KBR Bills $5 Million For Mechanics Who Work 43 Minutes a Month
And as more GIs come home, the waste could get even worse.
| Thu Mar. 25, 2010 4:30 AM PDT
It was just a single contract for a single job on a single base in
The $4.6 million blown on this particular contract is a relatively small loss considering that in 2009 alone, the government had a blanket deal worth $5 billion  with KBR (formerly known as the Halliburton  subsidiary Kellogg Brown & Root). Just days before the Pentagon released the Balad report, KBR announced  it had won a new $2.3 billion-plus, five-year
On March 29, the bipartisan Commission on Wartime Contracting —which Congress set up in early 2007 to investigate waste and corruption in the military private sector—will hold a hearing to examine whether contractors are doing their part to prepare for leaving
The Balad report is likely to be a hot potato at the hearing. Commissioner Charles Tiefer  tells Mother Jones the report is a "dynamite critique" of the firm's practices. "The numbers translate into an astonishingly large pool of KBR employees standing around idle and having the government be charged," he says.
What the DOD investigators found in Balad was astounding. Army rules require that its civilian maintenance employees are actively working 85 to 90 percent of the time they are on the clock. Yet KBR's own records showed that its workers were only engaged in labor an average of 6.6 percent of the time they were on duty. The DOD ran its own numbers, and its findings were even worse. In September 2008, for example, KBR had 144 maintenance employees at Balad, available to work 16,200 hours. Their actual "utilization rate" was a paltry 0.63 percent—which means that each of the 144 KBR employees averaged about 43 minutes of work for the entire month.
How did such a large bunch of thumb-twiddling mechanics go unnoticed? The Pentagon investigators found that the Army had no system in place to police how much work its contractors were actually doing. Plus, the unit in charge of KBR's operation at Balad reported that the contractor wouldn't reveal how many mechanics it employed there "because it believed the information was proprietary." The investigators (who eventually got the KBR data) note that as of last August, the number of KBR mechanics at Balad has since dropped to 75, but they conclude diplomatically that "opportunities for additional reductions of tactical vehicle field maintenance services at [Balad] may exist, which may provide additional cost savings to DOD." In other words, the Army should consider sending even more contractors home.
Some in the military appear to accept such waste as a matter of course. Col. Gust Pagonis, an assistant chief of staff for the 13th Expeditionary Sustainment Command, which took over command of Balad last August, responded to the DOD inspector general by explaining that "the contracting of maintenance capabilities, though not efficient, was effective in ensuring units did not experience low readiness rates and being able to perform the mission." Translation: The KBR contractors were essentially being kept around on reserve, just in case. Tiefer doesn't buy that argument. "That might justify a limited overcapacity, but nothing approaching KBR's levels," he says.
As the military draws down its own numbers in
She added that the $193 million estimate was "conservative"; if KBR fails to meet its withdrawal goals, the price tag could balloon by hundreds of millions more. "The drawdown in
KBR rejects those assertions. The company has "been working since last year with these organizations in responsibly planning our support to the drawdown of military forces in
Federal bean counters are concerned with more than just KBR's inflated contracts. In fiscal 2009 alone, the DCAA identified $20.4 billion in questionable billing , and another $12.1 billion in unsupported cost estimates, by contractors in
In October, the Pentagon transferred Stephenson  to its payroll department. That move came after the Government Accountability Office complained  about auditing irregularities on Stephenson's watch. GAO even alleged that some DCAA reports had been modified to favor contractors—which suggests that the companies' waste in
The DOD's inertia on contractor accountability is so complete that its agencies can't say with any certainty how many contractors are currently in
But KBR will be in the hot seat at next week's hearing—and on the heels of the Balad report, that seat's now likely to be a lot hotter. "We're hoping to find out at this hearing how much progress KBR has made toward a viable drawdown plan with realistic assumptions," Tiefer says, adding: "I'm personally hoping to receive suggestions for how to reform monopoly cost-plus contracts like KBR's." Company spokeswoman Browne says KBR is ready to state its case, and is in the process of drafting a response to the inspector general's report.
For now, however, it's hard to see what the commission or the federal government can do to derail the KBR gravy train. Bases across
 http://www.wartimecontracting.gov/images/download/documents/hearings/20090811/Transcript - August 11 2009 Business Systems Hearing.pdf
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