(5 of 5)
Many Iraqi businesspeople argue that the entire system of awarding subcontracts is flawed. In a country where cell-phone networks are rudimentary and Internet access is a luxury, all potential Iraqi subcontractors must register their interest on the Web. Requests for proposals are commonly issued less than two weeks before they are due, and site visits are frequently not allowed, making it difficult to estimate costs accurately.
Since last summer, KBR has held weekly meetings in Baghdad at which it unveils its latest contracting offers. The sessions have grown more and more heated. Anthony Zinni, former head of the U.S. Central Command (Centcom) and a retired Marine Corps general, is critical of the Bush Administration's Iraq policy and traces Iraqis' growing bitterness to one simple issue: jobs. "Why aren't Iraqis driving trucks for their own reconstruction and redevelopment?" he asks.
Halliburton says it does employ Iraqis--6,000 of them--as subcontractors in Iraq. But Iraqis say they are frozen out of the most lucrative subcontracting work and are particularly angered that the projects are going to companies in neighboring Arab countries, such as Saudi Arabia, Jordan, Kuwait and Egypt. "Iraqi companies are getting small contracts, like a few schools or a building renovation," says Halim, the construction executive. "But other Arabic countries are getting the bigger ones." KBR in Baghdad has no record of Halim's firm and says it is awarding about 90% of its subcontracting work to Iraqi-owned companies.
For some Iraqis, the prevailing sense that the reconstruction process isn't bringing enough benefits is as big a concern as security. Stories of corruption and opaque practices are overshadowing the real accomplishments scored by Halliburton and other companies in some aspects of the reconstruction. "To be fair, they did a good job," says Thamir Abbas Ghadhban, an adviser to Iraqi Oil Minister Ibrahim Bahr al-Ulum. "They got us electrical generators and parts for the Garmat Ali water-purification plant in Basra."
For better or worse, Halliburton's fate is tied up with the U.S. military. "We'll scale back when they scale back," says Lesar. "You have to realize this is a Pentagon-driven decision." Despite its criticisms of Halliburton, the Pentagon is standing by the company. "There are a number of contractors, including Halliburton, that are doing great work supporting our troops under combat conditions," says Lieut. Colonel Joe Yaswell, a Pentagon spokesman.
Lesar expects Halliburton to be in on Iraq's future oil business even after the U.S. military is gone, as his company now has Iraq expertise. But while the oil fields may need Halliburton, Iraq's business community may not be so sure. To the Iraqis, Halliburton and the military are virtually synonymous--they are simply "the Americans." Given the meager trickle-down effect, the complaints of unfairness and overcharging, the Iraqis may remember Halliburton not as a savior but as a profiteer. Just ask Abdul Halim and the others gathered last week, hoping to win some work. They are still waiting for their chance.
--Reported by Christopher Allbritton/Baghdad, Andrew Lee Butters/Kuwait City, Tom Dusevic/Sydney, Hassan Fattah/Amman, Andrew Purvis/Ankara, Cathy Booth Thomas/Dallas and Adam Zagorin/Washington