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Halliburton overcharged for meals by $186 million
15 June 2004

WASHINGTON, June 15 (HalliburtonWatch.org) - The Pentagon's Defense Contract Audit Agency (DCAA) completed a comprehensive review of Halliburton's system for billing the government for work in Iraq. The DCAA said Halliburton billed the government for 36 percent more meals than was actually served to the troops while an internal KBR report said it had overcharged by 19 percent. The Pentagon refuses to reimburse Halliburton for those meal overcharges, which amounted to $186 million. KBR and its subcontractors serve meals to U.S. troops at over 60 dining halls throughout Iraq and Kuwait. The DCAA concluded that KBR's method for billing the government is "inadequate" and ordered the firm to submit all bills to the DCAA for provisional approval prior to being reimbursed by the government for contract costs.

In a related development, the Los Angeles Times reported that "the Army recently renegotiated a contract that Halliburton had with a Kuwaiti company to provide meals. By contracting directly with the Kuwaiti company instead of going through Halliburton, the Army knocked 40 percent off the cost of the contract." Once the Pentagon dealt directly with the Kuwaiti-owned company, known as Timimi Co., the cost per-meal dropped from about $5 to about $3, according to GAO Comptroller David Walker.

The DCAA also disclosed that the U.S. Justice Department is conducting a criminal investigation into bribes paid by a Kuwaiti firm to two Halliburton employees. The bribes, estimated at $6.3 million, are also being investigated by the Pentagon's Inspector General.