Halliburton faces audit criticism

The audit of a company owned by energy company Halliburton into contracts awarded as part of the reconstruction of Iraq has found the company failed to provide a clear record of its costs.

Link: Audit watchdog set to examine Iraq contracts

The Defense Contract Audit Agency questioned the figures provided by KBR, a unit of Halliburton, formerly run by US vice-president Dick Cheney.

Looking into over $108m (£56m) of a contract extension worth $875m, in which no competing bids were sought, the DCAA queried several items, including a bill of $27.5m for transporting propane worth $82,000.

One delivery of fuel to KBR in Kuwait by approved contractor Altanmia cost over $61m alone. It is also accused of adding $16.8m in costs to its Turkish fuel bills, despite having fixed-price contracts with suppliers.

The DCAA also judged the estimating systems of KBR to be ‘inadequate’.

Despite claims from Halliburton that the fuel was delivered in a wartime environment, the auditors said in the report: ‘It is not reasonable to use prices negotiated in only a few days, under extremely difficult circumstances, for the entire period of performance which extend for almost a year’.

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