Pentagon continues to blast Halliburton's suspicious bills
24 Nov. 2004
WASHINGTON, Nov. 24 (HalliburtonWatch.org) -- Halliburton blamed the U.S. presidential campaign for the intense public scrutiny over its military contracts, but widespread post-election criticism persists. ###
Today, Stuart Bowen, the Pentagon's special inspector general for Iraq reconstruction, criticized Halliburton for failing to verify suspicious invoices or explain why it billed the government for work that was apparently never undertaken or completed. He called on his superiors at the Pentagon to withhold 15 percent of future payments owed to Halliburton in order to deal with the billing crisis and protect taxpayers.
Under federal contracting law, government agencies can withhold 15 percent of future payments if contractors submit suspicious invoices or fail to justify expenses under standard accounting procedures.
"We agree with U.S. Army Materiel Command and DCAA [Defense Contract Audit Agency] positions [on the withholding issue]," said Bowen in a memorandum to superior officers. The Army Materiel Command and the DCAA had called on the Pentagon earlier this year to withhold payments to Halliburton, but the Bush administration has so far refused those requests. Instead, another department of the Pentagon released a report praising Halliburton.
In August, Pentagon auditors reported that Halliburton's KBR subsidiary failed to justify 43 percent of $4.18 billion in expenses ostensibly incurred by the company in the Middle East. It found KBR's "internal control policies" are "inadequate for providing verifiable, supportable, and documented cost estimates that are acceptable for negotiating a fair and reasonable price." Pentagon officials told the Journal that no defense contractor has had its cost-estimating system ruled "inadequate" in years.
Pentagon auditors have given Halliburton at least three separate extensions this year to explain the many suspicious bills coming out of operations in the Middle East. Nevertheless, the billing dispute remains unresolved.
The suspicious bills were submitted by Halliburton's KBR subsidiary for logistics work in Iraq and Kuwait. Logistics work includes transporting supplies, feeding the troops at military cafeterias and building military housing. KBR performs these duties under a contract known as LOGCAP, awarded by the Army Corp of Engineers. KBR is reimbursed by the government for its expenses, then paid a fee of between 1 and 7 percent of those expenses.
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Memorandum from Stuart Bowen, special inspector general for Iraq reconstruction