Halliburton sought bids from four suppliers in Kuwait, but only one met with the Corps of Engineers' specifications.Pentagon officials said last week Kuwait's state-owned oil company authorized only one firm to bid on the contract to supply the fuel.
Stuck with only one supplier and coping with a dangerous route from Kuwait, Halliburton, through Sept. 30, had been charging about $2.27 a gallon to import gasoline from Kuwait, Pentagon officials said.
Company officials say they proposed using a second supplier from Turkey. And trucking in fuel from the north proved far cheaper, costing only about $1.18 a gallon. Turkey quickly became the chief source for fuel into Iraq. Halliburton has brought in about 150 million gallons of fuel from the north, compared with 56.6 million from Kuwait.
But when Pentagon auditors saw the cheaper rates from Turkey, they -- in essence -- concluded that Halliburton hadn't shopped around enough in the first place to find a bargain.
When calculating the possible $61 million overcharge, they compared the difference in those two prices and then multiplied by the 56.6 million gallons brought in from Kuwait.
Halliburton officials say security accounts for much of the high cost of trucking fuel in from Kuwait.