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US: Pentagon Settles Some Halliburton Billing Disputes

The Army Corps of Engineers has settled payment disputes for six out of 10 task orders costing about $1.4 billion under its Restore Iraqi Oil contract with Houston-based Halliburton. Auditors concluded the military had been overcharged by about $108.4 million for fuel brought into Iraq from Kuwait under the orders.

by Tom FowlerThe Houston Chronicle
October 26th, 2005

The Army Corps of Engineers has settled payment disputes for six out of 10 task orders under its Restore Iraqi Oil contract with Houston-based Halliburton.

Those task orders primarily dealt with fuel that the company's subsidiary, KBR, provided as part of a project to restart Iraqi oil field production after the 2003 U.S. invasion of the country.

The 10 task orders covered jobs costing about $1.4 billion. Auditors concluded the military had been overcharged by about $108.4 million for fuel brought into Iraq from Kuwait under the orders.

In a conference call this week, Halliburton officials said the six task orders had been settled in their favor.

"We have resolved the majority of that, over $1 billion of the $1.4 billion" in contracts, Chief Financial Officer Christopher Gaut said during the call. "So that's largely behind us, and we're just negotiating the few remaining task orders that were separate and had some other activities with them."

A Corps of Engineers spokesman confirmed the settlements but said he didn't know the terms.

Halliburton booked $24 million in third-quarter earnings related primarily to the partial settlement of the fuel dispute.

The company's billings have been under scrutiny by the Pentagon and members of Congress in the past. Democrats claim the company has been able to run up excessive charges largely because of "deficient Defense Department oversight and an unquestioning reliance on Halliburton's assurances."

The company says those claims have been exaggerated.

Halliburton's Iraq-related work in the third quarter accounted for $1.2 billion in revenue and $44 million in income.





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