If you had the opportunity to watch “Iraq for Sale” you will understand how cost plus contracts have cost the American tax payers million of dollars. But, before I talk about cost plus contracts, I will say the following. I am all for companies making profit. However, when companies routinely and knowing try to skim on the work they were contract for which in the case of Halliburton, puts American troops at risk then we have issues of potential criminal actions that should be considered.

For those who are not aware of what cost plus contracts are here are the basic.

Halliburton earns money from the government primarily through its “cost-plus” contracts. Under a cost-plus contract, a government contractor like Halliburton purchases all the necessary items to complete a job order and is subsequently reimbursed all those costs from the government — and then paid a percentage of those costs (the plus) as a fee. A typical contractor earns a base fee of 1 percent of the estimated contract cost and an “incentive fee” of up to 9 percent of the cost estimate based on the contractor’s performance in a number of areas, including cost control. The upshot: The contractor will never spend $1 million to do a job when it can spend $10 million and thereby earn a higher fee.

OK, I won’t get to technical on the above explanation of a cost plus contact but specific and numerous examples were giving during the film. One example was the simple task of doing laundry. The soldiers are required to send their dirty clothes to Halliburton for cleaning. One bag of laundry which can be done for $3-$4 here in the U.S., will be turned into a $100 bag of laundry by using cost plus pricing.

One of Halliburton’s cost plus contract is officially called Logistics Civil Augmentation Program “LOGCAP.” Under this contract, Halliburton/KBR is contracted to feed, house and transport troops in the Middle East and Iraq.

Another frightening example is found here.