WASHINGTON - Halliburton reached agreement with the US military on a huge billing dispute for services a subsidiary provided to support operations in the Middle East.
The deal confirms 27 contracts with the US army worth a total of 10.5 billion dollars for Halliburton, a company once headed by Vice President Dick Cheney.
Part of the agreement, announced late Tuesday, includes a resolution of a billing dispute over meals for US troops in Iraq and Kuwait following allegations of overbilling from the Kellogg, Brown and Root (KBR) subsidiary.
The government will keep 55.1 million dollars out of about 200 million dollars withheld during a review of billing for dining facility services that KBR provided to US and coalition forces during the first nine months after the 2003 invasion of Iraq.
"The negotiated agreement resolves a payment withholding issue that has been pending since February 2004," Halliburton said.
The company added that it took over a year to finalize the contracts amid criticism that KBR had overcharged the military for its services, prompting the Pentagon to withhold some payments while it reviewed KBR's billing practices.
"Under the terms of the agreement, AFSC will pay KBR 1.176 billion dollars while retaining 55.1 million dollars of approximately 200 million in payments that had been withheld while these issues were resolved," Halliburton indicated.
In turn, KBR will negotiate payments to subcontractors that it hired to complete the work, according to the company.
"As we have said before, we have withheld amounts from our subcontractors based on the government's actions, and we do not expect any negative financial impact from this settlement as a result," Bruce Stanski, senior vice president of KBR's government and infrastructure division, said in a statement.
Halliburton has been the subject of several investigations for its contracts with the Pentagon and some lawmakers have argued that it received special treatment because of its connections with Cheney.
04/06/2005 14:53 GMT