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Halliburton seeks more Iraq work
Oilfield services company, already in Iraq, seeks contracts for final phase of oilfield repairs.
August 18, 2003: 4:24 PM EDT
By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Halliburton Inc. said Monday it had placed a bid for a U.S. Army Corps of Engineers contract to finish repairing Iraqi oil fields -- though it's likely the company has already done the most lucrative part of the work.

Friday was the last day to submit bids for two Army contracts, each of which will have a minimum value of $500,000 and a maximum value of $500 million.

Other firms who submitted bids included Alisa Viejo, Calif.-based Fluor Corp. (FLR: up $1.07 to $36.95, Research, Estimates) and Parsons Corp., of Pasedena, Calif.

The winning bidder will be announced in mid- to late October, raising an issue of timing for many would-be contractors, since the first two phases of the project must be completed by Dec. 31.

According to the Army, the third and final phase of the project, which must be completed by March 3, 2004, is worth only $176 million -- compared with the $967 million value of the rest of the contract.

The structure of the contract has led to some anonymous criticism, in recent reports by the New York Times and the Wall Street Journal, that the process has been skewed in favor of Houston-based Halliburton (HAL: up $0.03 to $23.44, Research, Estimates), which was led by Vice President Dick Cheney until his resignation before the 2000 election.

The Army has denied showing any favoritism to Halliburton, and pointed out that the recent sabotage of a critical Iraqi oil pipeline only highlights the chance that there could be more work in Iraq than is currently expected.

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"Continued looting and sabotage will exacerbate the situation," Army spokesman Bob Faletti said. "That's why the contract is of indefinite delivery and quantity."

Halliburton's Kellogg Brown & Root unit has been working in Iraq since March, helping repair damage to Iraq's oil infrastructure, in a contract it won secretly, without competitive bidding. The political furor over that contract led the Army to agree to issue replacement contracts.

Cheney divested himself of most of his interest in Halliburton in 2000. He has stock options in a trust, but has promised to donate any profits from those options to charity. He is still paid a set amount by Halliburton, but that money is guaranteed, even if Halliburton goes bankrupt.  Top of page

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