KBR contract accounts for many fraud cases - Army News | News from Afghanistan & Iraq - Army Times

KBR contract accounts for many fraud cases

Pentagon auditors have referred to criminal investigators 32 cases of suspected contract fraud occurring in Iraq, Afghanistan and Kuwait since 2003, a senior Defense contract official said Monday. And the “vast majority” of those cases involve the Army’s multibillion-dollar logistics contract — known as LOGCAP — with KBR.

April Stephenson, director of the Defense Contract Audit Agency (DCAA), declined to say exactly how many suspected fraud cases concern the Logistics Civil Augmentation Program (LOGCAP) contract because they are still under investigation.

The number of suspected fraud cases tied to the logistics contract “is unprecedented,” Stephenson told the Wartime Contracting Commission. The commission is a congressionally chartered body evaluating contract support of the wars in Iraq and Afghanistan and recommending changes to avoid the levels of contracting waste, fraud and abuse experienced there in future combat operations.

Typically, one fraud case for a single contract is considered significant, Stephenson said. When DCAA auditors find a case of suspected fraud, they refer it to Pentagon’s Defense Criminal Investigative Service for further investigation.

The 32 cases referred to investigators include accusations of overbilling, false charges and bribery, she said. Many of the LOGCAP cases involve actions by KBR subcontractors, which weren’t adequately overseen by KBR, Stephenson said.

Last week, DCAA declared KBR’s financial accounting and business systems inadequate to manage the company’s subcontractors, she said.

In a written statement submitted to the commission, KBR said it records all of its costs and makes its accounting system available to DCAA for review at any time. But KBR also noted that “in the Iraq and Afghanistan theater[s], while there are numerous vendors that can provide the services needed, few, if any, have experience with the level of documentation expected by the U.S. government.”

In a statement, KBR spokeswoman Heather Browne, said the company is cooperating with government investigators.

“When KBR has discovered wrongdoing of any sort by an employee, we have swiftly reported it to the government,” she said. “KBR in no way condones or tolerates illegal or unethical behavior.”