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Windfalls of war: KBR, the government’s concierge

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Despite Greenhouse’s allegations, and a series of audit reports criticizing the contingency contract,  Army officials continued to deny that there was anything improper with the decision to sole-source the oil contract to KBR.

In the meantime, as LOGCAP grew, the problems became hard to ignore. Pentagon audits and government reports accused KBR of overbilling. At one Wartime Contracting Commission hearing, April Stephenson, then head of the Defense Contract Audit Agency, confirmed that the LOGCAP III contract had generated $553 million in questionable billing and 32fraud referrals for investigation. “I have to say in the history of DCAA I do not think we are aware of a program, a contract or a contractor that has had this number of suspensions or referrals,” she testified [7].

Some criminal charges have already resulted regarding the LOGCAP contract, including a former employee who pleaded guilty to receiving kickbacks on a subcontract to a Kuwaiti company.

The U.S. government is also now in the middle of a $100 million lawsuit against KBR, alleging breach of contract and false claims related to providing private security under the LOGCAP contract. A federal judge in August rejected the company’s bid to have the suit thrown out.

Facing mounting criticism of the LOGCAP contract, the Army eventually held a new LOGCAP competition, and in 2007 awarded contracts to three companies — KBR, DynCorp, and Fluor Corporation — under what was called LOGCAP IV. Unlike the previous LOGCAP III, the three companies under LOGCAP IV would compete for individual task orders, creating an incentive for lower price and better services, and quelling the major criticism of the previous contract structure.

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5 Comments

  1. Comment by JOBS PLAN WATCH:

    Jobs Plan. What would it mean to U.S. Small Business if the 45% of Prime Contractors subcontracting was enforced – just for this PRIME?

    I don’t mean foreign Muslim owned small business, I am talking about U.S. Registered and certified small businesses where the dollars made have a chance to circulate in the American Economy.

    Has anyone asked what dollar value has been spent at foreign-owned businesses (many owned by Muslims) vs U.S. Owned (51% or greater ownership ) THAT OBAMA is a jobs plan. Make all U.S. Government contracts be performed and supplied by U.S. Registered Small Business. Indian doesn’t mean India, it means North American Indian.

    The United States has sold out U.S. Businessmen and Businesswomen. Obama, start with the $ 770 Billion that Congress just approved for the DoD.

    Enough said. Nothing will change because Contracting Officers are NOT being held accountable. If they were, the winners would be Americans instead of foreign-owned small businesses and where are those dollars going after they are wasted ? Buildings in Lebanon with the profits going to what organization. You have to wonder where the money is going after first spent by the U.S. ? IT is not coming back into the U.S. Economy if spent on a foreign owned business. Wake up Obama. Your contracting officers taking kickbacks are getting them from foreign owned and then those continue to get more contracts because the FBI and Army CID are neutered when it comes to taking action against them. So, don’t let them have to worry about getting kickbacks themselves to look the other way. Don’t let ASG commanders worry that they cannot initiate an IG because their revenue stream will suffer. And stop giving money to foreign owned small business – that is the JOBS PLAN OBAMA that is Patriotic and American. Get on it.

  2. Ping from State Department Mismanages Food Contract in Iraq | Private Security Jobs:

    […] day whilst conducting diplomacy. The purveyor of said food, mega-contractor KBR, has pocketed some $37 billion dollars of taxpayer money. And guess […]

  3. Comment by Brittany Coffey from Houston, TX:

    Ms. Sparky,
    I’m the daughter of a overseas contractor and I was wondering if you knew of any way to find them? or even just contact them? Thank you or if anybody has heard of him, his name is Kenneth (Ken) Coffey.

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