U.S.A.: Pentagon Gives $72 Million Bonus to Halliburton

The U.S. Army awarded $72 million in bonuses to Halliburton Co. for logistics work in Iraq, but had not decided whether to give the Texas company bonuses for disputed dining services to troops.
by Sue Pleming, Reuters
May 10th, 2005

LINK

WASHINGTON - The U.S. Army said on Tuesday it had awarded $72 million in bonuses to Halliburton Co. for logistics work in Iraq but had not decided whether to give the Texas company bonuses for disputed dining services to troops.
Army Field Support Command in Rock Island, Illinois, said in a statement it had given Halliburton unit Kellogg Brown & Root ratings from "excellent" to "very good" for six task orders for work supporting U.S. troops in Iraq.

The Army said its Award Fee Board in Iraq had met in March and had agreed to pay KBR bonuses for work it did in support of U.S. forces there.

The Army said in a statement later that while it had given the company an additional $72 million, it had denied KBR $10.1 million in bonuses and not paid the maximum allowed on any of the task orders.

"We have protected the taxpayer FIRST," said the Army in a statement released later, pointing out this paragraph had been "inadvertently left off" the original news release.

The Army said dining facility costs questioned by auditors from the Defense Contract Audit Agency had not yet been considered by the military's Award Fee Board. No details were available as to when this dining fee bonus would be resolved.

Much of Halliburton's work for the U.S. military, ranging from building bases to delivering mail, is on a cost-plus basis, which means the company can earn up to 2 percent extra depending on its performance.

Bonuses are awarded based on, among other factors, how efficient and responsible the company is to requests from the Army and is an indicator of how the Army views KBR's performance in the field.

New Jersey Democratic Sen. Frank Lautenberg, a vocal critic of Halliburton's performance in Iraq, said Halliburton did not deserve a bonus.

"It is outrageous that the Bush Administration would give Halliburton a bonus after we have seen its overcharges, sloppy accounting and kick-back schemes in Iraq," Lautenberg said. "Giving Halliburton a bonus is like giving your worst employee a raise."

KBR's logistics deal with the U.S. military has been in the spotlight from the outset in Iraq, with allegations by auditors that they overcharged for some work, including dining services.

In addition, investigators are looking into whether the Texas-based firm charged too much to supply fuel to Iraqi civilians, a claim the firm says is not justified.

Halliburton, which was run by Vice President Dick Cheney until he joined the 2000 race for the White House, has earned more than $7 billion under its 2001 logistics contract with the U.S. military.

Halliburton-owned firm gets bonuses
The Washington Post

LINK

WASHINGTON - The Army said Tuesday that it had awarded an additional $72 million in bonuses to Halliburton Co. subsidiary Kellogg Brown & Root for logistics support of the Iraq war.

The Army said it graded the company's performance "very good" or "excellent."

Halliburton's work in Iraq has been controversial because an early contract to rebuild oil fields was awarded without competition and because auditors had challenged its billings on some work. Vice President Dick Cheney was Halliburton's chief executive from 1995 to 2000.

The bonuses announced Tuesday were for a contract that the company won in competitive bidding to support the military in the Middle East and South Asia. Its value mushroomed after the wars in Afghanistan and Iraq. The company's services include construction and food and laundry service.

Linda Theis, a spokeswoman for the U.S. Army Field Support Command, said Tuesday that the awards totaled about 88 percent of the $82 million bonus pool set aside for the six task orders for work in Iraq.

Halliburton Homepage

The Halliburton Watch

The World According to Halliburton