The $13 billion no-bid contract awarded to Halliburton for services that support US troops in Iraq will be pulled back by the Army, split into at least six separate functions, and opened to competition from other companies, The Wall Street Journal reported. Citing an internal Army memorandum, it said the decision was made not to penalize Halliburton but to achieve greater efficiency in the Iraq mission. Halliburton subsidiaries provide housing, food, transportation, laundry, and other needs for the troops. The Journal said the process would begin immediately and could be completed by year's end. It quoted a Halliburton spokeswoman as saying its Kellogg, Brown & Root division, although in bankruptcy proceedings, would consider entering the bidding. The contract has been controversial from the start, with critics of the Bush administration pointing out that Vice President Cheney was Halli-burton's chief executive from 1995 to 2000, although he has denied using his influence to give the company preferential treatment. In addition, Pentagon auditors last month "strongly" urged the Army to withhold payment of 15 percent of Halliburton's bills on grounds that it hadn't justified more than $1.8 billion in charges.
US Airways, struggling to meet a month-end cost-savings deadline to remain eligible for a government loan, was dealt a blow late Monday when the union representing pilots declined to put its latest contract offer to a ratification vote. In scrambling to avoid a return to bankruptcy, the carrier had hoped that its pilots would agree to a 35 percent pay cut and a 30 percent reduction in contributions to their retirement plan.
Unions representing employees of Alitalia, the cash-strapped Italian airline, withheld their OK of the emergency rescue plan detailed for them Monday. Instead, they called for further negotiations. The plan, which would split Alitalia in two and would result in a loss of 5,000 jobs, must be approved by the unions not later than next Wednesday, the carrier said. But the president of one union said layoffs were unacceptable, telling the Financial Times: "This plan isn't about relaunching the airline but [about] cutting the cost of labor."