Army to pay Halliburton unit most of disputed costs

Published: February 26, 2006

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A disputed no-bid contract in Iraq which Pentagon auditors determined contained "excessive" charges will be paid for almost in full by the Army, according to a story set for the front page of Monday's New York Times, RAW STORY has learned.

Excerpts from the article written by James Glanz:


The Army has decided to reimburse a Halliburton subsidiary for nearly all of its costs on a disputed $2.41 billion no-bid contract to deliver fuel and repair oil equipment in Iraq, even though the Pentagon's own auditors had identified more than $250 million in charges as potentially excessive or unjustified.


The Army said in response to questions on Friday that questionable business practices by the subsidiary, Kellogg, Brown & Root, had in some cases driven up the company's costs. But in the haste and peril of war, it had largely done as well as could be expected, the Army said, and aside from a few penalties the government was compelled to reimburse the company for its costs.

Under the type of contract awarded to the company, "the contractor is not required to perform perfectly to be entitled to reimbursement," said Rhonda James, a spokeswoman for the southwestern division of the U.S. Army Corps of Engineers, based in Dallas, where the contract is administered.


New York Times subscribers can read the rest of the article at this link.


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