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Risk Safety, Have Govt Contract Fees Reduced

Tish Kraft – (Courthouse News) – WASHINGTON – February 28, 2012 –  The Department of Defense may reduce or deny award fees to government contractors found to jeopardize the health or safety of government personnel, under an interim rule now adopted as final.

This rule also modifies the requirement that information on the final determination of award fee be entered into the Federal Awardee Performance and Integrity Information System.

Specifically, the DoD employee must: “Include in the evaluation criteria of any award-fee plan, a review of contractor and subcontractor actions that jeopardized the health or safety of government personnel, through gross negligence or reckless disregard for the safety of such personnel, as determined through-(1) Conviction in a criminal proceeding, or finding of fault and liability in a civil or administrative proceeding …; or (2) If a contractor or a subcontractor at any tier is not subject to the jurisdiction of the U.S. courts, a final determination of contractor or subcontractor fault resulting from a DoD investigation.”

Also: “In evaluating the contractor’s performance under a contract that includes the [reduction or denial clause], the contracting officer shall consider reducing or denying award fees for a period if contractor or subcontractor actions cause serious bodily injury or death of civilian or military government personnel during such period. The contracting officer’s evaluation also shall consider recovering all or part of award fees previously paid for such period. (Click HERE for original article)  (Click HERE this regulation and others)

Myths, Misconduct and other news

We must work harder to debunk the myths and misconceptions that condone and even promote victim blaming and allow perpetrators to act with impunity.   Rape is never invited because of what a victim was wearing or how much she had to drink. ~ Department of Justice (Justice Blog) ~  It Is Time: Get Involved during Sexual Assault Awareness Month 

Federal Defense Agency Granted Contracts To Company With Ties To Director
The Defense Advanced Research Projects Agency has awarded contracts worth $1.8 million over the last two years to RedXDefense, a firm co-owned by DARPA Director Regina Dugan.  The agency says there has been ‘no credible evidence of misconduct.’
Ken Dilanian, Washington Bureau – (Los Angeles Times) – Reporting from Washington – April 3, 2011 -The Defense Advanced Research Projects Agency has awarded contracts worth $1.8 million over the last two years to a company co-owned by its director and run by her father.

The awards were legal and proper, the agency says, because Director Regina Dugan recused herself from any role in DARPA’s dealings with the small defense technology firm. Nonetheless, ethics experts said the arrangement raises questions about whether her subordinates could be expected to treat her firm like any other.

Senior Pentagon officials and top generals are required to sell their holdings in defense contractors before taking office, but officials said that rule does not apply to the lower-level director of DARPA, the Defense Department’s cutting-edge research agency.

“I reviewed the contract and agreement at issue and have discussed the matter with DARPA personnel. I found no credible evidence of misconduct by the director with regard to RedXDefense contracts since 2009,” said Crane Lopes, DARPA’s general counsel, who works for Dugan. (Click HERE for article)

The woman who chased down sex traffickers
Anne Grant – (Providence Journal) – April 3, 2011 – Special to the Journal – Do not be fooled by the Hollywood-inspired cover — a United Nations folder clipped with a photo of a curvaceous silhouette looking over her shoulder as she frantically dashes through a tunnel.

Read the remainder of this entry »

DoD says KBR failed to perform at a level deserving an award fee

Ryan Maseth, a 24-year-old Green Beret, was electrocuted and died in a shower at his base in Iraq on January 2, 2008.

KBR Loses $24.1 Million Fee Over Green Beret’s Death

By David Voreacos and Tony Capaccio -B loomberg – Aug 19, 2010

KBR Inc., the largest contractor in Iraq, must defend a wrongful-death lawsuit by the parents of a Green Beret who was electrocuted while showering in a building that the company maintained, a federal appeals court ruled.

KBR, based in Houston, asked the U.S. Third Circuit Court of Appeals to dismiss a case over the accidental death on Jan. 2, 2008, of Staff Sergeant Ryan Maseth. The Pentagon inspector general reported last year that KBR was partly to blame because the shower’s electrical pump wasn’t properly installed.

KBR’s appeal, after a judge declined to dismiss in March 2009, raises “interesting and important questions” about whether it invokes political issues that shouldn’t go before a judge, and whether KBR is immune from suit under a “combatant activities” exception, the court said.

“We do not reach these questions now, however, because they are not properly before us,” a panel of the Philadelphia- based court said Aug. 17. “We must dismiss this premature appeal for lack of jurisdiction.”

The panel sent the case back to U.S. District Judge Nora Fisher in Pittsburgh for more pretrial gathering of evidence. The appeal was premature because Fisher did not “conclusively determine” whether KBR could cite the political-question doctrine or combatant activities exception, the panel ruled.

A KBR spokeswoman, Heather Browne, said the company disagrees with the ruling. It was not responsible for Maseth’s death and will defend the case, she said.

Important Questions

“The court recognized that this case raises important questions of law, but ruled the appeal was premature,” Browne said in an e-mail. “The court found only that it lacked jurisdiction to hear the merits of KBR’s arguments at this time.”

Maseth, of Shaler, Pennsylvania, a member of the 5th Special Forces Group, was in his second tour of duty in Iraq. He died of cardiac arrest caused by electric shock, according to the complaint by his mother, Cheryl Harris, and his father, Douglas Maseth.

They allege that the electrical problems at the building where Maseth died were well-known, that KBR negligently failed to repair them, and that the negligence caused his death.

Maseth died in a shower at the Radwaniyah Palace Complex in Iraq in part because the pump wasn’t properly grounded when installed less than two years earlier, according to the inspector general’s report. The report examined the electrocution of 18 U.S. soldiers and contractors in Iraq.

