- WASHINGTON (Reuters) - Pentagon
auditors said on Wednesday they expected soon to receive documents from
the Army that Halliburton paid fair prices for fuel brought into Iraq,
squashing price-gouging allegations against Vice President Dick Cheney's
former company.
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- The Defense Contract Audit Agency said Army Corps of
Engineers officials overseeing the oil contract had promised a "business
case" that showed prices billed by Halliburton unit Kellogg Brown
and Root for fuel delivered by a subcontractor were "fair and reasonable"
and the issue would then be closed.
-
- "Once DCAA receives this business case stating that
the contracting officer has concluded the subcontract fuel prices are fair
and reasonable, that will conclude the DCAA audit work on this issue,"
said a statement from DCAA Executive Officer Dan Tucciarone.
-
- "The (Army Corps) contracting officer's decision
precludes any further pursuit by DCAA of the issue, in as much as the contracting
officer is the deciding authority for the Government on such matters,"
he added.
-
- The Army Corps of Engineers said draft documents had
been completed and the final version would be delivered soon to the DCAA.
He had no further details.
-
- Asked whether that meant price-gouging claims would be
dropped against the company if the Army Corps document said pricing was
fair, a defense official said that was the case.
-
- "We will consider the $61.7 million fuel-pricing
issue as being resolved," said the spokesman.
-
- Last month, a draft Pentagon audit found evidence KBR
may have overcharged the Army Corps of Engineers by $61.7 million for fuel
brought into Iraq via a Kuwaiti subcontractor called Altanmia Commercial
Marketing Company.
-
- The audit also examined other issues under two Halliburton
contracts with the military, and the defense spokesman said all other contract
costs billed to the government by KBR would be evaluated by DCAA.
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- COMPANY DENIED PRICE GOUGING
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- Halliburton strongly denied allegations of price gouging
and said it bought the fuel at the best possible price and transported
it under extremely hazardous conditions. Pressure eased on the company
over the pricing issue after Army Corps chief Lt. Gen. Robert Flowers signed
a waiver on Dec. 19 that KBR did not need to provide certified "cost
and pricing data" related to a sole-source fuel contract with Altanmia.
Flowers' unusual waiver came after lower-level Army Corps officials concluded
KBR had obtained adequate price competition in May and bought the fuel
and delivered it to Iraq at a "fair and reasonable price."
-
- Transporting fuel into Iraq has been a difficult, often
embarrassing, mission for the Texas firm, which has faced a barrage of
allegations from Democrats in particular, who say the company got the work
because of its political connections.
-
- Cheney was chairman of Halliburton before he became President
Bush's vice president three years ago.
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- The contract to deliver fuel to Iraq is part of a bigger
no-competition deal signed last March with the Army Corps of Engineers
to rebuild Iraq's oil industry and is set to be replaced by two competitively
bid ones to be announced by Jan. 17.
-
- The U.S. military said last week its own fuel agency
would be taking over the job of bringing in fuel to Iraq. The Defense Energy
Support Center is set to award new contracts for the job by April but until
then, KBR will continue to do the work.
-
- The DESC issued a pre-solicitation notice on Wednesday,
inviting interested companies to apply for work to deliver by truck kerosene,
unleaded gasoline, diesel and liquefied petroleum from April 1 through
June 30. No prices were provided on the government procurement Web page
(www.fedbizopps.gov).
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