WASHINGTON – Questioning whether Vice President Dick Cheney's former company has received favored treatment from the Pentagon, senior House Democrats asked Congress' investigative agency Tuesday to delve into contracts awarded Halliburton Co. over the past two years.
Halliburton's KBR subsidiary has a record of gouging the government in contracts awarded without competition, Reps. Henry Waxman of California and John Dingell of Michigan contended in a letter to the General Accounting Office.
Halliburton spokeswoman Wendy Hall said the lawmakers have ignored the exemplary record of the Houston-based firm that employed Cheney as chief executive officer from 1995 to 2000 and still pays him deferred compensation for his services during that period.
"With more than 60 years of government experience, KBR has a proven track record on military contracts such as production of Navy warships for World War II, construction of the Phan Rang air base in Vietnam in 1965 and designation as the premier logistics service provider for U.S. troops in the Balkans," she said.
The lawmakers said federal procurement data showed that the government awarded KBR work worth more than $624 million from October 2000 through March 2002. Waxman is the senior minority member of the House Government Reform Committee, and Dingell holds the same position on the House Energy and Commerce Committee.
Hall said Halliburton does not comment on the amounts of its contracts but contended KBR had competed for its government work during the period cited, which disputes the letter's contention.
The lawmakers cited these previous problems with KBR, formerly Kellogg, Brown & Root:
--A GAO finding in 1997 that the company billed the Army for questionable expenses for work in the Balkans, including charges of $85.98 per sheet of plywood that cost $14.06.
--A year 2000 follow-up report on the Balkans work that found inflated costs, including charges for cleaning some offices up to four times a day.
--$2 million in fines paid in February, 2002, to resolve fraud claims involving work at Fort Ord, Calif. The Defense Department inspector general and a federal grand jury had investigated allegations by a former employee that KBR defrauded the government of millions of dollars by inflating prices for repairs and maintenance.
The Securities and Exchange Commission already is investigating Halliburton's accounting practices, looking into an accounting change made in 1998, during Cheney's tenure as CEO.
Halliburton announced last week it had decided not to enter a bidding process open only to a few experienced and well-connected firms for major postwar reconstruction projects in Iraq. Instead, the company said it would focus on becoming a secondary contractor.
KBR already has work in Iraq under a previous Defense Department contract to extinguish oil well fires. The firm hired subcontractors Boots & Coots International Well Control Inc. and Wild Well Control Inc., both also from Houston, to handle the firefighting work.
The two lawmakers complained in their letter that the contract was awarded without competition or notice to Congress, and it has no set limits in time or dollars.
Separately, the lawmakers asked the GAO to investigate a limited bidding process for hundreds of millions of dollars in Iraq reconstruction projects. The State Department's Agency For International Development only invited a small number of experienced firms to submit proposals, arguing speed was essential to get the work started.