Halliburton 'Over Billing' Controversy

The fixed-price contract did not guarantee any profit margin to the company in the event of cost overruns or unforeseen cost increases. All that Halliburton could do was to try and persuade its clients to pay for at least a part of the increased cost. The amount involved in those persuasions was referred to as 'disputed claims.'

Prior to 1998, Halliburton did not include disputed claims as revenues and such claims were recognized as revenues only after settling with the clients as it depended entirely on the negotiation ability of the company whether it could get the customers to pay for those extra costs incurred or not. Since the fourth quarter of 1998, the company included a portion of disputed claims as revenues...

The DoD asked the company to get military bases in Kuwaiti desert ready for possible invasion. About 1800 employees of Halliburton began working in Kuwait and within few weeks they erected camps that were capable of supporting 80,000 soldiers. This contract was secretly awarded to Halliburton and was not made public till the war started. In March 2003, the US government also awarded another contract to Halliburton to extinguish oil well fires. This contract was to be carried out by Halliburton's subsidiary KBR. The company was supposed to extinguish oil well fires, capping oil well blowouts, as well as respond to any oil spills. When this information was made public, the government was criticized vehemently by many analysts and observers...