The report was prepared by Henry Waxman, a Democratic US legislator from California.

He said Democratic staff members of the house committee on government reform examined a series of government audits and correspondence that criticised Halliburton's performance under the Restore Iraqi Oil 2 (RIO 2) contract.

The documents, he said, cited profound systemic problems, misleading and distorted cost reports, and an "obstructive" attitude towards oversight.

Halliburton, a Texas-based company formerly run by Dick Cheney, the vice-president, said the committee report focused on old issues that have been resolved.

Company response

The company said in a statement: "After two years and from thousands of miles away, it is easy to criticise decisions and actions that were based on urgent mission requirements and severe time constraints."

Halliburton said that the contract went through countless changes and review by at least 15 government contracting officials.

Halliburton is the largest private contractor in Iraq.

Troop support

The Democratic report said that in addition to the RIO 2 contract, Halliburton was paid $13.5 billion for providing troop support under a logistics contract with the US army, and $2.4 billion under the original RIO contract to import fuel into Iraq and rebuild Iraq oil infrastructure.

The documents showed that the Pentagon project and contracting office (PCO) found that Halliburton repeatedly overcharged the government, Waxman said.

Halliburton was also paid to give
support to US soldiers

In one case, the agency said Halliburton "tried to inflate cost estimate by $26m". In another, it said Halliburton claimed costs for laying concrete pads and footings that the Iraqi Oil Ministry had already installed.

The report said the same agency reported that Halliburton was "accruing exorbitant indirect costs at a rapid rate," while the Defence Contract Audit Agency challenged $45 million of $365 million in costs as unreasonable or unsupported.

The PCO also criticised Halliburton's accounting for costs, citing "profound systemic problems," and said some of its documents were stripped of information that would allow tracking of details.

In addition, it said Halliburton's work under RIO 2 was 50% late, and company officials refused to cooperate with oversight officials.

Scrutiny

Halliburton, run by Cheney from 1995 to 2000, has been under scrutiny for its contracts in Iraq, and several US government agencies have looked into whether it overcharged for some work.

Halliburton, the world's second-largest oil services company, has said that criticism of its work in Iraq was politically motivated.

A US army procurement officer, Bunny Greenhouse, last year described Halliburton's deals in Iraq as "contract abuse" and said auditors had flagged more than $1 billion in potential overcharges.