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U.S.A.: Halliburton Could Get $1.5 Billion in Added Iraq

Halliburton Co., under scrutiny for its contracts in Iraq, would receive an extra $1.5 billion as part of the Bush administration's additional war spending proposal for fiscal 2005, a senior U.S. Army budget official said.

Reuters
February 25th, 2005

WASHINGTON - Halliburton Co., under scrutiny for its contracts in Iraq, would receive an extra $1.5 billion as part of the Bush administration's additional war spending proposal for fiscal 2005, a senior U.S. Army budget official said on Friday.

Halliburton, once led by Vice President Dick Cheney, is the largest corporate contractor in Iraq and has drawn fire for its no-bid contracts there, with auditors charging its Kellogg Brown and Root (KBR) unit overcharged for some work.

The Army's portion of a $81.9 billion supplemental spending package earmarked the extra funding for KBR under its LOGCAP (Logistics Civil Augmentation Program) contract to provide a wide range of services to U.S. troops in Iraq, the official said. The contract covers food and laundry services, trash collection, mail delivery and other support services.

If approved by Congress, that would bring the total spending under KBR's LOGCAP contract to about $6 billion in fiscal year 2005, about the same amount spent a year earlier, said the official, who spoke on condition of anonymity.

He declined to estimate how much the Army would spend on the LOGCAP contract in fiscal 2006, but said the top U.S. commander in Baghdad was putting a big emphasis on controlling costs by setting clear standards for the services provided.

Gen. George Casey told a newspaper earlier this month that KBR had submitted budget estimates that exceeded the Army's proposed spending by $4 billion, adding, "someone has made assumptions that have driven the costs through the roof."

Overall, KBR has earned $7.2 billion under a massive 2001 logistics contract with the U.S. military and could earn more than $10 billion under that deal. It has separate deals with the government for reconstruction work in Iraq.

The senior Army official said the proposed supplemental budget request included about $4 billion in spending to repair or upgrade weapons damaged or worn out by the war in Iraq.

In addition, the budget request included $570 million in funding for replacement of weapons lost in battle, including 13 AH-64 Apache helicopters built by Boeing Co. and five UH-60 Black Hawk helicopters built by the Sikorsky Aircraft unit of United Technologies Corp.

The budget request also included $3.3 billion for new Bradley fighting vehicles made by United Defense Industries Inc., Abrams tanks made by General Dynamics and armored Humvees.





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