To: techguerrilla who wrote (47675 ) 9/8/2004 1:10:39 AM From: ChinuSFO Respond to of 81568 US army to split up Halliburton's no-bid contract in Iraq Sep 07 '04 <font size=3> PARIS (AFP) — The US army plans to break up a multi-billion-dollar contract awarded to services group Halliburton to feed, house and look after troops in Iraq, the Wall Street Journal Europe reported. The move, which the report said had been announced in an internal memorandum, includes putting contracts worth up to 13 billion dollars (11 billion euros) out for competitive bidding. It comes more than a year after Halliburton won the controversial no-bid deal, which has been the target of accounting problems and allegations of overcharging. Vice President Dick Cheny was the group's chief executive until he took office in 2001, but has denied any lingering ties to the company. US defense department officials were quoted by the newspaper as saying that the decision to rebid the work was not meant to penalize Kellogg Brown and Root (KBR), the Halliburton division that handles work in Iraq. Rather, they said, greater efficiency could be found by parcelling out the work to a wider range of companies. Halliburton spokeswoman Wendy Hall said the group had expected the move, and that KBR would consider bidding for part of the work. The Wall Street Journal cited the internal army memo, issued by procurement chief Tina Ballard, as directing top officials "to immediately begin the transition to competitively awarded sustainment contracts for support of US military forces in Iraq". In particular, the army appears to be increasingly frustrated "with efforts to devise a a final estimated cost of the work", the report said. One option would be for the army to estimate costs on its own, though that might make it difficult for KBR to meet the estimate. A key element in the present contract is a two-percent bonus awarded to the company if it brings the contract in on budget, and the report quoted Hall as saying "the award fee is where you make your money". On August 17, Halliburton said that the Pentagon would withhold 15 percent of future payments to the company after accusing it of inadequate accounting for contract work in Iraq and Kuwait. Halliburton has also been accused of gouging the Pentagon for gasoline delivered in Iraq. An internal Pentagon audit, released earlier in the month, faulted the Houston-based group for failing to account for some of the money it spent under the contract. The audit, concluded August 4, highlighted a series of problems in KBR's accounting system related to the costs of providing food, shelter and other support to American troops in Iraq and Kuwait. keepmedia.com