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Jim McElhatton – (Federal Times) – June 4, 2013 – The outcome of a court battle between the Army and KBR over the final stages of LOGCAP III, the largest government services contract in U.S. history, could affect tens of thousands of federal contracts while creating “enormous uncertainty” for vendors and the government alike, according to the Justice Department.
The warning, delivered in the footnote of a recent U.S. Court of Federal Claims pleading, marks the latest development in a dispute to decide how to close out the 12-year-old, $38 billion military logistics contract supporting military operations in Iraq.
While the Army has pushed to change the LOGCAP III pricing structure to a firm, fixed-price basis, KBR has sued to keep the closeout work under the existing cost-reimbursable arrangement. Read the remainder of this entry »
Jim McElhatton – (Federal Times) – May 5, 2013 – Army contracting officer Robert Egan gave contractor KBR Inc. a rare ultimatum: Provide a firm, fixed price on remaining work to close out the largest government services contract in U.S. history. Or else, he added, he was finished talking.
“Until I see that FFP deliverable, I cannot enter further communication exchanges with your contracts team,” Egan told the company in a Feb. 26 email.
At issue is the final stage of the Army’s $38 billion Logistics Civil Augmentation Program (LOGCAP) III, the 12-year-old logistics contract that has supported virtually all U.S. military logistics operations in Iraq. The Army seeks to revise the pricing terms on the final work to be done on the contract to be firm, fixed price instead of cost-reimbursable. In response, KBR has filed a lawsuit seeking to keep to the existing cost-reimbursable terms.
At stake in the dispute is far more than varying interpretations of contracting procedures. By its own estimates, KBR says the closeout work on the contract will cost more than $500 Read the remainder of this entry »
NEIL GORDON – (POGO) – November 26, 2012 – November has been a very bad month for defense contractor KBR.
KBR is the federal government’s primary logistics support contractor in Iraq, receiving tens of billions of dollars in business from the Department of Defense over the last decade, much of that under the U.S. Army’s monopolistic Logistics Civil Augmentation Program (LOGCAP) III contract.
In early November, an Oregon federal jury returned an $85.2 million verdict against KBR for exposing military personnel to toxic chemicals at an Iraqi water treatment facility in 2003. The jury found that KBR had “acted with reckless and outrageous indifference to a highly unreasonable risk of harm and conscious indifference to the health, safety, and welfare” of the plaintiffs. A case raising similar claims is pending in KBR’s hometown of Houston, Texas, and will soon go to trial.
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.
The war in Iraq is over and the war in Afghanistan is winding down. The United States is inching its way out of the worst recession in history. The one industry that has continued to thrive, while everyone else has held on fearing for their future, is the defense industry. During the political divisions, or maybe diversions is a more accurate term, within both the House and Senate, the lobbyists have seen to it their fat cat clients are untouchable.
Now, the gravy train is slowly coming to a stop and a sense panic appears to be descending on the corner offices of DoD contractors everywhere.
The prospect of budget cuts is having a “chilling effect” on the defense industry and companies such as Lockheed may stop hiring and training, Stevens, chairman and chief executive of the world’s largest defense contractor, said today at a conference in Washington. ~ Automatic Pentagon Cuts Must Be Stopped, Lockheed Chief Says
I am certain I’m not the first to say this, “It is about f’ing time these companies got off the taxpayer’s teat.” Read the remainder of this entry »