Halliburton Hits Another Billing Snafu in Kuwait
Mon Feb 2,12:39 AM ET
Halliburton Co. (NYSE:HAL - News) allegedly overcharged more than $16 million for meals at a single U.S. military base in Kuwait during the first seven months of last year, Monday's Wall Street Journal reported, citing Pentagon investigators auditing the company's work.
The allegations, involving food-service work done by Halliburton subsidiary Kellogg Brown & Root, come on the heels of another KBR dispute and have spurred an expansion of an already widening inquiry into Halliburton's government work in Iraq.
Last month KBR reimbursed the Pentagon $6.3 million after disclosing that two employees had taken substantial kickbacks from a Kuwaiti subcontractor in return for work providing services to U.S. troops in Iraq. KBR also has been accused of overcharging for gasoline under an Army Corps of Engineers contract. The corps has cleared KBR of any wrongdoing, but the Pentagon continues to investigate the dispute.
Because of the new meal-billing discrepancies, 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 "alert" sent Friday to more than a dozen U.S. Army contracting officials and reviewed by The Wall Street Journal.
This dispute focuses on meals served at Camp Arifjan, the huge U.S. military base south of Kuwait City. The e-mail memo that went out Friday 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 difference in cost for that month exceeded $3.5 million, according to Pentagon records. The Pentagon last year paid KBR more than $30 million for meals at the camp from January through July, a tab that included charges for nearly four million meals the government asserts were never served. Pentagon officials couldn't provide an estimate for the total cost of feeding troops in Iraq.
In response to the latest allegations, KBR agreed privately Friday to repay the money until the company can prove that its billing procedures were appropriate, according to people familiar with the situation.
KBR has subcontracted the work at Camp Arifjan to a Saudi company, Tamimi Global Co., one of five subcontractors providing food services for U.S. troops and personnel in Iraq and Kuwait under a huge Pentagon contract that KBR won during 2001 to build military bases and cater to the needs of the U.S. Army around the world.
Wall Street Journal Staff Reporter Neil King Jr. contributed to this report.
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