Kellogg Brown & Root Services, Inc.

Material Facts

• The U.S. Army awarded the LOGCAP III indefinite delivery indefinite quantity contract, which was novated to KBR on 1 August 2003.
• The contract required KBR to provide logistical support, including dining-facility services, and allowed task orders on firm-fixed-price or cost-reimbursement bases.
• The Army issued cost-plus-award-fee Task Order No. 59 for logistics and life-support services supporting Operation Iraqi Freedom, with performance extended through 30 April 2005.
• KBR awarded Gulf Catering Co. Subcontract No. SK00425 for dining-facility services at site H-3 using fixed monthly prices, labor rates, equipment prices, and headcount-based pricing.
• On 17 February 2004, the administrative contracting officer directed KBR to use a revised H-3 planning headcount of 1,422 and to adjust population-based services.
• KBR did not adjust the H-3 subcontract pricing or services to correspond with the 1,422 planning figure.
• DCAA’s 2005 reviews focused on pricing structures, subcontract terms, headcounts, and billings, and the record did not establish that DCAA then knew KBR had failed to comply with the LOTD.
• A DCAA auditor testified that DCAA first learned of KBR’s noncompliance with the LOTD in March 2007 through reports obtained from a KBR consultant.
• KBR notified the government in July 2008 that it had not considered the LOTD’s effect on the subcontract and offered a credit, but later submitted a claim seeking reimbursement of the credit.
• The contracting officer’s 22 March 2012 final decision determined that H-3 costs were unallowable and demanded payment after accounting for amounts previously withheld.

Parties

Appellant

Kellogg Brown & Root Services, Inc.

Respondent Agency

U.S. Army

Contracting Agency

U.S. Army

Contract Number

DAAA09-02-D-0007