Army Changes Explanation on Halliburton

After stating that a multi-agency team of government experts evaluated Halliburton Co.'s (search) new Iraq contract, the Army Corps of Engineers (search) now says it alone picked the company despite allegations that it overcharged U.S. taxpayers.

"The one person that made the selection was the source selection authority" — an official in the Corps of Engineers — the Army unit told The Associated Press.

The AP had sought further information about assertions, on the Corps Internet site, that a contract evaluation team was assembled and included experts from five other federal entities.

While the team existed, the Corps now acknowledges what the public site never mentioned: The other agencies had no role in choosing Halliburton for oil restoration work worth up to $1.2 billion. Rather, the experts provided technical advice on the contract process.

The Corps said it considered the past performance of Vice President Dick Cheney's (search) former company, but shrouded its decision-making in secrecy.

"We cannot discuss or release any of the conclusions, as that is part of the evaluation process not releasable" under federal contracting rules, the Corps said on its site.

The site also advised readers not to bother filing Freedom of Information requests to get the information, saying it won't be publicly released under the law used to obtain government documents.

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

The Jan. 17 Halliburton award, to restore the oil industry in southern Iraq, was controversial from the start. A Pentagon draft audit report the previous month said the company may have overcharged taxpayers up to $61 million in its importation of oil to Iraq.

The Corps also said it wouldn't discuss the draft audit because the final version could change significantly.

Cheney's office says he severed relations with Halliburton when he ran for vice president in 2000. Halliburton said its KBR subsidiary 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.

Separately, U.S., French and Nigerian officials are investigating whether KBR was involved in the payment of $180 million in bribes to win a contract in the 1990s for a natural gas project in Nigeria. Cheney headed Halliburton at the time. The company said it had no knowledge of wrongdoing in the joint venture.

The new Iraq contract was evaluated by five agencies, the Corps said, including the Defense Contract Audit Agency, the Pentagon entity that reported the preliminary findings of overcharges.

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

The agency said its help to the Corps "was advisory in nature," focusing on gathering cost information and reviewing the evaluation system.

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."

He said the Corps asked an Air Force civilian in the command, who was acting as an individual, to help review the contracting procedures.

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

Don Jarosz, a spokesman for the Army's Tank-Automotive and Armaments Command, said his agency would not comment on its role because the evaluation team's task was "very sensitive."

The Defense Contract Management agency would not comment on its role.

The Corps told the AP in a written statement, "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: "Cost data and small-business plans were analyzed by experts in their fields. They were from both the COE (Corps of Engineers) and outside agencies, who analyzed the proposals for realism. They had nothing to do with the actual selection."

The Corps also told The AP 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."

Disputed amounts, if proved, could be recovered later, the Corps said.