Halliburton Defends Iraq Work, Open to Review

[MORTARDUDE]

Halliburton Defends Iraq Work, Open to Review




NEW YORK (Reuters) - Halliburton Co., the oil services company facing Pentagon (news - web sites) allegations that it overcharged on U.S. government contracts in Iraq (news - web sites), on Friday defended its work and said it welcomes a full review of its activities.



The Houston-based company denied that its Kellogg, Brown & Root unit, which has performed engineering services for the military since World War II, overcharged the government by more than $120 million for fuel deliveries and meal services in Iraq under two contracts.


Critics of the Bush Administration say Halliburton, formerly led by Vice President Dick Cheney (news - web sites), has unduly benefitted from its government connections.


"It is not fact that KBR has overcharged," Chairman and Chief Executive Dave Lesar said. "KBR has acted in full accordance with its fiduciary and contractual responsibilities."


Lesar, responding to Pentagon allegations of overcharging $61 million for fuel deliveries, said the Army Corps of Engineers directed Halliburton to buy and deliver fuel from Kuwait. The company sought and received bids from four suppliers and only one met Corps requirements, he said.


Halliburton has tried to transfer the fuel delivery mission to a local supplier, Lesar said. However, neither the company, the Corps nor the U.S. government's Coalition Provisional Authority in Iraq have been able to find a replacement.


Lesar said Halliburton "only makes a few cents on the dollar" for the fuel deliveries. The company also cited an Army Corps of Engineers report that showed ongoing audits have found no signs of overcharging.


The fuel deliveries fall under a contract awarded, without competition, to Halliburton in March. So far the company has billed $2 billion under the contract, which has a cap of $7 billion. Halliburton receives a small portion of the costs as income.


The company, also responding to charges it overbilled for cafeteria services by $67 million, said it believes the Pentagon is referring to "a proposal, not an invoice" for the construction of cafeteria facilities. Halliburton did not submit an invoice for the charges to the Defense Department.


Halliburton said it will cooperate with all government agencies.