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Army To Rebid Halliburton Unit's Contract Print

USA Today - July 13, 2006

WASHINGTON - The Army will rebid the multibillion- dollar contract under which a Halliburton subsidiary has been providing services to troops around the world after years of complaints over how the deal has worked in Iraq.

Critics of the contract said that the move was overdue and that hundreds of millions of dollars had probably been wasted.

"It has taken them far too long," Sen. Byron Dorgan, D-N.D., said of the Army. "I believe literally hundreds of millions, and probably billions, of dollars have been wasted - it's almost an unbelievable amount of waste and abuse and likely fraud."

Halliburton subsidiary KBR, also known as Kellogg Brown & Root, provides food, water, shelter and other logistical support for troops under a 2001 contract that has been extended several times.

Halliburton is a Texas-based oil services conglomerate once led by Dick Cheney.

Bush administration officials have come under fire since the beginning of the war in Iraq for awarding more than $10 billion to the company and its subsidiaries in 2003 and 2004, some of it in no-bid contracts. There have been allegations of fraud, poor work, overpricing and other abuse, which the company has denied.

Army spokesman Dave Foster said Wednesday that although the service will rebid the contract, it has not decided how that will be done. KBR will be allowed to bid in the new competition, but one option Army officials are considering is to divide the work among three companies.

Asked why the contract was being discontinued, Foster said, "The Army lives on 'lessons-learned. ' We get better each and every time we do it." Halliburton spokeswoman Melissa Norcross said it was "neither unusual nor unexpected that the . contract may be replaced with another competitively bid approach."

The Washington Post reported the decision on the contract Wednesday, saying the Army had paid KBR $7 billion last year and is likely to pay $4 billion-$5 billion this year. 

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