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Court Publishes Decision in Contractor Fee Dispute Involving “The Mother of all DFAC Drug Deals”

By Ms Sparky | Filed in GOV. CONTRACTORS, Indictments, Convictions & Arrests, KBR Contract, LAWSUITS, LOGCAP III - KBR, Politics, Reports & Investigations
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– () – May 10, 2012 – The U.S. Court of Federal Claims recently unsealed its opinion and order in the nearly four-year fight by KBR to recoup the $41 million it claims the U.S. Army owes under the LOGCAP III contract in Iraq. The government, in return, filed a countersuit claiming kickbacks two contract managers took from a LOGCAP III subcontractor invalidates ’s claim.

KBR filed a lawsuit in the Court of Federal Claims seeking $41 million in unpaid costs and fees incurred under LOGCAP III for dining facility (DFAC) services at Camp Anaconda, Iraq from July through December 2004. The government filed a counterclaim alleging that the thousands of dollars in kickbacks KBR managers and accepted from DFAC subcontractor Tamimi Global Company, Ltd. should cause KBR to forfeit its claims against the government under various fraud theories and the Anti-Kickback Act.

The case went to trial in late 2011. Two weeks ago, the court issued its judgment, awarding KBR $11,792,505 plus interest but also awarding the government $38,000 in civil penalties on its counterclaim. Interestingly, KBR’s statement about the judgment filed with the U.S. Securities and Exchange Commission (SEC) last week does not mention the latter.

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America’s Shame: The U.S. Government’s Human Trafficking Dilemma

By Ms Sparky | Filed in Commission on Wartime Contracting (CWC), GOV. CONTRACTORS, Iraq Human Trafficking, KBR, KBR Contract, Politics, Reports & Investigations, Trafficking In Persons (TIP) Violations
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– () – May 7, 2012 – For , the offer was the answer to a prayer: A job in a luxury hotel in Dubai–the so-called Las Vegas of the Persian Gulf–making five times what she was earning as a hair stylist in her native Fiji.

She jumped at the chance, even if it meant paying an upfront commission to the recruiter.

You probably know how this story is going to end. There was no high-paying job, luxury location or easy work.

Tuivaga and other Fijians ended up in Iraq where they lived in shipping containers and existed in what amounted to indentured servitude.

Journalist told Tuivaga’s story and that of tens of thousands of other foreign workers in acute detail almost a year ago in her New Yorker piece, “The Invisible Army.”

In some cases, Stillman found more severe abuses and more squalid living conditions than what Tuivaga and her fellow Fijians experienced.

But like Tuivaga, thousands of foreign nationals in the U.S. government’s invisible army ended up in Iraq and Afghanistan war zones because they fell victim to human traffickers.

Let that sink in.

This pipeline wasn’t benefitting some shadowy war lord or oppressive regime. No, these are workers who were feeding, cleaning up after, and providing logistical support for U.S. troops—the standard-bearers of the free and democratic world. Read the remainder of this entry »

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Judge Tosses KBR Defense to Feds’ False Claims Case

By Ms Sparky | Filed in GOV. CONTRACTORS, KBR, KBR Contract, LAWSUITS, Lawsuits Against KBR, LOGCAP III - KBR, Qui Tam, Security Contractors
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“More Cost….More Plus” as the managers used to say!

Ryan Abbott - (Courthouse News) – WASHINGTON – Defense contractor KBR cannot deflect fraud claims by accusing the U.S. government of failing to provide “force protection,” a federal judge ruled.

Formerly known as Kellogg Brown & Root Services, the contractor faces up to $300 million in civil penalties and treble damages on charges that it overbilled the government for private security contractors in Iraq.

The Army hired KBR to provide logistical services, such as transportation, maintenance, facilities management and dining facilities, for U.S. military operations around the world. But the contract excluded payment for armed contractors that provide security for KBR and its subcontractors.

Though KBR hired , and to provide security for executives in Iraq, the government says it should have relied on military protection. Its 2010 complaint alleges that KBR collected “more than $100 million in payments related to private security.”

In a 2011 answer and a counterclaim, KBR accused the government of not providing enough security.

Chief U.S. District dismissed the counterclaim Monday but said the contractor can try revising the claim to pass muster at a later date.

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KBR asks federal judge to dismiss case brought by Oregon soldiers

By Ms Sparky | Filed in A Soldiers Story, CHEMICAL AND OTHER EXPOSURES, GOV. CONTRACTORS, KBR Contract, KBR Investigations, Lawsuits Against KBR, RIO-KBR, Sodium Dichromate @ Qarmat Ali
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Mike Francis – (The Oregonian) – January 27, 2012 – Lawyers for defense contractor Inc. asked a federal judge in Portland Friday to dismiss the suit brought by a group of soldiers who said the KBR knowingly exposed them to a carcinogenic compound while they served in Iraq in 2003.

U.S. District heard the arguments for two hours Friday morning, then said he would rule on KBR’s request in the coming weeks.

Friday’s arguments, while delivered in calm and measured tones, included some stinging accusations. KBR’s lawyer said the soldiers’ primary medical expert is “a junk scientist who cannot be trusted.” And the soldiers’ lawyer said KBR committed “fraud” in its conduct at the Qarmat Ali water treatment plant and in its actions afterward.

While KBR is technically asking the judge to dismiss the entire case brought by 34 Oregon National Guard soldiers, KBR lawyer Geoffrey Harrison of the Houston law firm of Susman Godfrey acknowledged that he expects some subset of the group will survive the legal challenge and proceed toward trial.

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U.S. Army protects KBR from willfull misconduct in Iraq

By Ms Sparky | Filed in CHEMICAL AND OTHER EXPOSURES, GOV. CONTRACTORS, KBR, KBR Contract, LAWSUITS, Lawsuits Against KBR, Politics, Qarmat Ali Lawsuits, RIO-KBR, Sodium Dichromate @ Qarmat Ali
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Indemnification clauses are nothing new in defense contracting. Many defense contractors  now have or have had in the past, contracts with the Pentagon containing indemnity provisions. These provisions potentially immunize the contractors from legal accountability for harm caused during the implementation of their contracts. Indemnification clauses are most commonly found in high risk contracts dealing with the manufacture and disposal of hazardous materials for the Pentagon. Most importantly these indemnification clauses are not necessarily “classified” by the Pentagon unlike the indemnification clause that was added to ’s no bid contract to Restore Iraqi Oil (RIO) at in Southern Iraq in 2003.

In a deposition filed in U.S. District Court in Portland, Oregon in the case of the deadly exposure of  Oregon National Guardsman and others,  it was revealed that on March 18, 2003, the eve of the Iraq invasion, a KBR attorney secured a secret indemnification clause ensuring U.S. taxpayers, and not KBR, would pay for damages in the event of any death or injury which occurred during KBR’s implementation of the Restore Iraqi Oil no-bid contract in Southern Iraq, a contract worth over $2.5B.

The typical defense contractor indemnification provisions (pdf) for defense contracts, entered as Plaintiff’s exhibit #34 in the case against KBR states:

Section (e) – The Contractor shall not be reimbursed for liabilities (and expenses incidental to such liabilities)–

Section (e)(3) – That result from willful misconduct or lack of good faith on the part of any of the Contractor’s directors, officers, managers, superintendents, or other representatives who have supervision or direction of–

(i) All or substantially all of the Contractor’s business;

(ii) All or substantially all of the Contractor’s operations at any one plant or separate locations in which this contract is being performed; or

(iii) a separate and complete major industrial operation in connection with the performance of this contract.

KBR’s recently declassified indemnification provisions (pdf) for the $2.5B no-bid Restore Iraqi Oil contract in Southern Iraq are a stark contrast to the typical indemnification afforded to other defense contractors and states: Read the remainder of this entry »

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