Halliburton contract increased & extended

Halliburton contract extended

Questions surround the firm's accounting, even as the Army orders $5 billion in services.

By Griff Witte / Washington Post

WASHINGTON -- The Army has ordered nearly $5 billion in work from Halliburton Co. to provide logistics support to U.S. troops in Iraq over the next year, $1 billion above what the Army paid for similar services the previous year.

The new order, which comes despite lingering questions about the company's billing, replaces an earlier agreement that expired in June 2004, but had been extended through this spring to ensure a continuous supply of food, sanitation, laundry and other logistical services for the troops, said Linda K. Theis, an Army spokeswoman.

The new order does not change the nature of Halliburton's work, but the higher price tag does reflect the growing demand for the company's services as U.S. forces continue to battle a stubborn insurgency two years after the fall of Saddam Hussein.

Halliburton subsidiary Kellogg Brown & Root has received more money from the U.S. involvement in Iraq than any other contractor. The company has been a lightning rod for criticism by those who think the company's high-level connections -- most notably its former chief executive, Dick Cheney, who is now vice president -- may have given it undue influence.

Under the Army's previous order for logistics support, Halliburton was paid $6.3 billion for work during the first two years of the occupation, including $3.98 billion between the beginning of May 2004 and the end of May 2005. Under the new deal, Halliburton will receive $4.97 billion to support U.S. troops in Iraq until May 2006.

Both orders stem from a 10-year contract known as LOGCAP, which KBR won in a competitive bid in 2001. As of the beginning of June, the Army had obligated nearly $12 billion to the company under the logistic contract, the vast majority of it for work in Iraq.

The new order took effect two months ago, but was made public. Theis, the U.S. Army Field Support Command spokeswoman, said there was "not a conscious decision" to keep the new deal quiet, but that her office had simply been too busy with other news.

Rep. Henry A. Waxman, D-Calif., a vocal critic of Halliburton, said the Army shouldn't be giving the company orders for more work at the same time it's citing the company for unreasonable bills.

"The accountability vacuum at the Defense Department is costing the taxpayer dearly," Waxman said in a statement.

The Pentagon last week confirmed a report by congressional Democrats that said the Defense Contract Audit Agency has questioned more than $1 billion of Halliburton's bills for work in Iraq under LOGCAP and an energy contract called Restore Iraqi Oil. Among the costs questioned were $152,000 for movie rentals, $1.5 million for tailoring and two multimillion-dollar transportation bills that appeared to overlap.

Pentagon spokeswoman Lt. Col. Rose-Ann L. Lynch said the questioned costs are not necessarily overcharges and that contracting officials have either resolved or are in the process of resolving most of the discrepancies.

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