Ms Sparky

Updated 05/21/2009 1:29 pm PST: Since the Senate Democratic Policy Committee has published the Level III CAR issued to KBR in September 2009 on their site, I am going to publish it here as well. Click HERE to upload pdf.

KBR was issued a Level III Corrective Action Request (CAR) approximately 12 days after Congressman Waxman, Chairman of the Committee on Oversight and Government Reform brutally called KBR, the Department of Defense (DoD) and the  Defense Contract Management Agency (DCMA)  to task for their roles in the lack of oversight and maintenance at Radwaniyah Palace Complex in Baghdad.

This CAR was issued for Radwaniyah Palace Complex (RPC) where SSG Ryan Maseth died from electrocution in his shower on January 2, 2008. Cheryl Harris has filed suit against KBR for the death of her son Ryan. The issuance of this CAR could have a serious negative impact on KBR’s defense in this case and any other pending electrocution cases.

The following is an excerpt from Sikorsky Parts Issues Come to A Head With LeveL III CAR This is the only reference I could find on a Level III CAR issued by the DCMA. It would appear they are quit rare.

What is a Level III CAR?

A Level III CAR is a serious action just one step below the possibility of suspension or termination of contract. The DCMA Guidebook’s “Navy Special Emphasis Programs (NSEPs) Quality Assurance Representative’s (QAR’s) Instruction” as revised on March 30, 2005 discusses Level III CARs in 3.11.3.3 and subordinate passages:

“3.11.3.3 – A Level III shall be used to call attention to serious contractual non-compliances. A Level III will be used when prior requests for corrective action have been ineffective in obtaining contractor resolution of a non-conformance and the contractor will not take additional or appropriate action. Due to the seriousness of the issue, there may be occurrences when a Level III corrective action request may be appropriate yet prior Level I or II corrective action requests may not have been issued. This will not be a normal practice. Level III CARs are normally supported with prior issued Level II CARs.”

Issue Updates

Level III CARs are serious and rare, but not unheard of; in time, many are resolved via acceptance of the company plan and requisite improvements. Most of the time, coverage ceases after the attention-grabbing CAR.

UPDATED: This definition was sent to me on 10-30-08

Definition of a Level-III Corrective Action Request (from the DCMA Product Assurance Guidebook)

Issued to call attention to serious contractual non-compliances to the supplier’s top management. They may be coupled with contractual remedies such as reductions of progress payments, cost disallowances, cure notices, show cause letters, or business management systems disapprovals.

A Level I or II CAR need not be issued before a Level III CAR is generated.
Due to the seriousness of a Level III CAR, it is recommended that it be signed by a CMO supervisor or higher CMO management personnel and coordinated with the ACO.The CMO Commander should be notified before a Level III is issued.

A copy of the Level III CAR and all accompanying correspondence should be provided to the customer, the District Operations Director, the appropriate DCMA Contract Integrity Center (CIC) Counsel, and the appropriate Defense Contract Audit Agency (DCAA) representative. If a prime contract is involved, a copy should be provided to the responsible Government Office at the prime supplier’s location.

When Level III CARs are closed out, copies of the letter notifying the supplier of the closure action should be sent to all those addressed/copied in the original CAR.

KBR’s original response to this CAR was rejected and on October 15, 2008, KBR met with DoD at the Pentagon to present their new Corrective Action Plan (CAP). It is unknown at this time if the new CAP was accepted, rejected or still under review. It would also appear that $800 million in Award Fees could be at stake.

I feel, this Level III CAR paired with the creation of Task Force Safe has spawned the fury of electrical repairs, grounding and bonding, and the hiring of licensed electricians.

All of which could have been done from the beginning, possibly avoiding fires, injuries and deaths.

It is Ms Sparky’s opinion, this is standard operating practice for KBR. It falls under the, “let’s do it till we get caught” contract management style. Consider yourselves caught. And this is just one issue of many.

I ask DoD to take this opportunity to send a clear message to ALL DoD contractors. By withholding any pending Award Fee from KBR, it sends the message that DoD is serious about contractual compliance. And past non-compliance’s will not simply be dismissed and forgiven.

Ms Sparky