Bunnatine Greenhouse, the corps' principal assistant in charge of contracting, called for an independent investigation in a letter to acting US Army Secretary Les Brownlee, a copy of which was made available to AFP by congressional sources.

The interference in the contracting process "directly impact the integrity of the federal contracting program as it relates to a major defense contractor," the letter to Brownlee said.

Brownlee referred the accusations to the Pentagon's inspector general for review and possible action, an army lawyer said in a letter responding to the Greenhouse call for an investigation.

Coming a little more than a week before the November 2 elections, the latest allegations are certain to stoke political charges of administration favoritism toward the oil services giant, which was once headed by Vice President Dick Cheney.

Michael Kohn, Greenhouse's lawyer, said the official was coming forward now because a meeting October 5 with corps' commander made clear her concerns would not be redressed.

"As a result, she was no longer capable of working within the system," he told AFP.

In the letter to Brownlee, Greenhouse's lawyers argue that she "experienced repeated interference with her role as" the US Army Corps of Engineersprincipal assistant responsible for contracting and its "competition advocate."

"This interference was largely focused on multi-billion-dollar contract issues pertaining to a Halliburton subsidiary, Kellogg Brown and Root (KBR)," it said.

It said "employees of the US government have taken improper action that favored KBR's interests. This conduct has violated specific regulations and calls into question the independence of the USACE federal procurement process."

Greenhouse clashed with her superiors at the Corps of Engineers when she raised concerns about their justifications for awarding Halliburton no-bid contracts first on a five-year, seven-billion-dollar contract to restore Iraq's oil industry, and later on an extension of its two-billion-dollar contract to house and feed US troops in the Balkans, which was worth 165 million dollars to KBR.

The letter alleges that Corps leaders shut her out of the approval process by having waivers of the contracting rules signed without her knowledge by military officers in her office.

Greenhouse objected to the contract to restore Iraq's oil industry because KBR had done the contingency planning for it, the letter said.

Awarding the contract to KBR, it said, "conflicted with the usual practice of excluding the contractors who prepare cost estimates and courses of actions, such as KBR did in its contingency plan, from bidding on the follow-on implementation contract due to the potential for conflicts of interest and overreaching by the contractor."

She also questioned the Corp's citing a "compelling emergency" as justification for granting KBR a five-year contract, arguing that it should be limited to one year.

Rather than sign her name to the document justifying the no-bid contract, she wrote a note on the document of her objection, which drew the attention of congressional overseers. The contract was ultimately changed to a one-year contract.

But Greenhouse was kept in the dark when other KBR contract matters arose, according to the letter.

When auditors found a 61-million-dollar overcharge for fuel by KBR in December 2003, the commander of the corps waived a requirement that KBR provide cost and pricing data to back up its billing claims.

"Significantly, Ms Greenhouse did not learn of the waiver until after it was granted," her lawyers' letter said, adding that she would not have approved it because it did not provide a sufficient basis to conclude the fuel charges were "fair and reasonable."

It said the corps' deputy commander went around her back again in January and had a military officer conduct an "independent review" of the contract selection process that resulted in KBR being selected for a follow-on Iraq oil contract.

"Indeed, by this point in time, Ms Greenhouse was generally isolated from participating in issues related to KBR," the letter said.