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Army will pay all of halliburton bills Original Source Link: (May no longer be active)
http://quote.bloomberg.com/apps/news?pid=10000087&sid=a4DArlOC9VVs&refer=top_world_newshttp://quote.bloomberg.com/apps/news?pid=10000087&sid=a4DArlOC9VVs&refer=top_world_news
Halliburton Says Army Won't Withhold From Past Bills (Update2)
March 17 (Bloomberg) -- Halliburton Co., the world's largest oilfield-services provider, said the U.S. Army opted to pay all of past invoices for logistics work in Iraq rather than withhold part of the money during audits of the bills.
Halliburton's Kellogg Brown & Root unit believes such withholding shouldn't be required under its $9.4 billion Army logistics contract and is ``working through'' the issue with the government, the Houston-based company said in a statement.
Starting April 1, the Army will impose the 15 percent withholding on new Halliburton billings, as normally required during its auditing process, said Lieutenant Colonel Rose-Ann Lynch, a Pentagon spokeswoman. The move might mean holding back up to $300 million over the next six months, she said.
Halliburton has spent more than $1.2 billion in Iraq for which it hasn't yet been reimbursed, Kellogg Brown & Root Chief Executive Randy Harl said in the statement. Any amount that the government withholds from Halliburton will be withheld from subcontractors, the company said.
``KBR pays for the equipment, supplies and manpower and is reimbursed by the government much later after a detailed review and clarification of any bill submitted,'' Harl said.
Pentagon officials last week told members of a U.S. House committee that Halliburton was submitting 100 percent of its expenses under the logistics contract for reimbursement rather than the 85 percent that normally is paid initially for orders without signed contracts.
Withholding Sought
The Defense Contract Audit Agency last month said the Army should withhold 15 percent of past and future billings until audits of the orders are completed. The agency and Halliburton previously agreed to hold back reimbursement for $176.5 million in questionable foodservice billings.
Democratic members of Congress and presidential candidates have accused Halliburton, formerly headed by U.S. Vice President Dick Cheney, of overcharging for work in Iraq and using political influence to get the contracts.
The company held a conference call Friday to reassure investors that it has adequate cash to continue to operate in Iraq and make a payment of $2.5 billion this year to settle all current and future asbestos claims.
Halliburton, which had a cash balance of $2 billion at the beginning of March, said in a regulatory filing this week that having to refund money to the government or withhold billing for substantial amounts of additional work might ``materially and adversely affect our liquidity.''
Shares of Halliburton rose $1.34, or 4.6 percent, to $30.20 in New York Stock Exchange composite trading. The gain was Halliburton's biggest this year.
Contracts in Iraq last year helped Halliburton surpass Schlumberger Ltd., based in New York and Paris, as the world's biggest oilfield-services company.
To contact the reporter on this story:
Tony Capaccio in Washington at acapaccio@bloomberg.net; Jeffrey Tomich in Houston at jtomich@bloomberg.net.
To contact the editor of this story:
Robert Dieterich at rdieterich@bloomberg.net.
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