KBR Receives LogCAP III Award Fee
HOUSTON, May 12, 2010 (BUSINESS WIRE) — KBR announced today that it received a $60 million award fee related to its LogCAP III work in Iraq, Afghanistan, and Kuwait. On May 10, 2010, KBR was notified by the U.S. Army’s LogCAP Program Award Fee Government Determining Official of the completion and final decision related to the review of award fees for Task Orders 139, 147, 151, and 159 for the period May 1, 2008 through August, 31 2009. For this period, the Award Fee Determining Official rated KBR’s performance as Good, Very Good, and Excellent on multiple award fee pools.
As of December 31, 2009, KBR had written off the full amount of $112 million in accrued award fees for the period May 1, 2008 through December 31, 2009, of which $92 million was related to the recent performance review period May 1, 2008 through August 31, 2009. The aggregate of this award will result in an increase in our after tax income by approximately $39 million, or $0.24 of earnings per diluted share. The next award fee board is tentatively scheduled for the second quarter of 2010.
KBR is a global engineering, construction and services company supporting the energy, hydrocarbon, government services, minerals, civil infrastructure, power and industrial markets. (Click HERE for original article)
Every time something like this happens I wonder if it will be the last straw and the Congress will do something. So far I am continually disappointed.
If you remember, KBR was given no fee for the 1st Quarter of 2008 since this was the period in which SSG Ryan Maseth was electrocuted at a KBR managed facility. Apparently you are only responsible for a quarter’s worth of fee for getting caught killing one soldier. Then it is back to normal!
In a sane world, the Army would have gone back and taken all award fee for 2007, when KBR managed the installation where SSG Maseth was killed and failed to perform proper maintenance. KBR would have received no fee for 2008 while electrical problems all over Iraq, Kuwait and Afghanistan were corrected by Project SAFE. Unfortunately the Army has consistently protected the financial interests of KBR, often at the expense of soldiers. Why would the Army do this? Perhaps you should ask someone like LTG (Ret) Richard Hack, who was Deputy Commanding General of Army Materiel Command (AMC) in 2004 and 2005. AMC had responsibility for LOGCAP during this period and performed numerous actions to support KBR. LTG (Ret) Hack now works for KBR.
Since the Army has just given all life support in Iraq to KBR under LOGCAP III, rather than compete under LOGCAP IV and save money, this has been a good couple of weeks for KBR. The deal is especially sweet as the Army is now hinting that they may remain in Iraq for longer than the President’s time-table for withdrawal. As long as the Army is there, KBR will be earning profit on LOGCAP III without any of that pesky competition.
It is time for the Senate in the form of the Armed Services Committee or Claire McCaskill’s Sub-Committee on Contract Oversight to demand answers from the Army on why they are still taking care of KBR at the expense of taxpayers and soldiers. They should explore the web of retired general officers working for KBR who may have improper influence on current Army decisions. The Senate has the leverage to hold promotions or programs until the Army provides honest answers and corrects their actions.
Where is a Harry Truman when you need him?
Mr. Smith – you of all people on this site should be well aware that Award Fee periods and evaluations are in fact independent from other award fee periods.
Lets also remember that the award fee scores and evaluations are conducted by the customer – not by the contractor. And require written back up for the ratings.
As I was not on the AFEB and I am guessing neither were your – we have no idea what the basis of the award fee was. It is not the contactors that need investigation. If the contractors are not performing over and above the requirements of the contract – which is after all the requirement for receiving an award fee – then it is the evaluators – the ones in the field that wrote the individual reports – not the General whos staff compiled them and signed off on them who need to be investigated.
I recommended a review of 2007 award fees because it is probable that they were based upon poor information, some of which was supplied by KBR. Should KBR have certified for 2007 that the performed work in accordance with required standards, when, in fact they did not do so, then the Army does have legal standing to initiate recovery of improperly paid fee.
