You Can't Be Too Thin Or Too Well Connected

Rivals Say Halliburton Dominates Iraq Oil Work. Companies, hoping to win a new round of contracts to rebuild the Iraqi oil industry, say the government has already arranged for Halliburton to get most of the work. By Neela Banerjee. [New York Times: NYT HomePage]

So the Army Corps of Engineers awards a $1 billion contract to Halliburton without bothering with competitive bidding. Why does this come as a surprise to anyone given the fact that Vice President Dick Cheney was the former head of this company? There's good reason why contracts should be awarded by competitive bidding:

. . . numerous bidders create competition.  Competition lowers the cost.  If bids are rejected arbitrarily or capriciously, contractors will not take the time and expend the money necessary to submit proposals.  They will infer favoritism.  This will result in fewer bids and higher bids.  The statute providing for the award of a contract for a public improvement to the lowest responsible bidder was enacted for the protection of bidders. Patterson Contracting Co. v. Hackensack.

Before you cry too many tears for the withdrawing company, Bechtel, just remember that they've been the beneficiary of many of these sweetheart deals in the past. Nevertheless, I don't know people don't find this conduct outrageous, especially given the circumstances by which we were led into this war to begin with.

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