The US military has signed on Halliburton to do nearly $5 billion in new work in Iraq under a giant logistics contract that has so far earned the Texas-based firm $9.1 billion, the US army said today.
A spokeswoman for US Army Field Support Command in Rock Island, Illinois, said the military signed the work order with Halliburton unit Kellogg Brown and Root in May.
The new deal, worth $4.97 billion over the next year, was not made public when it was signed because the Army did not consider such an announcement necessary, she said.
"We did not announce this task order as this is really not something we ever really thought about doing," the spokeswoman said. "We have agreed that is what things will cost if we enact all of the things in the scope of work," she said of the new work.
Halliburton, which was run by Vice President Dick Cheney from 1995-2000, has been under scrutiny for its contracts in Iraq and several US government agencies are looking into whether it overcharged for some work.
In March, a former KBR employee and a Kuwaiti citizen were indicted for defrauding the US government of more than $3.5 million by inflating the cost of fuel tankers.
The new work order, called Task Order 89, is valid until April 30, 2006, and went ahead despite critical military audits released last week by Democratic opponents of KBR's Iraq work.
A top US Army procurement official said last week Halliburton's deals in Iraq were the worst example of contract abuse she had ever seen, a claim KBR strongly rejected as "political rhetoric."
The company did not immediately respond today to a request for comment on the new business. KBR was awarded the logistical contract with the military in December 2001, covering tasks from feeding US troops to delivering mail, doing laundry and building barracks.