The US Army is laying the groundwork to let Halliburton Co keep several billion dollars paid for work in Iraq that Pentagon auditors say is questionable or unsupported by proper documentation, the Wall Street Journal reported on Friday.
According to Pentagon documents reviewed by the Journal, the Army has acknowledged that the Houston-based company might never be able to account properly for some of its work, which has been probed amid accusations that Halliburton's Kellogg Brown & Root unit over-billed the government for some operations in Iraq.
The company has hired a consulting firm to estimate what Halliburton's services should cost, the report said.
The newspaper, citing the documents and internal memorandums, said that officials are considering using the estimate to serve as the basis for "an equitable settlement", under which the Pentagon could drop many of the claims its auditors have made against the company.
But the Journal added that some disgruntled Pentagon officials see the effort to broker an outside settlement with the company as unusual because the contract is so large.
According to the report, Kellogg Brown & Root so far has billed about $12 billion in Iraq, and about $3 billion of that remains disputed by government officials.
The Journal also cited Pentagon records showing that $650 million in Halliburton billings are deemed questionable. An additional $2 billion is considered to have insufficient paperwork to justify the billing, the report said.
A representative for Halliburton did not immediately return a call seeking comment early Friday.
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