By Jim Wolf
WASHINGTON (Reuters) - Halliburton Co. said on Monday it would defer billing for an additional $140 million in meals for U.S. forces in Iraq and Kuwait until a discrepancy is reconciled between the number of meals ordered and those actually served.
The Houston, Texas-based oil services company said it was holding off billing until an agreement was reached on subcontractor services for meal planning, food purchase and meal preparation for troops.
Halliburton 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 helping rebuild the oil industry.
Its contracts have drawn intense scrutiny from Democrats because of its ties with Vice President Dick Cheney, who ran the company from 1995 until 2000.
Last week, Halliburton said in a Securities and Exchange Commission filing it had agreed to delay billing for $34.5 million while Defense Department auditors weigh whether its subcontractors overcharged for meals in Iraq and Kuwait.
The additional $140 million in suspended billing was for food services already provided to U.S. forces in Iraq and Kuwait, the company said.
"It is important to understand that this is not any sort of 'admission'," said Randy Harl, president and chief executive of Halliburton subsidiary Kellogg, Brown and Root. "As a responsible government contractor it is the right thing to do."
The company said it would continue working with the military to reach agreement on bridging the gap between meals ordered by the Defense Department and those actually served.
Wendy Hall, a Halliburton spokeswoman, said the hold on related billing would continue indefinitely, "until an agreement is reached."
The company has also been in the spotlight over whether it overcharged as much as $61 million for fuel delivered to Iraq.
Kuwait's parliament formed a committee on Monday with broad powers to probe the deal to supply Halliburton with fuel for the U.S. army in Iraq.
Halliburton welcomed "another independent examination of this issue because there have been a lot of erroneous reports in the U.S. and international media," Hall said.
"The facts show that KBR delivered fuel to Iraq at the best value, the best price, and the best terms and in ways completely consistent with government procurement policies."
In a separate dispute, Halliburton refunded the U.S. government $6.3 million after acknowledging that one or two former employees apparently took kickbacks from a Kuwaiti subcontractor.
Last week, the Pentagon said Halliburton had become its seventh biggest contractor in fiscal 2003, up from the 37th place the year before, propelled by reconstruction work in Iraq and Bosnia.