David Isenberg
Author, Shadow Force: Private Security Contractors in Iraq (Praeger Security International)
Posted: March 5, 2010
I wonder who comes up with this KBR stuff?
Up is down, night is day, and now, in the best tradition of George Orwell’s 1984 newspeak KBR — the company that was the subject of a recent Department of Defense Inspect General report that found that the Army broke federal procurement rules in 2004, when two commanding generals improperly directed a contracting officer to pay millions of dollars in fees to KBR Inc., when funds should have been withheld, per the language in the contract with KBR – has been awarded its first task order under the newest version of LOGCAP.
For those who don’t know, LOGCAP is the mother of all logistics support contracts. Without it the U.S. Army simply can’t function.
The award also comes just a week after the Army announced that KBR would not be awarded $25 million in bonuses under the LOGCAP III Iraq support contract because KBR “failed to meet a level deserving of an award fee payment for work it did during the first four months of 2008.” Although the Army did not specifically cite it when announcing the withholding of the payment KBR’s “failed” work occurred during the time a Green Beret was electrocuted in a barracks shower in Iraq KBR was responsible for maintaining.
KBR was informed of the new LOGCAP task order award, just one day after executives told shareholders about the lost award fees.
The cost-plus, fixed-fee contract, announced Tuesday, is for one base year ($571 million) plus four option years, that, if exercised, could be total $2.8 billion, for work to be done in Iraq.
KBR will provide the following:
• CLSS (Corps Logistics Support Services) at multiple locations in Iraq. Services will include vehicle maintenance (organizational and direct support levels), Supply Support Activity, Central Issue Facilities, Self Service Supply Centers, Ice Plant Services, some Air Terminal Operations and Bulk Fuel Operations to include fuel laboratories.
• TTM (Theater Transportation Mission) which will include multiple transportation functions such as Bulk Fuel Transportation, Sustainment Transportation (movement of maintenance repair parts and other supplies), Heavy Equipment Transport, Movement Control Functions, Material Handling Equipment functions, Recovery Operations and refrigerated transport.
• Postal Services which will include supporting Joint Military Mail Terminal functions, distribution and transportation of mail, augmentation of Army Post Offices, mail handling equipment, mail processing, and receiving and sorting mail.
As a result of criticisms leveled against KBR, the Army Materiel Command ended the previous LOGCAP III contract, which KBR held, and replaced it in 2007 with the current LOGCAP round, dubbed “LOGCAP IV”. Unlike the past three rounds, under the current version three contractors (KBR, DynCorp, and Fluor Corporation) were awarded contracts, whereupon the three could compete for future task orders. LOGCAP IV has one base year and nine option years with a total potential of $5 billion per year for three of the contractors but not to exceed $150 billion over the lifetime of the contract.
Little noted is the fact that LOGCAP IV itself is managed by a contractor (Serco-North America) and now is being split geographically between KBR, Dyncorp, and Fluor , which reduces the benefits of a multiple award Indefinite Delivery/Indefinite Quantity (IDIQ) contract that was intended to create competition on each task order.
The inimitable Ms. Sparky, who is to KBR and similar companies, what Sherlock Holmes was to Dr. Moriarty, was the first to break the news, in advance of the official notification, that KBR would receive the award.
But whether this is a good idea is far from settled. Before going any further let’s acknowledge that LOGCAP workers out in the field do critically important, if unrecognized, work such as providing laundry services and bath facilities, food service, mortuary affairs, sanitation, facilities management, morale, welfare and recreation, information management, transportation, medical services, engineering and construction, and power generation and distribution.
For KBR this is not just about money but also a chance to burnish its reputation, which its management has done a good job of tarnishing over the years thanks to billions of dollars in unsupported charges, shoddy electrical work, hazardous burn pits, and failure to protect its employees from being raped, just to name a few things.
KBR sent out an all hands email to its employees that says, “With so much negative news about KBR and the fact that we have not won a LOGCAP IV task order, it is with great pride that I am able to announce that KBR is now in the LOGCAP IV business.”
To some KBR resembles Mario Puzo’s Godfather in that it is the position of making the Army an offer it can’t refuse As the DoD IG report on the decision not to withhold payments to KBR when it should have done so under the terms of its contract, “The decision to postpone the withholding of funds was influenced by contractor claims that the withholding might adversely impact their ability to provide vital support services to the troops.”
