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Pentagon knew Halliburton was prone to overcharges before awarding no-bid contract
May 15, 2004

WASHINGTON, May 15 (HalliburtonWatch.org) -- The Army awarded Halliburton a no-bid contract in March 2003 despite a secret Pentagon report which found the company had "significant deficiencies" that could lead to defrauding the government.

The Pentagon's report was given to Hearst News Service under the Freedom of Information Act over Halliburton's objections.

Seven months before the Army awarded the controversial no-bid Iraq contract to Halliburton's subsidiary, KBR, the Defense Contract Audit Agency (DCAA) found KBR's deficient billing procedures could lead to fraudulent cost overcharges.

The DCAA said the deficiencies "have adversely affected the organization's ability to record, process, summarize and report billings" charged to U.S. military contracts.

According to Hearst News, "Officials at the Army Corps of Engineers did not respond to repeated inquiries about why they awarded the contract in light of KBR'S billing problems." Hearst further reported, "Marine Corps Lt. Col. Rose-Ann L. Lynch, a spokeswoman for the agency, said in a written statement last week that the company has not fixed the billing problems and the agency has uncovered six more failures since the 2002 report that outlined three problem areas."