Oil giant Halliburton is falling short in its billion-dollar commitments to supply U.S.-led forces in Iraq and rebuild the country's oil industry, a senior Pentagon official said Thursday.
"There is no doubt that more needs to be done. We have to make sure that we can provide the services as quickly as they are needed," Dov Zakheim, under secretary of defense and the Defencse Departmant's comptroller -- chief financial officer -- said.
Halliburton, mainly through its Kellogg, Brown and Root (KBR) subsidiary, is the biggest contractor for the U.S. military in Iraq with more than $8 billion in deals covering everything from doing laundry, building bases and providing meals to repairing oil infrastructure.
A U.S. draft audit has found evidence KBR might have overcharged by $61 million for bringing oil and gas products into Iraq via the Kuwaiti subcontractor, Altanmia Commercial Marketing Co. Kuwait's parliament formed a committee on Monday with broad powers to probe the deal.
The Defense Department is looking into the fuel issue and allegations that one or two KBR employees paid bribes to the subcontractor. In addition, military auditors are examining KBR's pricing for meals it served to troops in Iraq and Kuwait.
Last week, Halliburton said in a Securities and Exchange Commission filing it had agreed to delay billing for $34.5 million until the auditors had completed their work.
"We are looking at every aspect of Halliburton and every other contract in Iraq. KBR has total contracts that can come up to $15 billion. It is largest single combination of contracts. Naturally we have to spend a lot of time on it," he said.
"I would not give them a perfect score but I would not give them a terrible score either. It is a very tough job, and managing this type of operation in this difficult security environment is not easy."
Zakheim made his comments after touring southern Iraq, home to the bulk of the non-U.S. forces in the country, where he visited bases for U.S., Japanese and Spanish troops, to assess the performance of all suppliers to troops in the region.
Commanders told him that they lacked sanitary services and blast-proof barriers that KBR should have provided.
"We have heard some concern on the part of several of the units. The troops need to get what they need whether they are our troops or whether they are our allies and friends. We do not want anybody endangered unnecessarily," Zakheim said.
He said he was keen for Halliburton to employ as many Iraqi individuals and companies as possible.
"We want to get Iraqis jobs. We want to get Iraq back on its feet," he said. It is very important to provide subcontracts to Iraqis so they can build up their businesses again."