Put another way, last May the Commission on Wartime Contracting held a hearing where Jeffrey Parsons, executive director of the Army Contracting Command had this exchange with Commission Ervin:
But it sounds like you are saying that if we were talking about fewer undefinitized contract actions, with less money at issue, that that would have been one thing, but because the number was so large and because the value we are talking about was so large, it is essentially a too big to fail issue here. I want to know what you meant by that and why the Army made that determination. And, by saying that it posed a serious risk to the contractor’s ability to support the warfighter, does that mean that had that money not been withheld, that KBR would not have supported our troops in the field?
Mr. Parsons. Sir, that was the unknown. To be quite honest, there was a lot of concern. When you took the total amount of money that had been, that was undefinitized at the time, and applying that withhold would have been a significant amount of dollars, additional dollars that were already either being withheld in some nature or tied up in billing.
So the Head of the Contracting Activity at that time, after taking input from many, many different sources, decided that the risk associated with applying that withhold, given the potential operational impacts, in his judgment, was not the right move to make. So that is why we pursued that deviation.
Charles Tiefer, a professor of government contracting at the University of Baltimore Law School and a member of the Commission on Wartime Contracting said, “Giving KBR this contract while denying them award fees for their enormous problem of accidentally electrocuting soldiers amounts to rapping them on the knuckles on one hand while handing them a multibillion dollar deal in the other.”
Not mentioned in all the current news coverage, according to says Charles Smith, who oversaw the LOGCAP contract during the early days of the Iraq war as chief of the Army Field Support Command, is that “the intent of LOGCAP IV was to create the competitive possibility of losing work due to poor performance. Setting a precedent of sticking with the first contractor dilutes competition incentives.” If the Army abandons the competitive incentives of LOGCAP IV, some informed observers think we will be back to the problems of LOGCAP III.
Additionally, the award in Iraq was to comply with evaluation criteria, including past performance. The integrity of the contract is damaged if the combatant commanders call the outcome, no matter the evaluation criteria.
Thus far, not all members of Congress are pleased with the KBR award. Congressman Edolphus Towns (D-NY), who heads the House Oversight Committee, wrote to Defense Secretary Robert Gates to question the Army’s decision. Senator Byron Dorgan, (D-ND) who chaired several Senate hearings on electrocutions of soldiers in Iraq resulting from shoddy contracting work by KBR, said the Army’s past LOGCAP, or logistics, contracts had produced “the greatest waste, fraud and abuse perhaps in the history of our country.” (Click HERE for original article)
Head on over to Amazon.com and take a look at David’s book Shadow Force: Private Security Contractors in Iraq (Praeger Security International)
Another outstanding article by David Isenberg @ the Huffington Post…..What is my favorite part of the article you ask?? (You did ask right?)
“The inimitable Ms. Sparky, who is to KBR and similar companies, what Sherlock Holmes was to Dr. Moriarty, was the first to break the news, in advance of the official notification, that KBR would receive the award.”
(So tell me that’s not the best part?)
LOL, Sparky what a minute i told you about that before it happen
Ksniper – Ms Sparky is NOTHING without the awesome readers who contribute to the information pool! THANK YOU!!
And the ones that contribute to the hit count? You forgot us
I would never EVER put you second to anyone or anything! Ms Sparky readers are the best and they are informed! That is where my loyalty lies.
The inimitable Ms Sparky indeed. One morning as I was conducting the “JBB Orientation for New Hires, Rehires, and Transfers” as it is officially titled, an attendee spoke-up and said, “You have the perfect personality for this”.
That moment gave me pause to reflect that in order to gain the involvement of an audience during a presentation whether in public speaking or in writing, the subject matter must be delivered in an entertaining and engaging manner. It’s universally true, that from the Board Room to the Boiler Room – no matter what station in life people are at – they just aren’t interested in repetitious hyperbole. They want something fresh, something bold, and they want to be challenged to expand the borders of their thinking – not subjected to the same spam in a different can.
People want to hear about and participate in discussing ideas which stimulate their mind and cause them to think – which in turn leads to even greater personal development. In other words, I’ve learned that you’ve got to give people something practical – something they can actually use to improve their lot in life.
Gaining a readership requires the author to supply people with what they are interested in. People want subject matter that is going to feed their head. Subject matter that serves for the basis of interesting topics of conversation whether by the water cooler of some 75th floor penthouse suite located in New York City – (New York City? GET A ROPE!) – or waiting in the broiling desert sun for the bus to take you to the PX – the definition of a conversation being an exchange of ideas, information and opinions.
It’s the same process repeated throughout our ongoing evolution which has served us quite effectively from the day of cave-dwellers till now. From the Big Bang to the present, the universe is still expanding and so are people’s minds. The jury’s still out however on Global Warming.
