After months of criticism from Democrats in Congress and government auditors for allegedly misspending and overcharging, Halliburton Co. got some good news yesterday.
The giant oil services company announced that a Pentagon review found that its purchasing-system practices "are effective and efficient and provide adequate protection of the Government's interest."
The news came in a letter from the Defense Contract Management Agency to Halliburton subsidiary Kellogg Brown & Root Inc., which has received about $4.5 billion for providing fuel, housing and other troop support in Iraq and Kuwait. "KBR has repeatedly said that its purchasing system provide the flexibility and responsiveness necessary to meet the needs of its customers in a war zone," the company's statement said.
"While expected, this is clearly good news," Andrew R. Lane, president and chief executive officer of KBR, said in a news release.
The letter in effect gives KBR wider latitude, under federal acquisition regulations, to award subcontracts without prior approval of a contracting officer. But it has no effect on other pending investigations and audits of the company's work.
Still pending, for example, is the decision whether the Army will withhold 15 percent of future payments to KBR because auditors concluded that the company has not provided basic data supporting at least $1.8 billion in bills.
Also not addressed in the new letter are questions about overcharging that have been raised by Pentagon auditors. In July a report by the staff of Rep. Henry A. Waxman (D-Calif.) said Halliburton charged the government $167 million more than necessary to import gasoline into Iraq.
Halliburton contends that it is being picked on for political reasons -- because Dick Cheney was the company's chief executive before being elected U.S. vice president in 2000.
"We will continue to work with all Government agencies to establish that our contracts are not only good for the United States, but also the company is the best and most qualified contractor to perform these difficult and dangerous tasks," the company statement said.