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Halliburton Iraq contract expands

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WASHINGTON (CNN) -- The Army Corps of Engineers says a contract awarded without competition to a subsidiary of Halliburton included not only putting out oil well fires in Iraq but also "operation of facilities and distribution of products."

Officials previously have said the multi-million dollar contract only dealt with putting out oil well fires and performing emergency repairs as needed.

The awarding of the contract in March prompted some lawmakers, including Rep. Henry Waxman, D-Calif., to question whether the administration's deep ties with Halliburton helped secure the contract -- charges the White House has adamantly denied. Vice President Dick Cheney formerly ran the company.

In a letter to Waxman dated May 2, Lt. Gen. Robert Flowers, the U.S. Army Chief of Engineers, gave further details about what the contract entails: that the company would put out oil well fires and assess the facilities; clean up oil spills or other environmental dangers at the sites; repair or reconstruct damaged infrastructure; operate facilities and distribute products.

Flowers did not elaborate on what he meant by "operation of facilities and distribution of products." The White House has long said the oil of Iraq belongs to the Iraqi people.

Waxman had written Flowers seeking answers as to why the contract has "no set time limit and no dollar limit and is apparently structured in such a way as to encourage the contractor to increase its costs and, consequently, the costs to the taxpayer." Waxman has said the contract to Kellogg Brown & Root (KBR) could be worth up to $7 billion over two years.

In his response, Flowers said that sum was based on the "worst scenario" that a large proportion of Iraq's 1,500 wells would be set ablaze, and that there would be "massive intentional oil spills and pollution resulting from the fires." It turned out only a few oil wells were set ablaze during the war.

Flowers said "task orders are placed only for work that is required in the near term."

"For each order, the government establishes the scope of work and estimated cost. The scope of work is presented to the contractor, who prepares its technical and cost proposal for accomplishing the work," wrote Flowers.

He did not give an overall dollar amount on the contract.

Halliburton has said accusations that it received preferential treatment were off-base. It has said KBR is the only contractor that could implement the complex contingency plan.

In a March press release, Halliburton said once the oil well fires were put out, it would "provide for the continuity of operations of the Iraqi oil infrastructure."

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