The presence of KBR-contracted civilian truckers in Iraq may be up in the air, following a change in the U.S. Army’s plan for logistical
The Army announced Wednesday, July 12, that it is discontinuing
a multi-billion-dollar logistics deal with Halliburton. The contract gave the
company near-exclusive rights to the hauling and transportation efforts in the
war-torn country, The Associated Press reported.
Instead of giving all the work – which has also included
troop support and construction projects – to one company, the contracts will
now be divided amongst three companies, with a fourth company monitoring the
other three, The AP reported. Those
companies have not yet been decided, and are expected to be announced some time
in the fall.
The decision calls into question the future role in Iraq of
Kellogg, Brown & Root, a subsidiary of Halliburton, which currently has
more than 50,000 employees and subcontractors in Iraq, Kuwait, Afghanistan,
Uzbekistan and Djibouti, Melissa Norcross, a spokeswoman for Halliburton, told Land
Halliburton’s work with the Army has not been without
controversy. Several government audits found examples of gross overcharging for
supplies, the Washington Post reported.
However, Norcross said Halliburton has received numerous
several positive evaluations of its work in Iraq, and that the contract
decision was not out of the ordinary.
“It is neither unusual nor unexpected that the … contract
may be replaced with another competitively bid approach,” Norcross said in a
prepared statement. “Since the competitive award of the … contract in December
2001, we have been open and forthcoming that this work may be modified or
replaced at any time during the term of the contract.”
Norcross said Halliburton would put in an offer in the
upcoming bidding process if it proves to be a “good business opportunity.”
KBR, which has almost exclusively handled the
civilian-contracted trucking and logistics needs of the military during the Iraq war, took in about $7 billion in 2005 under the contract, according to the Post.
News of the contract break put a slight dent in
Halliburton’s stock prices. On Wednesday, the company closed at 74.87 a share
on the New York Stock Exchange, down a little less than a percentage point from
the day before.