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Tuesday, July 17, 2007

Largest Iraq contract rife with errors (KBR bills $110m for services on shut down bases)

Largest Iraq contract rife with errors
By Matt Kelley, USA TODAY
Government auditors discovered something odd last year when they reviewed KBR Inc.'s annual cost estimate to provide support services for U.S. troops in Iraq. The contractor proposed charging $110 million for housing, food, water, laundry and other services on bases that had been shut down.
KBR got a contract extension for $3.7 billion, but it agreed to drop the proposed $110 million spending on closed bases and an additional $50 million of duplicate charges and math errors, according to Defense Department records obtained by USA TODAY under the Freedom of Information Act.
Linda Theis of the Army Sustainment Command, the agency that oversees KBR's troop-support contract, downplayed the errors. They amount to just 4.3% of the contract amount, she said. "This percentage does not indicate a systemic weakness in business systems."
The errors occurred because KBR developed the proposal under a tight schedule, said company spokeswoman Heather Browne. The contract-review process, she said, worked as intended.
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