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For U.S. soldiers in Iraq, there are few things more satisfying than a hot meal.
But a Utah company that provides food for the troops - including the turkey President Bush ate on his Thanksgiving trip to Baghdad - says it might have to switch to cold sandwiches because a Halliburton subsidiary owes it $87-million.
Phil Morrell, head of Event Source, says his company has continued to serve more than 100,000 meals a day even though Kellogg, Brown and Root hasn't paid it since November.
As money gets tighter, substituting sandwiches for hot meals is something "we're looking at doing," Morrell said Tuesday from Salt Lake City. "But I don't want to do that - these are our troops over there and this is something that should be resolved on a much higher level than the troops having to pay the price."
Halliburton doesn't deny it owes the $87-million. However, it says it is reviewing invoices submitted by Event Source as part of a "detailed audit" of all food subcontractors in Iraq.
"As soon as an invoice is validated it is paid, but this process is time-consuming due to the volume of invoices associated with over 60 dining facilities in the area of operations," Halliburton said in a statement.
"We will continue to support the soldiers even though the price for this mission is the cost of having to defend ourselves at home."
The giant Houston-based company, headed by Dick Cheney before he became vice president, has been accused of overcharging the U.S. government for feeding the troops and providing fuel to Iraq. Halliburton agreed to withhold billing for $140-million in food services while the Pentagon investigates, but warned Monday it faces financial problems as a result.
Among its many subcontractors in Iraq is Event Source, which built housing for the military during the 2002 Winter Olympics in Salt Lake City. Last June, the company won a contract from Halliburton subsidiary KBR to construct seven dining halls, mostly in Baghdad and Mosul, and provide meals for about 10 percent of the troops in Iraq.
Morrell wouldn't reveal the amount of the contract, but said KBR told him to add an extra 10 percent, ostensibly to ensure there was plenty of food.
"That would allow us to cook so we make sure everybody has the same selection - the first gets the same as the last and nobody winds up with less of a selection. We said we'd bill 10 percent to cover waste, and they accepted that. But we never billed that way - we always billed on actual head counts with a percentage tacked on for the building of the buildings."
Morrell said KBR agreed to pay Event Source at the first of each month, but made only partial payment in November and none since then. He was reluctant to criticize the company - "I'm just trying to get paid - I don't want to be throwing stones" - because he is aware of the challenges posed by Iraq.
"I worked there, I know it's a tough working environment, so I have to respect what they've done. But with that being said, they are very disorganized. They really didn't have a good system for billing methodology, and we're one of the victims of that situation."
For the past few months, he added, KBR's offices in Kuwait have been "so buried with auditors, it's unreal."
Event Source has about 400 employees, most of them in Iraq, but has laid off 60 or 70 because because it has not been paid. As result of the flap, KBR is trying to terminate his contract, Morrell said; KBR had no comment.
All of the food supplied by Event Source and other subcontractors is approved by U.S. Central Command in Tampa and comes from outside Iraq - Turkey, Germany and even the United States. "There's nothing from Iraq - my feeling is we don't know who's on our team there and who isn't," Morrell said. "The quickest way to take out the troops is to poison the food so we're pretty careful about who we deal with."
Morrell hopes the payment dispute is resolved soon, but has yet to find anyone in government who can help him.
So, he says, "I hope they find me."
- Susan Taylor Martin can be contacted at susan@sptimes.com