| WASHINGTON, March 3
WASHINGTON, March 3 Lawmakers in the U.S.
Senate and House of Representatives on Wednesday questioned the
Army's continued use of KBR Inc (KBR.N) for logistics work in
Iraq in the face of confirmed reports of poor past
Representative Edolphus Towns, who heads the House
Oversight Committee, wrote to Defense Secretary Robert Gates
to question the Army's decision to award KBR a new contract
valued at up to $2.8 billion despite a wide array of problems.
Towns, citing problems with KBR's maintenance of electrical
systems at bases where U.S. troops were fatally electrocuted
and "numerous allegations of waste, fraud, and abuse," asked
Gates to provide the committee with a wide array of documents
about the KBR contract by March 17.
"It seems inconceivable to me that the Defense Department
would award this new contract to KBR in Iraq," Towns said,
citing the company's "poor past performance."
"When multiple deaths of U.S. service men and women are not
enough to preclude the award of a new contract, it makes me
wonder what it takes for a contractor to be fired."
Towns asked Gates to cooperate with a committee
investigation by providing documents about the KBR contract,
including copies of all task orders, modifications, and
performance work statements, as well as documentation about how
the company's work and past performance had been evaluated.
KBR won the new contract last week, a day after the company
told shareholders it lost about $25 million in award fees
because of flawed electrical work in Iraq.
Senator Byron Dorgan, the North Dakota Democrat who chaired
several Senate hearings on electrocutions of soldiers in Iraq
resulting from shoddy contracting work by KBR, said the Army's
past LOGCAP, or logistics, contracts had produced "the greatest
waste, fraud and abuse perhaps in the history of our country."
He said he was considering adding an amendment to the
fiscal 2011 defense appropriations bill that would force the
Army to reassess the current policy to "essentially contract
everything out instead of doing it in the service," everything
from producing food to buying towels or moving water to bases.
Dorgan, who held 20 hearings on these issues for the Senate
Democratic Policy Committee, said the Government Accountability
Office and other organizations had confirmed reports of
contaminated water, shoddy wiring that led to electrocutions
and countless incidents of wasteful spending.
"All of those things suggest to me that there's been
something fundamentally broken in the procurement process and
the contracting process," Dorgan said at a hearing on the Army
budget by the Senate defense appropriations subcommittee.
Army Secretary John McHugh said the service had taken steps
to reform its use of private contractors to provide logistics
services and increase oversight, but acknowledged that the new
contract form "may not be the perfect answer."
He agreed that the outsourcing had gone too far, and said
the Army had already brought back in house, or insourced, 900
core capabilities that have provided the Army and the taxpayers
$41 million in savings.
He said the Army had a goal to insource another 4,000
capabilities by the end of 2015.
(Reporting by Andrea Shalal-Esa; Editing by Steve Orlofsky)