Days after dropping suit, U.S. sues KBR over Iraq trailer costs

Mon Nov 19, 2012 3:57pm EST

Nov 19 (Reuters) - The U.S. Justice Department said Monday that it had sued KBR Inc, accusing the company and a Kuwaiti subcontractor of improperly charging the federal government for the costs of delivering and installing trailers for troops in Iraq.

The filing of the lawsuit came days after the Justice Department dropped a similar but unrelated case over KBR's costs for private armed security in Iraq.

Filed in the U.S. District Court in Rock Island, Illinois, the latest lawsuit alleged that KBR-hired subcontractor First Kuwaiti Trading Company inflated its crane, truck and driver costs and misrepresented delays on the installation of more than 2,250 trailers.

KBR provided many services to the U.S. government under a logistical support contract through subcontractors like First Kuwaiti.

First Kuwaiti's subcontract, awarded in 2003, had been for $80 million. The government said KBR later agreed to pay First Kuwaiti an extra $48.8 million after the subcontractor in 2004 submitted two claims contending government-caused delays in providing military escorts entitled it to extra money.

The lawsuit said KBR charged the government for the inflated costs despite knowing they were false.

"The facts alleged in the complaint indicate that KBR and First Kuwaiti did not provide an honest accounting," said Jim Lewis, U.S. Attorney for the Central District of Illinois.

Representatives for KBR did not immediately respond to requests for comment. A representative for First Kuwaiti did not respond to an e-mail seeking comment.

Both lawsuits were under the False Claims Act, which allows the United States to recoup funds when companies overbill the government.

The statute allows the government to sue for three times its damages and assess civil penalties of $5,500 to $11,000 per false claim.

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