Corp-Ethics.com - Report: US Army to end Halliburton deal

Company	Halliburton [Company Info]
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Date	Issue	Title
12th Jul 2006	Other Issue	US Army to end Halliburton deal

Report

Halliburton's lucrative logistics contract with the US Army is to come to an end, the military has said.

The army said it would seek new bidders for the multi-billion dollar deal to provide support services to US troops around the globe.

Halliburton, once led by US vice president Dick Cheney, has recently come under fire for landing expensive, non-competitive government contracts.

Shares in the group fell more than 1% following the announcement.

Halliburton's KBR unit will be able to submit a bid when the contract is put out to tender later this year, army spokesman Dave Foster said.

However, he could not say how the new contracts would be set out.

Reports have suggested the army may decide to replace its biggest contractor with three firms when the deal ends in September, with a fourth firm signed up to monitor the trio.

According to a report in the Washington Post, the Pentagon has decided it no longer wants to "place all our eggs in one basket".

By splitting the contracts and offering them to three other companies, the army believes it will get better value for money, as well improved accountability and transparency.

Following news that its contract is about to come to an end, KBR said its achievements in the Middle East had been "nothing short of amazing", adding it had prepared almost 375 million meals for troops involved in Iraq, Afghanistan and Kuwait.

The Pentagon's decision was welcomed by Senator Byron Dorgan of the Democratic Party, who said the move had been a long time coming.

"I believe literally hundreds of millions and probably billions of dollars have been wasted," he told the Senate.

"Finally the taxpayers get a break."

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