‘Catastrophic Result’

The inspector general criticized the Army’s oversight of Maseth’s compound, saying his death “was the catastrophic result of the failure of multiple systems exposing U.S. personnel to unnecessary risk.”

KBR, Army commanders, and Army contracting command that provided oversight were “responsible for the use and physical condition” of the facility, it said.

Starting in February 2006, “KBR did not ground equipment during installation or report improperly grounded equipment identified during routine maintenance” at the facility, according to the report.

KBR installed the pump on the roof that contributed to the electrocution of Maseth, said the report.

“The pump that failed leading to the electrocution was not grounded during installation,” it said. “Safe and proper installation required grounding.”

In February, the Army’s Rock Island Contracting Center informed KBR it was being docked all potential fees of $24.1 million for January through April 2008.

‘Failures to Perform’

An Army contracting official, James Loehrl, told KBR in a letter the action followed “failures to perform at a level deserving” of a fee.

The deficiencies included “KBR’s failure to document the poor conditions of the electrical systems” at the complex, its “failure to provide notice of unsafe life, health and safety conditions and KBR’s failure to employ qualified personnel to provide electrical services.”

In a March 9 rebuttal, KBR Vice President Douglas Horn disputed Loehrl’s claims as “contrary to fact and conflict with findings previously made by multiple government entities.”

Horn disputed what he called the implication that KBR bore responsibility for the deaths of Maseth and others.

“There is no evidence this is true,” Horn said. “The Army knew that buildings” in the complex and elsewhere “had deficient electrical systems” and “the Army chose to house individuals in these buildings” or “not to authorize rewiring or other upgrade work.”

The company is “exploring options and remedies” for recovering the $24.1 million from the Army, Horn wrote in a response to the letter denying the fees.

The case is Harris v. Kellogg Brown & Root Services Inc., 08-cv-563, U.S. District Court, Western District of Pennsylvania (Pittsburgh). (click HERE for the original article)

KBR loses $84.7M in Award Fees for LOGCAP III in Iraq

Is this "no award fee" the equivalent of a good old fashioned DoD spanking?

Below is a recent article from Bloomberg Business Week. It’s obvious KBR is trying to spin this pathetic award fee into something positive for their shareholders. The fact of the matter is, of the $123.8M available for award fee for the 7 quarters listed below, including the first quarter of 2008 when SSG Ryan Maseth was killed, KBR actually lost $84.7M in available awards. Of the $123.8M available for those quarters, KBR was awarded $39.1M a mere 32% of what was available. KBR has enjoyed unchallenged award fees in the 90% of total fee available for years. That doesn’t really sound like a job well done to me!

KBR profits are based on award fees. Although the Army just awarded them a $568M contract for LOGCAP IV (for whatever reason), no award fee means NO PROFIT for KBR! ~ Ms Sparky

KBR Loses $24.1 Million Bonus Over Green Beret’s Death in Iraq
June 09, 2010, 10:22 AM EDT

By Tony Capaccio

June 9 (Bloomberg) — KBR Inc., the largest contractor in Iraq, lost all of its potential bonus — $24.1 million — for the first four months of 2008 because it was found partly to blame for the accidental electrocution of a Green Beret.

This is the first time KBR lost its entire performance fee since the company won the contract in 2001 to support U.S. troops, Army Contracting Command spokesman Daniel Carlson said.

Houston-based KBR has received orders from this contract totaling $35.7 billion to date. Its profit comes from a base fee of 1 percent and periodic bonuses based on criteria such as quality of work and its control over cost and schedule.

Staff Sergeant Ryan Maseth of the 5th Special Forces Group was electrocuted while showering on Jan. 2, 2008, in part because the shower’s electrical pump wasn’t properly grounded when installed less than two years before, the Pentagon inspector general reported on July 27, 2009.

The report criticized the Army’s oversight of Maseth’s compound, saying his death “was the catastrophic result of the failure of multiple systems exposing U.S. personnel to unnecessary risk.”

Army commanders, the Army contracting command and KBR were all “responsible for the use and physical condition” of the compound, the report said.

“KBR did not ground equipment during installation or report improperly grounded equipment identified during routine maintenance” at the facility starting in February 2006, thereby “perpetuating electrical hazards,” the report found.

Accidental Death

The death was ruled accidental and KBR wasn’t found criminally negligent. Maseth’s mother, Cheryl A. Harris, in March 2008 filed a wrongful death suit against KBR. A federal judge last year denied a KBR dismissal motion. The case is pending in the 3rd U.S. Circuit Court of Appeals in Philadelphia.

The Army’s decision to deny KBR’s bonus followed a Jan. 7 report from its audit agency, which conducted its own investigation as well as reviewing the Pentagon inspector general’s report and the findings of an Army Criminal Investigation Command probe.

The $24.1 million wasn’t rolled into the subsequent award- fee period so KBR can’t earn it back, Carlson said in an e-mail.

KBR spokeswoman Gabriela Segura said the company was notified Feb. 19 that the fee wouldn’t be paid but hasn’t seen the Army audit “so it would be inappropriate to comment” at this time.

“We requested access to all information used so that we are better able to understand” the decision and “to determine whether there are additional actions that we might take,” she said.

KBR’s performance improved enough in the subsequent bonus periods from May 2008 through August 2009 for the Army to pay it $39.1 million of the $99.7 million available, or about 40 percent, according to the contracting command.

The Army announced May 6 that KBR received a new order worth as much as $568 million to continue to provide services in Iraq such as housing, meals, laundry, showers, water purification and bathroom cleaning. (Click HERE for  original article)

DoD doles out taxpayer’s dough

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)