KBR "Restore Iraqi Oil" fuel imports from Kuwait: DCAA-questioned costs and subcontractor kickbacks (from 2003 to 2005)
Under the no-bid Restore Iraqi Oil (RIO) contract, Halliburton subsidiary KBR imported fuel into Iraq through Kuwaiti subcontractor Altanmia. A preliminary Defense Contract Audit Agency (DCAA) audit in late 2003 found KBR overcharged at least $61m; by June 2005 DCAA told Congress it had questioned $205.2m on seven RIO task orders, $171m of it fuel costs ($139m linked to the Kuwaiti supplier). Separately, Halliburton agreed in January 2004 to repay $6.3m for possible overcharges by a subcontractor accused of paying kickbacks to KBR employees. DCAA stressed it questioned price reasonableness, not whether costs were incurred.
- Period
- From May 2003 to 2005
- Sector
- Reconstruction and donor fundsUS contractor, fuel imports into Iraq
- Kind of case
- Audit finding
- Jurisdiction
- United States
How the money moved, according to the sources
Sole-source contracting and inflated fuel or transport prices charged by a subcontractor, passed through a cost-plus contract; kickbacks from subcontractors to contractor employees.
What happened
Questioned costs were negotiated by the contracting officer; the final amounts disallowed are not on record. No criminal case against KBR is on record.
Open questions
- Final settlement of questioned RIO fuel costs (reports in 2006 suggested most were paid).
- Were RIO fuel imports paid from DFI (Iraqi) funds, and did the IAMB seek reimbursement?
People and companies
| Name | Role in the case | Legal status | Detail | As of |
|---|---|---|---|---|
| KBR (Halliburton subsidiary) KBR (تابعة لهاليبرتون) | RIO contractor | Accused by an official body | DCAA questioned $205.2m (price reasonableness); repaid $6.3m in January 2004 over subcontractor kickbacks (media). No criminal finding against the company is on record. | 25 September 2026 |
| Altanmia Commercial Marketing Co. شركة التنمية للتسويق التجاري (Altanmia) | Kuwaiti fuel subcontractor | Accused by an official body | Its prices were questioned by DCAA and Rep. Henry Waxman (January 2004 letter, media report). | 25 September 2026 |
| William Reed ويليام ريد | Director, DCAA | Not charged as of the date of writing | Testified 21 June 2005 on questioned costs. | 25 September 2026 |
Sources
- US House Committee on Government Reform (GPO), testimony of DCAA Director William Reed21 June 2005Parliamentary documentTier A
The Development Fund for Iraq hearing (Serial No. 109-72)
OriginalSHA-256 8d1e27961a33DCAA questioned $139 million due to KBR's failure to support the reasonableness of prices paid for fuel and transportation from a Kuwaiti supplier.
- Government ExecutiveJanuary 2004Press reportTier D
Pentagon auditors request Halliburton probe
Originalat least $61 million for importing fuel into Iraq from Kuwait
- Southeast Missourian (AP)23 January 2004Press reportTier D
Halliburton repays millions to military
Originalaccused of giving kickbacks