A top US Army procurement official said today Halliburton's deals in Iraq were the worst example of contract abuse she had seen as Pentagon auditors flagged more than $US1 billion ($A1.3 billion) of potential overcharges by the Texas-based firm.

Bunny Greenhouse, the Army Corps of Engineers' top contracting official-turned whistle-blower, said in testimony at a hearing by Democrats on Capitol Hill that "every aspect" of Halliburton's oil contract in Iraq had been under the control of the Office of the Secretary of Defence.

Her blistering criticism came as the Democrats released a new report including Pentagon audits that identified more than $US1.03 billion ($A1.34 billion) in "questioned" costs and $US422 million ($A550 million) in "unsupported" costs for Halliburton's work in Iraq.