- The US army is preparing to abandon a contract with Halliburton,
the company formerly run by the vice-president, Dick Cheney, which has
been investigated for allegedly overcharging it.
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- The contract to provide housing, food and other services
to US troops in Iraq and Afghanistan, potentially worth $13bn (£7.2bn),
is expected to be broken into smaller parts and opened to competitive bids
in the next few months.
-
- The Halliburton division awarded the contract, Kellogg
Brown & Root, has been fighting a rearguard action against allegations
of massive overcharging for much of the past year.
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- Last month Pentagon auditors suggested that the army
should withhold payment of 15% of Halliburton's invoices in Iraq, saying
that the company had been unable to account properly for at least $1.8bn
of the $4.3bn it had so far asked for.
-
- The army is still considering the recommendation.
-
- In a memo of August 25, cited by the Wall Street Journal
yesterday, Tina Ballard, the army's chief procurement officer, ordered
officials to "immediately begin the transition to competitively awarded
sustainment contracts for support of US military forces in Iraq."
-
- Halliburton has been swamped by controversy since it
emerged that it had been given contracts to repair oilfields and give logistical
back up to the army in Iraq.
-
- To the Democrats Halliburton has become shorthand for
cronyism and special interests in the Bush administration.
-
- The logistics work was given to the company without a
competitive tender under an existing 10-year contract to provide a wide
range of contingency services to US troops.
-
- The army is expected to invite tenders for six different
contracts.
-
- It is expected that they will include food services,
housing and transportation.
-
- Wendy Hall, a spokeswoman for Halliburton, said the company
had expected the army's decision.
-
- "Such a transition is anticipated," she said,
"and planned for in all our contingency operations.
-
- "Our contingency work in the Balkans was bid out
in much the same way."
-
- She said Halliburton would review the contracts on offer
before deciding whether to make a bid.
-
- The memo is said to address the increasing frustration
of army officers at the effort to reach a final estimate for the work being
carried out by KBR.
-
- One option apparently being considered is for the army
to come up with its own quote.
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- Halliburton has accused its critics of using it to score
political points against Mr Cheney.
-
- But the company has provided the Democrats with plenty
of ammunition.
-
- Last month it admitted finding evidence that a consortium
it leads had at least discussed bribing Nigerian officials to win a contract.
-
- And it paid $7.5m to settle a claim by the US financial
watchdog that it had failed to disclose an important accounting change
during Mr Cheney's tenure which allowed it to keep meeting Wall Street's
forecasts.
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- Guardian Unlimited © Guardian Newspapers Limited
2004 http://www.guardian.co.uk/usa/story/0,12271,1299490,00.html
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