Unpaid
Bills May Halt Food Service for Troops in Iraq
Cold Chow: Defense News, Federal
Times, Army Times and Gannett (March 22, 2004). Unpaid
KBR subcontractor threatens to stop serving troops. This is
a recurring theme to the multibillion-dollar LOGCap
contract.
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By DAVID PHINNEY
Halliburton celebrates serving hot meals to U.S. troops in
Iraq in its television commercials, but one subcontractor
responsible for preparing the food says soldiers there soon
may be eating cold sandwiches because Halliburton subsidiary
Kellogg, Brown and Root isn’t paying its bills.
A Utah-based caterer, Event Source, claims KBR has racked up
an unpaid $87 million tab for meals it has served to
soldiers in
Baghdad
and
Mosul
since November. The company plans to continue serving food
at dining facilities it helped build, but it needs either to
get paid or cut expenses, said Phil Morrell, who founded
Event Source to serve security troops during the 2002 Winter
Olympics in
Salt Lake City
.
“It’s not something I want to do, but I just want to get
paid,” Morrell said. “My company is getting ripped
apart.”
Other subcontractors in
Iraq
working for KBR share similar complaints, he said, although
he declined to name any.
“I’m just the squeaky wheel,” he said. “I don’t
know what else to do to get paid.”
Halliburton spokeswoman Wendy Hall confirmed that some
subcontractors remain unpaid for their invoices, but
declined to say how many or how much money is at issue.
“As soon as an invoice is validated, it is paid, but this
process is time-consuming due to the volume of invoices
associated with over 60 dining facilities in the area of
operations,” she said. “We understand the hardship this
places on our subcontractors and are doing everything we
can, given the circumstances, to speed the process along
while still continuing our due diligence.”
Hall said special circumstances in a war zone have placed an
added burden on doing business, and KBR had to ramp up from
serving 50,000 soldiers in June to more than 130,000 in
July.
The company holds a multibillion-dollar contract signed in
2000 with the Army Materiel Command for “just-in-time”
troop support, provisioning and installation construction
around the world.
KBR has said previous food billings were based on meals
ordered, not meals served, and it is withholding bills
totaling $141 million as negotiations continue with the
Pentagon over costs. KBR is conducting a detailed internal
audit of all dining-facility subcontracts in
Iraq
and
Kuwait
to ensure charges are consistent with the number of meals
served or prepared, said Halliburton’s Hall.
KBR has been under scrutiny from Pentagon auditors looking
into whether the company overcharged for fuel and food
services provided to troops in
Iraq
, as well as the possibility that two Halliburton executives
received kickbacks from a Kuwaiti subcontractor.
According to a report in the March 11 edition of The Wall
Street Journal, the Defense Department inspector general’s
office has asked the Justice Department to join the
investigation, indicating there may be grounds for possible
criminal charges.
The inquiry into possible price gouging for fuel stems from
KBR’s work to deliver fuel to
Iraq
from
Kuwait
and
Turkey
under a separate contract with the Army Corps of Engineers.
That contract expired. The Corps last week awarded a
fuel-supply contract to Refinery Associates of Texas Inc.
and six Turkey-based companies for an estimated $300 million
or more.
Besides the billing dispute, Event Source has suffered a far
more severe consequence of its work in
Iraq
: Five of its employees have died there since June, Morrell
said - one from friendly fire, one from insurgent activity
and three from natural causes, including heatstroke and
heart attack.
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