Army Corps Clarifies Halliburton Contract

The Army Corps of Engineers has acknowledged that it alone awarded Halliburton Co. new business in Iraq, after initially suggesting that experts from other U.S. agencies played an important role in choosing the company formerly headed by Vice President Dick Cheney.

The corps said in a statement that it -- not an evaluation team cited on its Internet site -- selected Halliburton for a contract worth up to $1.2 billion. The corps is refusing to release records showing on what merits it made the decision.

Two of the evaluation team members, the Air Force and the Small Business Administration, said they were not part of the group and shouldn’t have been listed.

The Jan. 16 Halliburton award, to restore the oil industry in southern Iraq, was controversial. A Pentagon draft audit report in December said the company might have overcharged taxpayers up to $61 million in its importation of oil to Iraq.

Cheney’s office has said he severed relations with Halliburton when he ran for vice president in 2000. Halliburton has said its KBR subsidiary, previously known as Kellogg, Brown & Root, delivered fuel to Iraq at the best possible price and has denied any wrongdoing.

Kuwait’s energy minister has asked his nation’s top prosecutor to investigate allegations of overcharging and profiteering in the fuel contract between the state-owned Kuwait Petroleum Corp. and the Kuwaiti supplier of KBR.

One of the five evaluating agencies identified by the corps was the Defense Contract Audit Agency, the Pentagon entity that reported the preliminary findings of overcharges.

“At no time did DCAA make any recommendations on the contract award” to Halliburton, the agency said in a written statement.

David Levingston, a spokesman for the Air Force Materiel Command in Ohio, said, “The Air Force did not have any involvement in or review that contract.”

The Small Business Administration, the only nonmilitary agency listed, “was not involved in the contracting process,” spokeswoman Sue Hensley said.

The Army’s Tank-automotive and Armaments Command and the Defense Contract Management Agency would not comment on their roles.

The corps said, “The one person that made the selection was the source selection authority” in the Corps of Engineers, in accordance with federal contracting rules.

As for the evaluating team, the corps said outside agencies had helped analyze the proposals but “had nothing to do with the actual selection.”

The corps also said it would have been unfair to disqualify Halliburton as the result of a preliminary audit, adding, “Fairness requires that we recognize that allegations or ‘clouds of suspicion’ are not necessarily facts, and that we act accordingly.”