WASHINGTON (Reuters) - The U.S. Army should withhold some future payments to Halliburton (NYSE:HAL - news) for work in Iraq (news - web sites) due to billing disputes, a government auditor said on Wednesday, a move that could cost the contractor tens of millions of dollars.
Stuart Bowen, special inspector general for Iraq reconstruction, said in a memorandum to Army auditors and commanders he believed U.S. contract laws requiring a 15 percent withholding if certain conditions were not met should be imposed on Halliburton unit Kellogg Brown and Root.
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Bowen said based on their "limited audit work," he supported military auditors' proposals last August for the Army to implement the withholding. Documents then indicated the company had not provided enough details to support at least $1.82 billion out of $4.3 billion of logistical work.
"We agree with U.S. Army Materiel Command and DCAA (Defense Contract Audit Agency) positions (on the withholding issue)," said Bowen in the memorandum.
Halliburton spokeswoman Cathy Gist said the company was working with its client to resolve the billing dispute and it had not received any new information about a withholding.
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