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Halliburton in $16M food probe

Boss Hog

TRIBE Member
Halliburton in $16M food probe
Report: Contractor allegedly overcharged U.S. military for food-service work.
February 2, 2004: 9:49 AM EST

NEW YORK (Reuters) - Halliburton Co. allegedly overcharged more than $16 million for meals at a U.S. military base in Kuwait during the first seven months of last year, according to a published report Monday, citing Pentagon investigators auditing the company's work.

Because of the charges, which involve food-service work done by Halliburton (HAL: Research, Estimates) unit Kellogg Brown & Root, the Pentagon has extended its audit of KBR food services to include more than 50 other dining facilities in Kuwait and Iraq, according to an e-mail sent Friday to more than 12 U.S. Army contracting officials and reviewed by the Wall Street Journal.

The company issued a statement Monday, saying it is not an issue of overcharging, it's "about finding a good way to estimate the number of meals so soldiers can get fed. It's difficult to determine how many people will be at the dinner table in the middle of a war zone and the number must be based on estimates."

"We plan, purchase and prepare meals based on estimates. At times, soldiers are on leave or troops are shifted to other locations."

Last month, the Houston-based oil field services company admitted workers may have taken kickbacks from a Kuwaiti subcontractor supplying U.S. troops in Iraq, causing a potential $6 million overcharge to U.S. taxpayers. It sent a $6.3 million check to the U.S. Army Materiel Command, its customer, to cover potential overcharging.

According to the Journal, the latest dispute involves meals served at Camp Arifjan, a large U.S. military base south of Kuwait City. In the e-mail memo that went out Friday, it said that in July alone, a Saudi subcontractor hired by KBR billed for 42,042 meals a day on average but served only 14,053 meals a day, the paper said.

In response to the allegations, KBR agreed privately Friday to repay the money until the company can prove that its billing procedures were appropriate, the paper said, citing people familiar with the situation.

Alex D. from TRIBE on Utility Room