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United States Sues Houston-based KBR and Kuwaiti Subcontractor for False Claims on Contracts to House American Troops in Iraq
(DoJ) – November 19, 2012 – The government’s complaint arises from the Bed Down Mission, a push to replace the tents used to house soldiers during the early days of the war with trailers, also called living containers. KBR performed many of the services required under LOGCAP III, including the Bed Down Mission, through foreign and domestic subcontractors. According to the complaint, KBR awarded a subcontract to First Kuwaiti on Oct. 16, 2003, to supply, transport and install 2,252 living containers at Camp Anaconda in Iraq for about $80 million. The government alleges that First Kuwaiti was required to complete delivery and installation of the trailers at Camp Anaconda by Dec. 15, 2003. The government further alleges that in July 2004, First Kuwaiti presented two claims to KBR contending that government-caused delays in providing military escorts for convoys into Iraq entitled the company to an increase in the contract price to cover its increased costs. According to the complaint, KBR agreed to pay First Kuwaiti an additional $48.8 million and passed that cost on to the United States.
The government’s complaint alleges that First Kuwaiti knowingly inflated its crane and truck costs, among other items, and misrepresented the cause of its delays. The complaint further alleges that KBR charged these costs to the United States knowing they were improper.
UPDATED – Click HERE to read the DoJ’s Amended Answer And Counterclaims
In the e-mail, Mr. Petsche stated that he had previously referred to the Anaconda DFAC as, “the mother of all DFAC drug deals” because of all of the irregularities surrounding it. In Mr. Petsche’s words, the Anaconda DFAC was “predestined and out of control from the start.” – Excerpt from paragraph 124
KBR Managers Allegedly Received Kickbacks from Dining Facility Subcontractor
WASHINGTON – March 16, 2011 – In response to a pending lawsuit from Kellogg Brown & Root Services Inc. (KBR) in the U.S. Court of Federal Claims, the Department of Justice has filed counterclaims alleging that KBR managers had received kickbacks from a dining facility subcontractor in violation of the False Claims Act and the Anti-Kickback Act. The subcontractor was retained in connection with KBR’s contract with the U.S. Army to provide logistical support to the military in Iraq and elsewhere. The counterclaims also allege that the kickbacks should cause KBR to forfeit its claims against the United States and to return money paid by the United States as reimbursement to KBR upon the tainted subcontract.
The counterclaims assert that, from late 2002 through 2003, Terry Hall, who was KBR’s regional food services manager for Iraq and Kuwait, and his deputy, Luther Holmes, received more than $45,000 in kickbacks from Mohammad Shabbir Khan, vice president of Tamimi Global Company. Khan provided the kickbacks to ensure that Tamimi was treated favorably by KBR. Hall and Holmes used their positions to advocate on behalf of Tamimi, and, during the time that they received the kickbacks, KBR awarded Tamimi subcontracts worth more than $400 million. Other KBR managers knew of apparent irregularities involving the Tamimi subcontracts, but approved them anyway.