Report: $3.7 billion KBR contract has over $160 million in errors

Above: Thanksgiving at a mess hall run by KBR in Kirkuk.

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"...

By far the largest government contractor in Iraq, KBR has been paid more than $20.1 billion through last October — about half of all government spending on contracts in Iraq, mostly under a multiyear Army contract to provide logistical support for U.S. troops. The company also has contracts to help rebuild Iraq's oil industry.

The Defense Contract Audit Agency (DCAA) has challenged nearly $2.2 billion of KBR's invoices and cost proposals. The Army has resolved nearly $1.3 billion of those questioned costs, paying KBR only $804 million, records show.

Read the rest at USA Today