And I have said all that to say this – if it were not for you, the truly inimitable Ms Sparky as you are known by millions of fans – well, maybe not quite that many but close – if it were not for you, I would not be this far along as I am now, in both my creative and critical writing abilities. Participating in the Ms Sparky blog has made me a more aware informed individual, and a more capable, confident person.
You are referenced by the uncontested, #1 blog in the world, the illustrious Huffington Post, and you are even spied-upon by Corporate Big-Wigs quaking in their hand-made thirteen-hundred and eighty dollar a pair Berluti Rapiécés Reprisés, daily vexed-sorely by the singular nightmarish thought they’ll awaken from the dream only to discover they’ve fallen from grace.
You serve as a voice for those with no voice, and perhaps most importantly, you give the common man a place to say what’s on their mind.
As far as KBR’s little logo you have there… I believe there are several mistakes in it’s design. It should read “No Leadership”
“No Dignity” and “No Management” And under the letters KBR, there is LOGCAP III…which should read LOTOFCRAP III because that is all the taxpayers have gotten from KBR since this whole thing started.
Stay tuned for “LOTOFCRAP IV”
The U.S. Government needs to step up to the plate and take this spoiled child to task and hold it accountable for it’s actions. Instead of enabling it’s bad behavior.
You are imaginative! “LOTOFCRAP III” that’s funny!
Since you ask, I was fond of this, “Up is down, night is day, and now, in the best tradition of George Orwell’s 1984 newspeak…”
Yeah…..that one’s good too….I guess!
I designed it. When it went to HOU they added the star in the middle.
the best part was the congressman saying that kbr was guilt of “the greatest waste, fraud and abuse perhaps in the history of our country.” are you freakin kidding me? CONGRESS gets that award!!
Is he talking about when bill clinton first gave halliburton the contract (LOGCAP I) in the balkans, after dyncorp won it? talk about a no bid!! i think some of these people need to look at the facts instead of being hysterical. THE TTM AND POSTAL contract has always been kbr’s in iraq.
to change it would put too many lives at risk. these are not admin. jobs, these people work outside the wire. to put another company of new guys in the country doing convoys and recovery would lead directly to more contractor deaths and that is a fact..BTDT..now what do you want, kbr to continue doing a contract they already had, or change contracts and get people killed? if so saddle up and be on that first convoy of new guys outside the wire…good luck.
You keep saying referring to the fact if KBR loses/lost the CTP task order it would be all new guys. That’s not the case. It’s not like “OK all KBR drivers take two steps forward, them load them on a bus and send them to the airport. That is just not the case.
ok debbie, you tell me how it is since you were in ttm and iraq. are you saying they will keep the drivers? maybe but they arent the ones leading the convoys..the take over company usually does not retain convoy commanders and foreman. if you think the military units that come and go actually know where they are going think again..sept 05 ring a bell? you tell me this is not the case…and you give me some smart quip..how about tell us all what the case is, since you have been there and know first hand.
How do you know the take over company does not retain convoy commanders and foreman? What war have you been in where a contract such as this was transitioned to another contractor? The Military (client) will not allow the new contractor to disrupt the mission with such a disastrous move has firing ALL the existing leadership. Yes…eventually the new contractor will be bring in their own people for key positions. But the new contractor has 100′s of millions in award fees on the line. The bottom line……it’s not cost effective or as KBR would say “in the best interest of the stockholders” to do that. If KBR is telling that it’s propaganda.
ive spent 22 months in iraq for your information debbie, thats the war ive been to. which one have you been to? how long do you think it takes to learn where the fob’s are? how long do you think it will take for them to transition their people into a leadership position? if you think that they are going to keep kbr people if their pay structures are not compatible then you are wrong. no one said kbr is saying anything…propaganda? your whole post was a guess because you dont know what you are talking about. all you gave was your opinion. not backed up by any first hand knowledge or research.
i dont care how much you think you know..like i said you want to be on that first convoy outside the wire with the new guys? be my guest.
i have no love for kbr, but i do not want to see any of my brothers that are still over there getting killed. most of them will be coming home soon anyway and all this will be a moot point.
just talked to a friend in kuwait who said that if itt loses their contract all levels of managers will lose their jobs..and he said they might keep some of the workers. so if you are so well connected maybe you should find this out for yourself. it shouldnt be too hard for you.
Hey KBR is evil. But it makes money unfailingly, no matter what kind of jobs it does, because it has infiltrated every level of the US government. So that makes it an excellent, secure stock to hold on to. As long as you believe in the corruptibility of the US, then you should buy KBR. I know I do, that’s why I have some shares of it in my portfolio.