Pentagon Audit Takes Aim at Halliburton
Halliburton (HAL) has taken another hit over its work in war-torn Iraq.
The company's KBR unit now stands accused of improperly accounting for some 43% of the $4.18 billion it has so far billed the government for projects in the Middle East, The Wall Street Journal reported on Wednesday. The company has until Sunday -- a deadline already twice extended -- to justify its billings or risk losing 15% of its payments, the Journal added.
Government officials outlined their complaints in a new 60-page audit described by the Journal as "the most serious critique to date" of KBR's billing for services provided to U.S. troops in Iraq.
"The audit found that KBR's 'internal control policies' are 'inadequate for providing verifiable, supportable and documented cost estimates that are acceptable for negotiating a fair and reasonable price,'" the Journal reported, citing the nonpublic report. "Pentagon officials said that no defense contractor has had its estimating system ruled 'inadequate' in years."Halliburton spokeswoman Wendy Hall said the company disagrees with both the report and the conclusions that The Wall Street Journal reached about it. She insisted that Halliburton employs proper billing procedures and maintained that the audit actually has nothing to do with the amounts charged by Halliburton or, in turn, the sums that it can expect to recover. Instead, she described the audit as a normal part of negotiations with the government. "Normally, these kinds of audit reports are part of a lengthy but routine process that is amicably resolved," she said. "Only in an election year -- when Halliburton is being covered in a political context as opposed to business -- does a
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV