KBR Updates Definitization Schedule on LOGCAP Contract
Wednesday March 17, 2004 3:46 pm ET
HOUSTON--(BUSINESS WIRE)--March 17, 2004--KBR is pleased with the decision by the Army Materiel Command (AMC) that past invoices will be paid without withholding 15 percent.###
The decision on past invoices is consistent with our understanding of LOGCAP III contracts. We do not believe the 15 percent withhold is applicable to the LOGCAP III contract and this is a complicated issue which we are currently working through with our customer.
Despite the challenging environment that exists, to date KBR had been ahead of the revised schedule in the definitization stage of its task orders. However, just this week, AMC has been mandated to reduce their overall budget, thereby requiring that KBR re-estimate all work-to-date on the LOGCAP III contract. Because of this change, this will have an impact on the definitization schedule and could delay the date when the potential 15 percent withhold is put in place. Again, we do not believe the 15 percent withhold is applicable to the LOGCAP III contract.
"KBR's working capital investment in Iraq-related work now exceeds $1.2 billion," said Randy Harl, president and chief executive officer, KBR. "There are very few companies in the world that could or would adapt this quickly while, at the same time, finance an operation of this magnitude. KBR pays for the equipment, supplies, and manpower and is reimbursed after the government much later after a detailed review and clarification of any bill submitted."
If 15 percent of future billings are withheld from KBR pending final definitization approvals, it will be necessary to impose a corresponding 15 percent withholding on our subcontractors, because of the large working capital burden KBR is already carrying. This is in accordance with contract agreements with subcontractors. We remain confident about working through these and other issues in a cooperative manner.
Our services are designed to make the soldiers feel a little closer to home. We will continue to support the soldiers even though the price for this mission is the cost of having to defend ourselves at home.
Halliburton has a 60-year history of working with the government. KBR helped build U.S. warships in World War II, as well as projects in Somalia, Rwanda, and the Balkans. Halliburton also helped put out more than half of the oil well fires in Kuwait during the 1991 Gulf War. We are proud to serve the troops making them feel a little closer to home.
Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services and Engineering and Construction Groups. The company's World Wide Web site can be accessed at www.halliburton.com.
Halliburton, Public Relations
Wendy Hall, 713-759-2605