United States Government Approves KBR Purchasing System.

HOUSTON -- DCMA declared KBR's purchasing system's policies and practices "effective and efficient, and provide adequate protection of the Government's interest"

Halliburton (NYSE:HAL) announced today that its subsidiary, KBR, has been granted continued approval of its purchasing system by the Defense Contract Management Agency (DCMA). The DCMA is the United States Government agency that has the authority to make final decisions and judgments about the adequacy of the Company's business systems.

KBR underwent an extensive Contractor Purchasing System Review (CPSR) conducted by the DCMA in April and May of this year. Prior to this review, KBR's purchasing system had been approved by the Government in June 2003. It was determined that another review was prudent due to the unprecedented level of support KBR currently provides the military in Iraq and Kuwait.

DCMA issued an approval letter on September 7, 2004, stating that KBR's purchasing system's policies and practices are "effective and efficient, and provide adequate protection of the Government's interest." KBR has repeatedly said that its purchasing system provides the flexibility and responsiveness necessary to meet the needs of its customers in a war zone. KBR's priority remains making certain that the troops have the best possible food, shelter and living conditions while fighting the war in Iraq. We will continue to work with all Government agencies to establish that our contracts are not only good for the United States, but also the company is the best and most qualified contractor to perform these difficult and dangerous tasks.

"While expected, this is clearly good news. Despite the constantly changing requirements of our customer and the challenges associated with operating in such a hostile environment, KBR continues to comply with the Government-mandated Federal Acquisition Regulation in all of our procurement actions, and we constantly seek out and implement improvements to our systems," said Andy Lane, president and chief executive officer, KBR. "This latest approval of our purchasing system by the Government only validates that fact."

Halliburton has a 60-year history of working with the government. KBR helped build U.S. warships in World War II, as well as projects in Somalia, Rwanda, and the Balkans. Halliburton also helped put out more than half of the oil well fires in Kuwait during the 1991 Gulf War. We are proud to serve the troops making them feel a little closer to home.

Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services and Engineering and Construction Groups. The company's World Wide Web site can be accessed at www.halliburton.com.