Kellogg Brown & Root Services, Inc.

Material Facts

• The LOGCAP Support Contract was awarded to KBR, then known as Brown & Root Services, on 14 December 2001.
• The contract required KBR to provide workers' compensation insurance for its employees and to flow down that requirement to subcontractors.
• KBR provided DBA insurance for subcontractors because insurance might not be easily accessible in the areas where the contract work was performed.
• Subcontractor DBA premiums were based on estimated payroll, and KBR did not reimburse itself through subcontractor billings for those premiums.
• KBR's FY 2007 incurred cost proposal included subcontractor DBA insurance premiums.
• DCAA's audit stated that KBR did not true up subcontractor DBA insurance costs based on actual subcontractor labor and questioned the costs using a 43 percent decrement.
• The audit also stated that DCAA verified invoices, installment payments, competitive quotes, and valid insurance policies, and that the premium was reasonable.
• The ACO's final decision stated that the billed cost was not based on actual subcontractor labor incurred during FY 2007.
• The final decision referenced and relied upon the DCAA audit report and KBR's response.

Parties

Appellant

Kellogg Brown & Root Services, Inc.

Respondent Agency

Defense Contract Management Agency

Contract Number

DAAA09-02-D-0007