I do not assert that this was the case. Hoever, SSG Maseth was electrocuted in early 2008. Problems with wiring at RPC date back to 2007, as noted in the DoD IG report. For this reason, I feel the Army should review both cost payments and fee payments for 2007.
Unfortunately,the General who signs as AFDO has sometimes been well aware of problems with even attaining successful performance, let alone exceeding the standards for KBR work. April Stephenson, when head of DCAA, made it clear that DCAA performance evaluators alerted the boards to failures in business systems and cost control. Frankly, the decision to give KBR award fees that they did not earn was managed at the leadership level, not the performance evaluation level. The award fee process I observed in 2005 did not run “by the book.”
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
Dwight D. Eisenhower
No Chaos of a transition i believe Mr Smith. I am sure Ms McCaskill will make a lot of hay about this but i remember both presidents have said they will support what the troops on the ground need and i believe the commanders have spoken according to the ASC documents released. If Mrs McCaskill continues to rant about this then it will force a review of Afghanistan’s transition and it will bring to light what has happen during the phase of switching contractors, how much cost savings of a independent audit and all of the problems will be made public. I guess a lesser of the two evils Mr Smith. No one wants to admit they were wrong, but by digging deeper the truth will come out. I am sure if Mrs Crawford will put her hounds on it i am sure more will come out of Afghanistan.
Is the BCA among the documents you have seen from ASC? I sure would like to read it. However, I would suspect not, because some of the discussion concerning the drawdown would correctly be classified.
I hope the truth about Afghanistan does come out. What really bothers me is the Army claims that Afghanistan transition was a success, claims they saved money and then claims they cannot do this in Iraq. That just is not consistent.
Show me the money! KBR…transform and roll all over these other nay sayers. Mr. Smith…sir…you are a smart man…now that being said….(edited by Ms Sparky). KBR did a great job or the ARMY would not have gave them the award. I am sure if Fluor and Dyn Corp do a good job they will get a pat on the ass and get an award fee bonus also.
Excuse the freakin’ hell out of me. You are not going to talk to Charles Smith like that on Ms Sparky. You are now moderated. Disagreeing is one thing. Being all out rude and disrespectful to someone like Mr. Smith is unacceptable.
Optimus you got moderated? I went back and looked at some of the post and the disrespect of General Officers and other folks who disagreed were not moderated? Is there some bias here? I was told this was a forum where you could voice your opinion without being singled out? Of all the things that have been said about KBR management and General Officers in the military and those posters were not moderated. I am getting a clear picture of what this blog is about. If you are not with the program you take a chance of being moderated if not then you will be censored. Yes Mrs Crawford this is your blog but in a way you are biased. Thank you for allowing me to post this response.
I have been moderated. I feel violated and dirty. I am so not worthy. Hmm – wow – I dont know what to say, but – here goes. I like to have fun and not be so serious about things and have some fun on this blog because everyone is so serious. Yes I work for KBR and that award fee was pretty cool. Also Mr. Smith, I was not being disrespectful, but I was trying to have some fun and poke at you like I poke at everyone. Ultra Magnus, you are correct…KBR didnt award themselved the money…The ARMY gave it to KBR after due diligence. I know KBR has its flaws just the same as every contractor over here in Iraq or Afghanistan. The transition in Afghanistan is going terrible for one of them and well….oops, I moderated myself…sorry. Ultra Magnus – thanks for having my back sir. Carry on good people and tho my spark may die on the battle field, I shall endure. i shall be free. I shall endeavor. any other autobots out there- carry on and roll out …the truth.
OP-Your comments have always added value to the conversation, plus you are damn funny and I love reading them. But that one was…..over the line where Mr. Smith was concerned. Can we just chalk it up to battle fatigue?
Some brief comments:
1. I surely am not perfect and have been corrected several times at this site. I appreciate it when it is done.
2. My staff when I worked LOGCAP also knew I was not perfect and found some ways to poke a bit of fun on occasion. I certainly agree you need a sense of humor in this business, especially about yourself.
