KBR Responds!


KBR was treated unfairly at a hearing last week discussing the contractor’s performance under the Army’s key logistics contract, a top company official wrote the Wartime Contracting Commission on May 12.

William Bodie, KBR’s interim president for government and infrastructure, wrote in the letter obtained by Federal Times:

At no time during the May 4 hearing was there discussion or reference as to how to evaluate contractor performance in a wartime environment, nor were there any questions probing these issues which are fundamental to the Commission’s mission. Instead the Commission set aside policy debate in favor of judgmental and biased statements against KBR.”

During a May 4 commission hearing on the Army’s Logistics Civil Augmentation Program (LOGCAP), the Defense Department’s top auditor outlined unprecedented levels of waste and abuse tied to the LOGCAP III contract KBR has held since 2001. 

Under the contract, KBR has provided $32 billion worth of construction, maintenance, meal, recreation, housing, laundry and other services at U.S. military bases in Iraq and Afghanistan. But April Stephenson, director of the Defense Contract Audit Agency, said that her auditors have identified $7.6 billion in questioned or unsupported costs under the KBR contract.

She also said the bulk of the 32 war-related fraud cases DCAA has forwarded to department investigators are tied to LOGCAP work performed by KBR or its subcontractors. Finally, she said KBR’s accounting systems are inadequate to account for subcontractors’ costs.

Bodie said many of the cases and overcharges highlighted in DCAA’s testimony are old and have been resolved. He also criticized commission members for expressing their opinions about whether KBR should continue to get work from the Army under the follow on LOGCAP IV contract.

Members placed undue emphasis on DCAA’s testimony and failed to present facts about the effects security and infrastructure conditions in Iraq and Afghanistan had on contract performance, which were presented in a KBR written statement to the commission, Bodie said.

He wrote May 12:

Expressions of opinion, on issues which reasonable people could disagree, were taken for granted as fact as long as they fit an apparently predetermined narrative that was highly prejudicial to KBR.

Bodie noted that during the lengthy hearing the commission did not mention observations or recommendations KBR provided in its written testimony, such as KBR’s voluntary reporting of employee misconduct and cooperation with contracting officers to resolve billing disputes.

Wartime Contracting Commission spokesman, Clark Irwin, said that although some commissioners voiced their opinions about KBR’s performance, the members are dedicated to ensuring the commission’s final report on contract reform is a consensus document developed in a non-partisan manner.

“I can understand that people don’t like to hear themselves criticized if they’re not in a position to respond immediately,” Irwin said. “But I assure KBR and interested members of congress that the Commission is committed to a fair and open process.”

Irwin also noted that the commissioners have spent time visiting KBR facilities at home and abroad to collect information from the company on contract performance and management. The commission plans to hold a hearing to present industry’s point of view on what government’s contract management failures have been and how they can be addressed, he said.


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