An Up and Down Week for KBR

It was a good news/bad news sort of week last week for KBR.

First came the bad news: The Army announced that KBR would not be awarded $25 million in bonuses under the LOGCAP (Logistics Civil Augmentation Program) III Iraq support services contract because KBR “failed to meet a level deserving of an award fee payment for work it did during the first four months of 2008.” POGO was somewhat surprised by this given the government’s longstanding reluctance to hold KBR accountable for its missteps and abuses in Iraq, whether it concerns billions of dollars in unsupported charges or shoddy electrical work.

Nonetheless, KBR’s disappointment over losing a few million in bonuses was alleviated just days later with the announcement that it had won a contract worth billions. The Army awarded KBR the first task order in Iraq under LOGCAP IV, a cost-plus, fixed-fee award worth an estimated $2.3 billion for such services as mail delivery, ice plant maintenance and air terminal operations.

Performance under the task order is scheduled to begin today.

-- Neil Gordon

Comments

[Posted on: Mar 08, 2010 at 04:16 AM]

Nice posts.I have read many blog and this is greatest one helpful and informative for me thanks. its really interesting and i like to read it.its gave me grate knowledge.
POGO - thank you for your good work in this area. I am concerned that abuses on the LOGCAP contract have not been better investigated by the Commission on Wartime Contracting.

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adamsjacson
thanks

mls

[Posted on: Mar 05, 2010 at 10:21 AM]

POGO - thank you for your good work in this area. I am concerned that abuses on the LOGCAP contract have not been better investigated by the Commission on Wartime Contracting. A few of the Commissioners appear to be concerned such as Charles Tiefer and Clark Kent Ervin (and Linda G. before she left the Commission). But others do not seem as interested in conducting probing investigations as much as flashy visits in-theatre and ho-hum hearings. A few hearings were good such as the May hearing and two hearings in August, I suspect largely due to the number of wasteful actions by contractors, the Army and DCMA as pointed out by DCAA. Please pass these concerns on to the Commission. I am not the only one that feels that most of the Commissioners are actually more interested in protecting contractors than investigating abuses.

[Posted on: Mar 02, 2010 at 09:17 PM]

Major Timothy McGrew
Student
Command and General Staff College
FT Lee, VA

The views expressed in this blog are those of the author and do not reflect the official policy or position of the Department of the Army, Department of Defense, or the U.S. Government.

I want to say upfront that the Logistics Civil Augmentation Program (LOGCAP) provides a multitude of services and logistical support to our Soldiers and the military. Because LOGCAP is managed by humans, mistakes will be made in the administration and oversight of this contract. How many of us are perfect in the execution every task that we perform? Personally, I do not know anyone that has not made at least one mistake. LOGCAP as we know it has been around for over 20 years.

It is important to define LOGCAP. According to Army Regulation (AR) 700-137,”LOGCAP is advanced acquisition planning which provides for the use of civilian contractors during wartime and unforeseen military emergencies to augment the U.S. Army combat support capability. The contract support will be arranged through combined advance acquisition and operations planning.” LOGCAP IV has one base year and nine option years with a total potential of $5 billion per year for three of the contractors but not to exceed $150 billion over the lifetime of the contract. KBR is still competing with two (DYNCorp, Fluor) other contractors for work under LOGCAP. For instance, one of the contractors was asked to provide services in Haiti. The fourth contractor (SERCO) is not allowed to perform mission tasks. This company assists the Army by providing oversight and program management that evaluates the request for and services provided by the KBR, DYNCopr, and Fluor.

LOGCAP contractors provide services mainly to the Army but there is potential to provide support to other branches within the Department of Defense (DoD). While these services are provided for Soldiers, the contracting officer representative (COR) and Soldiers have the opportunity to provide feedback to the performance evaluation board (PEB). This feedback is submitted back to the award fee board that determines the award fee that each contractor will receive.

Throughout the history of LOGCAP people have disagreed on the amount of the award fee. The award fee amount is based on a combination of subjective and objective data. This data comes from the Soldier, contractor, COR, and performance requirements that are outlined in the contract. If Soldiers are not happy with the services that they are receiving, they should let their voices be heard. This will have a direct impact on the amount of the award fee as well as what tasks each contractor is offered in the future.

As a Soldier and taxpayer, I believe it is critical to maintain transparency in administration, funding, and payment to the contractors. The Army has learned valuable lessons concerning LOGCAP over the last 20 plus years and continues to make improvements as we move into the future. LOGCAP does provide a valuable service by allowing Soldiers to focus on critical warfightingt tasks and keeping the structure of the Army to a minimum size.

[Posted on: Mar 02, 2010 at 01:13 PM]

Mike and Ms. Sparky,

Your comments reflect the questions and concerns that POGO has had for years. Just last week the drama sounding the government's decision not withhold KBR payments was fully exposed (http://pogoblog.typepad.com/pogo/2010/02/reappearance-of-black-eyes-in-federal-contracting.html).

LOGCAP IV raised serious concern at POGO because it is managed by a contractor (Serco-North America) and now is being split geographically between KBR (Iraq), Dyncorp (southern Afghanistan), and Fluor (northern Afghanistan) (http://www.reuters.com/article/idUSN08397324). That reduces the benefits of a multiple award IDIQ that was intended to create competition on each task order.

The LOGCAP contract never ceases to amaze and will likely result in a government report highlighting waste, fraud, and/or abuse a few years down the road.

[Posted on: Mar 01, 2010 at 06:53 PM]

Does anyone else feel like we've been sucker punched by the Army? They distract is with the "no Award Fee" and then "BAM!" And then at the same the Army will want more money.

And why hasn't the MSM covered this at all? Is all this KBR stuff getting to be too predictable and mundane? Why hasn't KBR issued a Press Release? Embarrassed??

Who in the Army made this decision? I have a very special shower for them!

[Posted on: Mar 01, 2010 at 06:27 PM]

Sickening! The writing was on the wall all along. DynCorp and Fluor would get the Afghanistan task orders and KBR would get the Iraq task orders. POGO - please investigate the Army's actions on awarding the LOGCAP IV task orders. It does not appear that past performance, best value, or anything remotely sanctioned under the FAR was used to award these task orders. The Army "competed" the task orders between the three contractors and mysteriously, all three got a piece of the multi-billion dollar pie.