NEW YORK (CNN/Money) - The Pentagon plans to withhold about $300 million in money owed to Halliburton under its contract to provide meals to U.S. troops in Iraq and Kuwait, the Pentagon said Wednesday.

The money represents 15 percent of the approximately $2 billion that the Kellogg Brown and Root unit of Halliburton, the oilfield services company once headed by Vice President Dick Cheney, is charging the government.

It will be held until Pentagon auditors finish a review of KBR's pricing for meals. The auditors and Halliburton have been at loggerheads for months over pricing for meals and whether billing should be based on estimates or the actual number of soldiers at the dining table on any given day.

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Halliburton agreed earlier this year to withhold $176.5 million in billing for food while KBR prepared a response to issues reported by the Defense Contract Audit Agency (DCAA).

"This shows that the system is working,'' said Pentagon comptroller Dov Zakheim.

Military auditors are looking into whether KBR overcharged for some of its services in Iraq and Kuwait, where its contracts cover tasks from serving hot meals and doing laundry to delivering mail and building bases for U.S. troops.

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A Pentagon spokeswoman said the contracting officer involved with KBR had asked the company to present a rebuttal to the DCAA's recommendation, adding that the officer said the 15 percent would be withheld at the end of this month.

Last week, military auditors said Halliburton had shown "systemic deficiencies" in its cost estimates for billions of dollars of work in Iraq. Halliburton and its unit KBR are the U.S. military's biggest contractor there, holding contracts that could eventually total nearly $18 billion, including one to help rebuild Iraq's oil industry.

Auditors are also examining whether KBR overcharged for fuel brought into Iraq via a subcontractor.

Criminal investigators at the Pentagon are looking into this issue. The company did not immediately reply to e-mailed questions over the Pentagon's decision. Halliburton has defended its work in Iraq and says it is doing the best job possible under difficult circumstances.  

-- from staff and wire reports