Washington – The Army is discontinuing a controversial multibillion-dollar deal with oil-services giant Halliburton Co. to provide logistical support to U.S. troops worldwide, a decision that could cut deeply into the firm’s dominance of government contracting in Iraq.
The choice comes after several years of attacks from critics who saw the contract as a symbol of politically connected corporations profiteering in the war.
Under the deal, Halliburton had exclusive rights to provide the military with a wide range of work that included keeping soldiers around the globe fed, sheltered and in communication with friends and family back home.
Government audits turned up more than $1 billion in questionable costs. Whistle- blowers said the company charged $45 per case of soda, double-billed on meals and allowed troops to bathe in contaminated water.
Halliburton officials have denied the allegations strenuously.
Army officials Tuesday defended the company’s performance but also acknowledged that reliance on a single contractor left the government vulnerable.
The heavy involvement of U.S. contractors in Iraq has been one of the defining features of the U.S. presence there, with private companies called on for duties including guarding supply convoys and analyzing intelligence.
No contractor has received more money as a result of the invasion of Iraq than Halliburton, whose former chief executive, Dick Cheney, is vice president.
The Pentagon’s new plan will divide the work among three companies, to be chosen this fall, with a fourth hired to help monitor the performance of the other three.
Halliburton will be eligible to bid on the work.
The decision on Halliburton comes as the U.S. contribution to Iraq’s reconstruction begins to wane, reducing opportunities for U.S. companies after nearly four years of massive payouts to the private sector.
