United States Federal Government Contracting

KBR, Inc. and Subsidiary Companies
Corporate Policy

Date: November 10, 2006
Index No.: 3-0017

Purpose:

This Policy establishes standards, including Employee training and nonconformance reporting guidelines, to ensure that the Company complies with federal regulations applicable to United States governmental contracts.

Policy:

  1. The Company will comply with all applicable regulations applicable to United States governmental contracts.

  2. All Employees involved in the performance of work under governmental contracts are to be adequately informed and sufficiently trained in the policies and practices contained in this Code of Business Conduct and other Company policies specifically relating to government contracting. Each business unit with contracts with the United States government is responsible for ensuring that Employee training regarding these policies is conducted and that such training is properly documented.

Procedure:

  1. Reporting Nonconformance.
    The Company takes appropriate, timely action to correct any violations of United States governmental standards. If an Employee has a question concerning the propriety of a transaction, the Employee must report the transaction to his or her immediate supervisor. If the supervisor finds the question to have substance, the supervisor must report the transaction to the General Counsel or his or her designee. The supervisor must advise the Employee of the action the supervisor has taken. If the Employee disagrees with the supervisor or if the Employee is not comfortable reporting the transaction to the supervisor, the Employee may contact the General Counsel or his or her designee directly.

  2. Cost and Pricing Data on Proposals.
    When cost and pricing data are required to be submitted in order to respond to a government solicitation, the cost and pricing data must be current, accurate and complete at the time of submission. All costs are to be properly recorded, documented and retained in compliance with United States federal procurement regulations. Each business unit doing business with the United States government must invoice the government in strict compliance with United States governmental cost principles and other United States federal regulations.

  3. Proprietary and Security Issues.
    Many United States governmental projects in which the Company participates may involve classified or proprietary materials or information. In these projects, the Company will comply with all United States government security regulations in order to prevent unauthorized access, distribution or use of any classified information.

  4. Employment of Former Military, United States Department of Defense or Other Federal Employees.
    The Company will comply with applicable United States federal statutes and regulations governing the employment of former United States military, Department of Defense or other federal employees. When the Company contemplates hiring a former United States governmental employee or engaging the employee as a consultant, the responsible business unit manager shall consult with the Law Department for guidance as to the proper lawful procedures that must be observed.

Approved: Board of Directors
November 10, 2006