The Pentagon (search) plans to withhold about $300 million in payments to Halliburton Co. (search) because of possible overcharging for meals served to troops in Iraq and Kuwait, defense officials said Wednesday.
Starting next month, the Defense Department will begin withholding 15 percent of the money paid to Vice President Dick Cheney's former company on a multibillion-dollar contract to provide services such as food, housing, laundry and mail to American forces in Iraq.
Halliburton spokeswoman Wendy Hall said the company disagreed with the decision and hoped to persuade the Pentagon to drop its plans. If the Defense Department does withhold the money, Halliburton will in turn withhold 15 percent of its payments to its subcontractors, Hall said.
Houston-based Halliburton and its military services subsidiary, KBR (search), face a criminal investigation into alleged misdeeds in government work in Iraq and Kuwait. In this case, Pentagon auditors accuse KBR of overestimating the number of troops to be served meals, thus reaping millions in overcharges.