Kellogg Brown & Root Services, Inc.

Material Facts

• The Army awarded Brown & Root Services the LOGCAP III indefinite-delivery, indefinite-quantity contract for logistical support, including dining-facility services, and later novated it to KBR.
• The Army issued cost-plus-award-fee Task Order No. 59 for logistics and life-support services supporting Operation Iraqi Freedom.
• KBR and Gulf Catering Co. executed Subcontract No. SK00425 for dining-facility services at site H-3 based on an estimated 5,400 meals per meal period.
• The February Letter of Technical Direction instructed KBR to use a 1,422-person planning figure for site H-3 and to adjust population-based services.
• KBR received the February Letter of Technical Direction and did not contemporaneously challenge its validity, authority, scope, or implementation.
• KBR did not issue a requisition directing its procurement department to use the 1,422-person figure for site H-3.
• KBR continued paying GCC for a 5,400-person population even though actual H-3 headcounts were substantially lower.
• The February and March Letters of Technical Direction did not mention subcontract pricing, and the March Letter of Technical Direction did not rescind the February directive.
• KBR did not adjust the H-3 dining-facility services or create a pricing band to accommodate the 1,422-person figure.
• KBR paid GCC a total of $33,234,684.74 in Subcontract No. SK00425 costs, and the government paid KBR for those costs.
• KBR issued a credit to the government after DCAA raised concerns about the subcontract costs and later submitted a CDA claim seeking recovery of that credit.
• DCAA audits questioned subcontract costs as unreasonable or unallowable, and the contracting officer's final decision disallowed H-3 costs based on KBR's failure to reduce the headcount as directed.

Parties

Appellant

Kellogg Brown & Root Services, Inc.

Respondent Agency

Defense Contract Management Agency

Contracting Agency

U.S. Army

Contract Number

DAAA09-02-D-0007