Here's the scam. Federal law provisions allow the awarding of no-bid contracts to tribal businesses. While the rules of this program stipulate that between 15 and 50% of the work must be done by employees of the tribal company, the tribe can form joint ventures with third party companies and designate the non-native companies' employees as their own. Enter Halliburton et al.
Since 1999, government contracts to tribal companies have risen from $250m ($200m in single bid contracts) to $1.70b ($1.35b single bid) in 2003.
So, What's the big deal? you may ask. The big deal is that companies like Halliburton are circumventing free market conventions at every opportunity. For example, Halliburton set up a sham offshore company in the Cayman's to allow them to do business in Iran. Halliburton's former CEO, Dick Cheney, is now in the White House. He appointed an old buddy of his, whom he worked for as an intern in the Nixon administration, to Defense secretary: Donald Rumsfeld. In the last four years, Halliburton has enjoyed unprecedented profitability, owing much to the award of no-competition contracts. The bidder has neither to demonstrate the economy or superiority of their bid as there are no competitors to supersede.
You can see my other posts on Halliburton from July:
Halliburton -- Building an Unsustainable Future
Sometimes, I Hate It When I'm Right