S. government—that we are still not making enough progress on," said Walker. "I mean, this stuff isn't rocket science."

CPI's Windfalls of War II also determined that:

* From 2004 to 2006, U.S. government contracts in Iraq and Afghanistan grew more than 130 percent, from $11 billion in 2004 to more than $25 billion in 2006.

* Iraq remains the clear priority of the U.S. government, the Center's research shows, with more than seven times as many contracting dollars designated for spending there as for Afghanistan.

* $20.4 billion in contracts went to a nebulous collection of companies identified by the U.S. government only as "foreign contractors." The Center has filed a Freedom of Information request for the 50 largest contracts—collectively worth some $19.6 billion—awarded to these unnamed companies.

* Foreign firms make up almost one-third of the top 100 contractors and more than $20 billion in contracts awarded went to unidentified companies. Together, foreign contractors and the unidentified companies accounted for approximately 45 percent of all the top 100 Iraq and Afghanistan reconstruction dollars awarded. If the largest of the unidentified contractors were counted as a single entity, it would rank on the top 100 list in the No. 2 spot, with more than $6 billion awarded.

* Some 30 percent of the $13 billion in cost-plus contracts in Iraq and Afghanistan were simple cost-plus, fixed-fee, which offer no performance or cost-saving incentives.

* Of the 31 foreign contractors on the top 100 list, 12 are based in Turkey, far more than any other country. U.S.-based minority-owned businesses received less than one-tenth of 1 percent of the total primary contracts awarded.

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