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Last Updated: Tuesday, 17 August, 2004, 23:55 GMT 00:55 UK
US suspends Halliburton decision
By Nick Childs
BBC correspondent at the Pentagon

US troops in Iraq
Halliburton is the US Army's largest contractor in Iraq
The US army has said it has suspended for now a decision to withhold some payments to Halliburton, its biggest contractor in Iraq.

The army had earlier said it would be withholding 15% of payments on future bills to Halliburton, once run by US Vice-President Dick Cheney.

One of its subsidiaries has featured in auditing disputes with the Pentagon.

It allegedly overcharged on contracts to supply accommodation, meals and fuel to troops in Iraq and Kuwait.

Halliburton is by far the Pentagon's biggest civilian contractor in Iraq, but also by far its most controversial.

The US army's Materiel Command had said it was going to withhold 15% of payments on future company invoices after Halliburton's Kellogg, Brown & Root unit became locked in auditing disputes with the US government.

Such a decision, it was estimated, could have cost the company $60m a month - although Halliburton had said it would simply pass on the cutback to its suppliers.

But within hours, the army said it was suspending the move - at least for now.

No official reason has been given for the change of heart, but it is thought US defence officials decided they wanted to have another look at the potential implications of the move.

The BBC's Nick Childs
"No official reason has been given for the change of heart"

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