Halliburton unit hit for Iraq costs
Report says KBR, others bill government administrative costs two times the amount of the actual projects.

NEW YORK (CNN) -- Five companies, including a subsidiary of military contract giant Halliburton, billed the U.S. government a total of $62.1 million for administrative operations, which is more than twice the amount those companies spent directly on the projects in Iraq that they had been contracted for, according to a report released Monday by the Office of the Special Inspector General for Iraq Reconstruction.

Direct project costs for the five companies totaled $26.7 million, less than half the amount related to administrative task orders (ATO).


The report - covering a nine-month period in 2004 - analyzed the ATOs that the companies filed, which were established to track the administrative and overhead costs of the 12 contracts for operations related to the Iraq war.

"Poor planning led to ATO costs that were greater than direct project costs during period of start-up," the report says.

Five companies filed ATO reports totaling $62.1 million between March and November 2004, before primary contract operations began in Iraq, according to the report. The remaining seven companies did not file for ATO costs separately, a problem the report comments on in its recommendations for revision of the billing system in place.

Halliburton's (Charts) Kellogg, Brown & Root billed the U.S. Army Corps of Engineers $52.7 million in ATOs, almost four times the $13.4 million it charged in direct project costs related to the reconstruction of Iraq's oil sector, according to the report.

The report says KBR spent a significant amount more on ATOs than other contractors.

KBR and Halliburton representatives did not return calls for comment.

ATO costs were broken down into four categories: mobilization and transportation, management and administration, security, and life support.

--From CNN's Katy Byron


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