Posted on: Tuesday, February 17, 2004

Halliburton delays billing military for meals

By Jackie Spinner
Washington Post

WASHINGTON — Halliburton Co. said yesterday that it will temporarily delay billing the military $140.8 million for food services at dining facilities in Kuwait and Iraq until it can reconcile its meal-counting system.

The company and its KBR subsidiary have agreed to credit the government $34.5 million for unserved meals under a broad logistical contract that KBR has to provide food and laundry and other support services for U.S. troops around the world.

KBR has been reviewing its billing practices in response to allegations that it overcharged for work in Iraq. Pentagon auditors announced in December that the company might have overpaid a Kuwaiti supplier $61 million to import fuel to Iraq. And last month the company agreed to pay back $6.2 million to cover overcharges by a Kuwaiti firm that included possible kickbacks to one or two KBR employees.

"It is important to understand that this is not any sort of admission," Randy Harl, KBR president and chief executive, said in a statement on the food service contract. "As a responsible government contractor, it is the right thing to do."

KBR, which uses projected head counts to bill for meals, is negotiating with the U.S. Army to come up with a new counting method, the company said last week in a filing with the Securities and Exchange Commission. The amount of unbilled invoices may go up or down depending on the counting system selected, it added.

In a Feb. 11 letter to the Defense Audit Contracting Agency, which is reviewing all government contracting work in Iraq, Alfred Neffgen, chief operating officer for KBR's government operations group, said the company would complete a final analysis of its food-service billing within 30 days.

"It concerns us that this issue is being portrayed by some as overcharging," he wrote. "There has been no overcharging. Costs have been incurred by KBR and per the contract should be reimbursed."