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Posted Wednesday, April 28, 2010 7:08 PM
The Pentagon's main supply agency has acknowledged awarding $1.4 billion in no-bid contracts to two foreign companies whose ownership and management seem extremely mysterious. The contracts, involving delivery of aviation fuel to U.S.-run air bases in Kyrgyzstan and Afghanistan, are currently under investigation by a subcommittee of the House Committee on Oversight and Government Reform, one of Congress's most powerful panels.
The Defense Logistics Agency said in a written statement to Declassified that last year it awarded a contract to a company called Mina Corp. Ltd. for supplying fuel to the Manas Transit Center, as the U.S.-run air base in Kyrgyzstan is known. The agency said Mina received the contract, potentially worth $729 million over three years, under a section of federal purchasing regulations allowing "contracting without providing for full and open competition." (The contract's initial term, the agency said, is for one year, with options for two one-year extensions.) The agency also said it had awarded a $720 million contract under the same provisions to a company called Red Star Enterprises for the provision of Russian-grade aviation fuel and JP-8 jet fuel.
Here is how authorities say the plan worked: Red Star Enterprises – a British fuel company was in charge of delivering aircraft fuel to Bagram. Once on base, KBR employees were responsible for signing receipts that proved how much fuel was received. Receipts were then submitted to the U.S. government by Red Star for payment.
Halliburton's former subsidiary, KBR, is a major construction company of refineries, oil fields, pipelines, and chemical plants. Halliburton announced on April 5, 2007 that it had finally broken ties with KBR, which had been its contracting, engineering and construction unit as a part of the company for 44 years.[11
The Death and Taxes poster contains a lot of information and is great for putting federal spending in context. However, the de-facto unit of measure is one billion dollars. I realized that people often have a hard time grasping just what one billion dollars is. So to provide further context to the poster, I am putting one billion dollars into perspective.