Global Policy Forum

By Kimberly Hefling and Richard Lardner

Defense giant KBR Inc. was awarded a contract potentially worth $2.8 billion for support work in Iraq as U.S. forces continue to leave the country, military authorities said Tuesday.

KBR was notified of the award Friday, a day after the company told shareholders it lost about $25 million in award fees because of flawed electrical work in Iraq.

The company was charged with maintaining the barracks where Staff Sgt. Ryan Maseth, a 24-year-old Green Beret, was electrocuted in 2008 while showering. The company has denied wrongdoing, and investigators said in August there was "insufficient evidence to prove or disprove" that anyone was criminally culpable in Maseth's death.

The uproar over his death triggered a review of 17 other electrocution deaths in Iraq and widespread inspections and repairs of electrical work in Iraq, much of it performed by KBR.

Dan Carlson, a spokesman for the Army Sustainment Command, said the new contract is for one year, with an option for four more. KBR will handle logistics support, transportation mission, and postal operations.

KBR has long been the military's largest support contractor in Iraq, providing troops with everything from mail and laundry to housing and meals. The new award was made through a revamped contract structure intended to foster competition among companies.

"The award demonstrates that the government recognizes KBR's ability and expertise in delivering high quality service in challenging contingency environments," KBR said in a statement.

Charles Tiefer, a professor of government contracting at the University of Baltimore Law School and a vocal critic of KBR, called the award an "outrage" because of the company's record in Iraq.

"Giving KBR this contract while denying them award fees for their enormous problem of accidentally electrocuting soldiers amounts to rapping them on the knuckles on one hand while handing them a multibillion dollar deal in the other," said Tiefer, who is also a member of the independent Commission on Wartime Contracting.

Last October, the Defense Contract Audit Agency criticized KBR for having more employees in Iraq than were necessary. The excess, the agency said, was unnecessarily costing U.S. taxpayers.

KBR said it had reduced the size of its work force in Iraq consistent with guidance from U.S. military commanders. The company also fired back at the audit agency for its "heavy-handed intrusion" into the military's complex logistics process.

Carlson said Army Sustainment Command is working closely with commanders in Iraq to make sure the contractor work force is properly sized to support pullout operations in Iraq.