Editorial Response to 'Iraq Contractor Boosts Staff as Troops Withdraw' - Battlecreek Inquirer - November 2009

The November 4 editorial 'Iraq Contractor Boosts Staff as Troops Withdraw' is inaccurate and KBR would like to set the record straight.

First, it is incorrect to say that KBR will face fines or penalties of nearly $200 million if the company does not trim its workforce. The LOGCAP III contract does not contain a provision for assessing any such fines and no such statement has been made to KBR by DCAA or any other regulatory agency. Instead, the recent audit on which the Associated Press article is written, states that should KBR reduce its workforce by 2,857 people by January 1, 2010, the cost-savings would be approximately $193 million. This statement is simply an estimate computed by DCAA in an 'efficiency audit'.

DCAA states KBR has no plan for withdrawal from Iraq. To the contrary, KBR has explained its plan to the auditors, which includes a process to close camps as military personnel are withdrawn and to identify appropriate reductions to the contract price based on this plan. In fact, while the military has closed over 185 camps so far this year, only 7 of those camps had a permanent KBR presence under the LOGCAP contract where KBR provided service. Further, to date, KBR has reduced its workforce by 2,622 workers which is about a 14% reduction in staffing levels. KBR continues to actively pursue opportunities to effectively reduce costs associated with supporting the military.

The broader issue, however that seems to be overlooked is the illogical theory that a contractor supporting the military, should have a concrete plan about how, when and where to withdraw its troops prior to the military formalizing their plan. KBR works to support the U.S. military and as such that work will continue relative to planning for a troop drawdown. Further, it is simply not appropriate for KBR, a contractor, to make decisions on troop withdrawal planning that could cause serious, negative results in a war zone.

KBR remains disappointed in the DCAA's heavy-handed intrusion in the logistics process. More importantly, DCAA does not hold the authority to fine or penalize KBR for its work.

The continued unfounded and punitive assertions regarding KBR's work by DCAA and other agencies is a great disservice to our men and women who work tirelessly each day in Iraq at great sacrifice to themselves and their families. KBR remains proud of the work and support it provides to the troops. We remain committed to engaging in a transparent, fact-based dialogue and in turn, we expect and believe that we, as well as the public, deserve the same commitment from those in the media.

Sincerely,

William C. Bodie, KBR North American Government & Defense