(Photo by Andrew G. Wright for ENR)

The Corps' emergency contract through Houston-based Halliburton KBR resulted in allegations of some $61 million in overcharges. As a result, a criminal investigation by the Pentagon is ongoing. Rep. Henry Waxman (D-Calif.) calculated that Altanmia charged $1.17 per gal for gasoline purchased through KPC and $1.21 per gal for transportation from Kuwait into Baghdad. KBR's mark-up ran the total delivered price to $2.64.

Under the new arrangement, KPC's price is $1.50 per gal for gasoline, which includes $0.42 per gal for Altanmia's transportation. In a three-month contract that begins April 1, KPC will earn $79.9 million for delivering 47.6 million gal of gasoline and 30.9 million gal of diesel.

Waxman, the ranking minority member of the House Government Reform Committee, quickly sized up the difference between the Corps' contract price and the lower amount that DESC secured. "Altanmia dramatically reduced its transportation prices to win this contract," he said in a statement. "This raises many questions about why Halliburton was charging taxpayers so much more for the very same services. The new contract shows that real competition can save the taxpayers millions of dollars."

Halliburton defended its earlier price, pointing out that it was negotiated on a 30-day basis, while the new contract is for a 90-day term, with three renewal options. DESC noted that it had 15 competitors for the Iraq fuel deliveries and 19 for the transportation contract. DESC award a $71.8-million contract to the Shaheen Business and Investment Group in Amman for shipments of 35.6 million gal of diesel and 23.8 million gal of gas from Jordan into Iraq.

KBR will continue to ship fuel from Kuwait until the DESC shipments begin, a spokesman in the Tulsa office says. Through the end of February, KBR had invoiced the government $968.3 million for emergency deliveries of gasoline, diesel and kerosene, the spokesman added.