Understandably, Halliburton is not happy with the Army’s decision.
In a statement Halliburton spokeswoman Wendy Hall said, “The company has learned that the Army Materiel Command has refused to grant a third extension before implementing the clause, which allows the government to withhold 15% percent of payments until contractors prove their costs.”
“Halliburton is a political target, denies any wrongdoing and disputes whether the withhold is legally justified. The Army Materiel Command feels this is a standard part of the contract and this is not being imposed as a penalty or lack of progress on substantiating costs. The company expects to ask for a judicial determination on whether the withholds apply to the contracts but it hasn't been determined where or with whom the claim will be filed.
“Halliburton is confident that the government action is not justified and expects that its legal arguments will be upheld in litigation. KBR, our engineering and construction arm that performs much of our government contract work, will offset the loss by withholding 15% from payments to subcontractors,” added Hall.
Halliburton was awarded more than US$6 billion in contracts in Iraq. It has come under the fire recently for alleged over-charging of its services and being unable to “adequately account” for US$1.8 billion in its billing.
The Houston firm is also in trouble with the Army Corp of Engineers, which is withholding 15% of payments for contracts to fight oil fires and rebuild Iraq’s oil infrastructure.
