Army won't withhold Halliburton payments

/ Source: The Associated Press

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

The Army flip-flopped several times last year on whether it would withhold 15 percent of the payments, which could have cost Vice President Dick Cheney's former company $60 million a month.

Dan Carlson, spokesman for the Army Field Support Command in Rock Island, Ill., said the money never was withheld because the Army granted the company waivers pending the decision made Thursday.

The potential withholding was related to billing disputes for work orders in which requirements may change. For instance, the Army may initially need a specified number of contractor trucks and then decide it requires more or fewer vehicles.

The decision for full payment was made at the Pentagon by Deidre Lee, director of defense procurement and acquisition policy, Carlson said.

The logistical services are provided by Halliburton subsidiary KBR and include food, sanitation, transportation, laundry, base operations and maintenance. Most of the services are provided in Iraq, Kuwait and Afghanistan.

KBR won the contract in 2001 after competitive bidding, and has been paid $6.4 billion so far. Work requirements could bump the figure to $9.3 billion in the fiscal year ending Sept. 30, but the number would continue to grow beyond that, since the services are expected to continue.

Democratic members of Congress have repeatedly questioned whether Halliburton received favored treatment because of Cheney's former connection with the company.

While Cheney has denied any favoritism and said he severed ties with the company when he first ran for vice president, a Senate Democratic criticized the latest ruling.

"Once again, the Bush administration is allowing Halliburton to skirt the rules and get special treatment," said Sen. Frank Lautenberg of New Jersey. "Halliburton has played fast and loose with billions in taxpayer dollars, and instead of a slap on the wrist they are getting a pat on the back from the Bush administration."

KBR said the decision "means that KBR will be able to continue working closely with the Army Field Support Command ... while still providing the same great level of support to the soldiers in the field."