Army Decides Not to Dock Halliburton

From Associated Press

February 4, 2005

WASHINGTON — The Army said Thursday it would not withhold any of the payments owed to Halliburton in a contract providing services to U.S. troops in Iraq and elsewhere.

The Army changed its position several times on whether it would withhold 15% of the payments because of billing disputes. The penalty could have cost the company, formerly headed by Vice President Dick Cheney, $60 million a month.

Dan Carlson, spokesman for the Army Field Support Command in Rock Island, Ill., said no money was withheld because the Army had granted the company waivers pending the decision.

Halliburton subsidiary KBR, formerly known as Kellogg Brown & Root, has been providing the military with logistical services that include food, sanitation, transportation, laundry, base operations and maintenance. Most of the services are in Iraq, Kuwait and Afghanistan.

KBR won the contract in 2001 after competitive bidding, and has been paid $6.4 billion. Work requirements could bump the figure to $9.3 billion in the fiscal year ending Sept. 30, with that number likely to grow.

Democrats in Congress have repeatedly raised the question of whether Halliburton received favored treatment.

Cheney has denied any favoritism and said he severed ties with the company when he first ran for vice president.