Ethics: US government sues defence contractor over alleged false claims

The action, filed in U.S. District Court in Washington, alleges that KBR knowingly included non-allowable costs for private armed security in billings to the Army under the Logistics Civil Augmentation Programme (LOGCAP) III contract. The LOGCAP III contract provides for civilian contractor logistical support, such as food services, transport, laundry, and mail, for military operations in Iraq.

The government’s lawsuit alleges that some 33 KBR subcontractors, as well as the company itself, used private armed security at various times during the 2003-2006 time period. KBR allegedly broke the LOGCAP III contract by failing to obtain Army authorisation for arming subcontractors and by allowing the use of private security contractors who were not registered with the Iraqi Ministry of the Interior.

The subcontractors using private security are alleged to have also broken subcontract terms requiring travel only in military convoys. The government’s lawsuit further alleges that at the time, KBR managers considered the use of private security unacceptable and were concerned that the Army would disallow any costs for such services. KBR nonetheless charged the United States for the costs of the unauthorised services.

“Defence contractors cannot ignore their contractual obligations to the military and pass along improper charges to the United States,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We are committed to ensuring that the Department of Defence’s rules are enforced and that funds so vital to the war effort are not misused.”

This case is being brought as part of a National Procurement Fraud Initiative.

KBR denies the claims.