Maintaining Optimism in the Face of Reality. Occasional observations on the state of the world, society, business and politics. Usually anchored by facts, always augmented by opinion.
But here's the news flash (from over a week ago): despite claims of overcharging (which have been amended), Halliburton, discussing the issue in an analyst conference call, doesn't seem to think that they are making insane money on the deal [Allentown Morning Call]:
"I'm not sure that we're going to rebid if it's packaged into too many pieces in Iraq," Halliburton Chief Executive Officer David Lesar told investors at an energy conference in New York sponsored by Lehman Brothers Inc. "If we do choose to rebid, we're going to jack the margins up significantly."
If Halliburton loses some work, the company will reduce its working capital tied up in Iraq, Lesar said in remarks broadcast on Halliburton's Web site. "I don't see that we can lose, whatever the outcome," he said.
Halliburton would be in a good position to take part in the bidding because of its experience in Iraq, said James Halloran, who helps manage $33 billion, including about $1 million in Halliburton shares, at National City Private Client Group in Cleveland.
"I don't think Halliburton will go back and be in a rush to bid these contracts just to get them back in a hurry," Halloran said in an interview. "They can have the opportunity to improve the standards of the payout of these things over what they had."
You can find more from The Street here as well. I would really enjoy seeing someone else get this bid and having the costs associated with the new contract turn out to be even higher.
I'm not going to go off on a rant about the fact that a no-bid contract probably makes sense, versus a typically protracted government procurement process. It's not as if many companies can actually even perform the work that Hallburton is doing over there, and sometimes governments need to move fast.
Right now, it seems all the Kerry campaign has to run on is some cronyism claims and now some fear-mongering about what Bush has planned for his second term.
I do think there is a legitimate question as to how much the US relies on contractors as part of its military operations, however this Cheney/Halliburton conspiracy cronyism story just obscures a legitimate policy debate, but that's politics for you.
More on this if the dead horse continues to be kicked by the Kerry campaign.
e-mail post | Link Cosmos | [Permalink] | | Saturday, September 18, 2004