A Halliburton subsidiary will now receive all but $9 million of $222 million in disputed costs that Pentagon auditors questioned for oil industry work in Iraq. The decision by Army officials to pay came as somewhat of a surprise to most observers. At issue is a $2.4 billion contract awarded to Kellogg Brown & Root, which is a Halliburton subsidiary, to deliver fuel to Iraqis and repair oil industry equipment. Interestingly, the 2003 contract was awarded without competitive bidding. Many believed that the company’s links to Vice President Dick Cheney, once its chief executive officer, gave them a distinct political advantage. According to a spokesperson, the Army did a “lengthy, detailed” review of the $221.9 million in challenged costs and resolved the questions largely in favor of Kellogg Brown & Root.

Houston-based Halliburton is one of the largest contractors in the massive effort to rebuild Iraq’s economy and public works that were virtually destroyed in the early stages of the war. In 2003 and 2004 alone, the government awarded more than $10 billion to Halliburton and its subsidiaries, some of it by way of no-bid contracts. The Army’s decision to pay much of the disputed charges was first reported in The New York Times. I don’t really see how our government can afford to award no-bid contracts in Iraq or anywhere for that matter and certainly not to politically–connected companies such as Halliburton. It just doesn’t meet the smell test with taxpayers.

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