Report says Iraq contractor KBR hiding data from U.S.

Christmas at a KBR mess hall in Bahdad

A Halliburton subsidiary that has been subjected to numerous investigations for billions of dollars in contracts it received for work in Iraq has systematically misused federal rules to withhold basic information on its practices from American officials, a federal oversight agency said yesterday.

The contracts awarded to the company, KBR, formerly named Kellogg Brown & Root, are for housing, food, fuel and other necessities for American troops and government officials in Iraq, and for restoring that country’s crucial oil infrastructure. The contracts total about $20 billion.

The oversight agency, the Office of the Special Inspector General for Iraq Reconstruction, said KBR had refused to disclose information as basic as how many people are fed each day in its dining facilities and how many gallons of fuel are delivered to foreign embassies in Iraq, claiming that the data was proprietary, meaning it would unfairly help its business competitors.

Although KBR has been subjected to a growing number of specific investigations and paid substantial penalties, this is the first time the federal government has weighed in and accused it of systematically engaging in a practice aimed at veiling its business practices in Iraq.

The allegations come at a critical time for the company, as Halliburton is trying to spin off the subsidiary. And in July, the Army announced that it would terminate KBR’s largest contract with the government, and the company says that it will compete to regain some of that business when the government calls for new bids.

Proprietary information is protected by the so-called federal acquisition regulations, known as FAR. But the agency said KBR routinely stamped nearly all of the data it collects on its work as proprietary, impeding not only the investigations into the company’s activities but also things as simple as managerial oversight of the work.

“The use of proprietary data markings on reports and information submitted by KBR to the government is an abuse of the FAR and the procurement system,” says a memo released yesterday by the special inspector general.

As a result, the memo said, “KBR is not protecting its own data, but is in many instances inappropriately restricting the government’s use of information that KBR is required to gather for the government.”

The specific examples cited by the inspector general are taken from an $18 billion contract called the Logistics Civil Augmentation Program, informally known as Logcap, under which KBR provides food, fuel, housing, recreational facilities and laundry and other services to American troops, government officials and other contractors in Iraq.

A spokeswoman for Halliburton, Cathy Mann, did not dispute the company’s extensive use of the proprietary label but said, “KBR has included proprietary markings on the majority of its data and property in support of its government contracts for the U.S. Army for at least the last decade.”

Read the rest at the NY Times