3. I think the world about most KBR, DynCorp and Fluor employees who work in Kuwait, Iraq and Afghanistan. Most of the ones I met on the ground wanted to do the best job they could for the troops. Many went in harm’s way, especially the truck drivers. I especially like this site for supporting both the troops and the contractor employees when they have issues.
4. 90% of the generals I have met were smart, dedicated and effective leaders. Several of them, including MG Wade McManus, GEN Paul Kern and MG Vincent Boles leave me in awe of their abilities and their care for the soldiers. A couple I have worked with do not meet that standard.
5. Finally, from my experience, you should be a bit skeptical about award fee decisions. Unfortunately, President Eisenhower was right that the military contractors do gain an ability to influence decisions in their favor, rather than in favor of the troops and tax payers. Amd it is not just the military. We are now seeing how BP influenced the regulators of their drilling operations! All I advocate is the Reagan motto, “Trust, but verify.” It is the role of Congress to verify.
After a brief case study of O.P’s comments one quote comes to mind by Samuel Butler (English novelist, essayist and critic, 1835-1902) “The truest characters of ignorance are vanity, and pride and arrogance.”
Baboo – did you just call me ignorant? I will have you now that I graduated with a 3.9 GPA. Also – I may joke and cut up and like to poke fun – I am far from ignorant. I like to listen and soak up all that goes on and make tactical decisions based on information given to me. I listen to the people who work for me and actively care for thier well being and safety when they work.
You on the other hand sound like you never get outside in the sun…you need to get your nose out of the books and learn to loosen that sphincter and have some fun instead of calling people ignorant. I will moderate myself now.
Optimus Prime
I didn’t call you anything. I only provided a definition. I was under the impression you were a civilian contractor. To use the phase “tactical” implies you’re engaged in combat oriented missions or using the term as in planning scenario to accomplish a purpose.
Vanity is the excessive belief in one’s own abilities or attractiveness to others.
Pride is, depending on the interactional and cultural context, either a high sense of one’s personal status (i.e., leading to judgements of personality and character) or the specific mostly positive emotion that is a product of praise or independent self-reflection. and arrogance.”
Arrogance or the act or habit of arrogating, or making undue claims in an overbearing manner; that species of pride which consists in exorbitant claims of rank, dignity, estimation, or power, or which exalts the worth or importance of the person to an undue degree; proud contempt of others; lordliness; haughtiness; self-assumption; presumption.
Ignorance is where someone or something is uninformed. This should not be confused with being unintelligent, as one’s level of intelligence and level of education or general awareness are not the same.
Ultra Magnus – you are correct sir…I like your tone and way of thinking. Sparky needs to put her hounds out like you said and put the truth out there for all the world to see. Preach the gospel of the CAR Sparky..come on…get down in the aisles and give us the pure gospel of the truth…dont hold back…give it to us all in a fair and unbiased manner. Kick em when there up and kick em when there down…I dont really know why KBR pissed you off so bad that you have to crack thier asses and dont crack the others. Come on Sparky…lay the smack down on the other 2 contractors. the truth shall set you free so dont hold back…full frontal assault on Dyn Copr and Fluor..same as KBR…..Come on you can do it
Send the hounds of hell into the breach. Send them to sniff out the truth. Have them eat the hearts of the wicked and ferret out the insedious bastar$$ who are corrupt. Be unafraid to speak the truth. Be scared of the reprecusions the truth may have……oh yeah,, bye the way, I was told we also won LOGCAP IV in Bahrain…just something else to be pissed off about…can you smell it now…smells like award fee money..MMMMM good smell.
Cool pic of the cat in the story…made me laugh.
Uh Deb – I am saying this in jest – but you do seem to have a large number of pictures of cats in distress that you post. Tell me these are off the web- right – and not your backyard. LOL They are quite cute though.
Uh….yeah right….off the net….
Forseti found this one. They do seem to express what I am thinking though…..don’t they? Is that not a WTF expression?
Hey Deb,
You’re not turning into that crazy cat lady from “The Simpsons” are you?
Turning into to? I think I’m already there!