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CONTRACTS DRAW SCRUTINY
Blackwater's rise has coincided with the increasing use of private security companies in the Iraq war. Erik Prince, heir to a Michigan auto parts fortune, started the company in 1997; it has received millions of dollars' worth of no-bid contracts. Blackwater has had 27 contractors killed during the war.
The men killed in Fallujah were guarding a convoy for food services contractor ESS. Under the contract, the company charged $815 a day for the work of a basic security guard, who was paid $600 a day. Blackwater was also reimbursed for expenses, such as room and board, insurance, and overhead. The company worked under two other subcontractors, including the food company ESS, which added their profit to the work. The general contractor was Halliburton, which charged overhead and a 2 percent profit.
The contracts sparked questions in Congress, which has conducted hearings. But the company is still active in Iraq and is starting to build armored vehicles, hoping to sell them to the military.
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