http://story.news.yahoo.com/news?tmpl=story&cid=578&ncid=578&e=4&u=/nm/20040907/ts_nm/arms_halliburton_dcReport: Army to Rebid Halliburton Contract
Tue Sep 7, 6:44 AM ET
NEW YORK (Reuters) - The U.S. Army plans within months to break up Halliburton Co.'s contract to provide support services for U.S. troops in Iraq-- valued at up to $13 billion -- and open the work to competitive bids, The Wall Street Journal said on Tuesday, citing an internal Army memorandum.<snip>
In the Aug. 25 memo, Tina Ballard, the Army's chief of procurement policy, ordered top officials in the U.S. Army Field Support Command "to immediately begin the transition to competitively awarded sustainment contracts for support of U.S. military forces in Iraq," the newspaper said.
The newspaper said the Army is frustrated with efforts to estimate the final cost of the work and may stop negotiating contract costs with KBR, and instead estimate costs on its own. If it takes this step, Halliburton's profit might be hurt, the newspaper said, as KBR may find it harder to stay within estimated costs, making it more difficult to qualify for its 2 percent bonus.
"The award fee is where you make your money," Hall told the newspaper.
But she said KBR's contract has provisions allowing the unit to dispute final Army estimates. She said Halliburton viewed the Army's decision "as positive and will help to resolve outstanding issues." <snip>