Halliburton Contracts Face New Scrutiny
The cost estimate system is used to come up with a price that the government agrees to pay Halliburton as it performs work in Iraq. Later, auditors try to
reconcile the estimates with actual costs and determine whether the government
has paid too much or too little.
It is important because the government does not want to pay too much to a contractor and have to seek reimbursement later. The audit found that Halliburton's estimating systems suffered from "a lack of current, accurate and complete cost and pricing data."….
Company officials said they were working with the government to address issues raised in the report, including the inadequate accounting for work done under the
so-called Logcap contract, which supplies logistics aid for U.S. troops.
The $1.8 billion amounts to about 42% of the $4.3 billion the company has billed to the U.S. government under the contract. In the past, the company has acknowledged that its work in a war zone has made paperwork difficult.