I ran across this on Chris Joiner’s blog while first missing it in Thursday’s Sun Herald. Then Halliburton subsidiary KBR was blasted by the DOD Inspector General for doing poor work and squandering millions of dollars in contracts to restore military facilities impacted by Hurricanes Ivan and Katrina. Here is the Sun Herald report. Following are excerpts from the Washington Post blog entry that got the reporting rolling:
The Houston-based company’s efforts to repair Navy facilities following Hurricanes Ivan and Katrina were deemed shoddy and substandard, auditors say, prompting one technical adviser to claim that the federal government “certainly paid twice” for many KBR projects because of “design and workmanship deficiencies,” according to a report (see PDF here) released today by the Defense Department’s inspector general.
The report, released following a Freedom of Information Act request, says the U.S. Navy hired KBR, Inc., then known as Kellogg, Brown and Root, in July 2004 to repair Defense Department facilities after Hurricanes Ivan and Katrina. The federal government agreed to pay the company $500 million over five years.
At the time, the company was a subsidiary of Halliburton, the Texas oil company, whose former chief executive is Vice President Dick Cheney.
As part of the Navy project, KBR was tasked with removing water-damaged carpet and drywall; applying temporary roofing; removing debris; and building trailer parks for displaced Navy families at the Naval air stations in Pensacola, Fla.; Gulfport, Miss.; the Stennis Space Center in Hancock County, Miss.; and other Navy facilities in the Gulf Coast region.
Among the inspector general’s findings:
— KBR awarded sole-source or limited competition subcontracts that overpaid hourly rates to roofers and paid $4.1 million worth of services and meals that should have cost only $1.7 million
— The Navy entered into an illegal “cost-plus-percentage-of-cost” contract with KBR, the audit found. As a result, higher costs meant higher profit and KBR was rewarded for “inefficiency and non-economical performance.”
— KBR was paid nearly all of the contract amounts despite “marginal-to-average performance,” the audit found.
The audit recommended the Navy try to recoup about $8.4 million in “excessive” equipment lease payments and material profits and noted several over-the-top costs, including employees getting $540 per month for cell phone charges during roof repairs; $720 per month in gas charges despite existing payment of work site fuel expenses; and expensive meals, including steak and eggs (full meal prices were redacted from the report).
Investigators also found that as part of the recovery effort, KBR was hired to build trailer parks for Navy personnel displaced by Hurricane Katrina. Each trailer was supposed to have 200 amps of electricity and water piping.
But the subcontractors hired by KBR gave each trailer 100-amp outlets and failed to lay piping at proper building code levels. As a result, a second contractor was paid $200,000 to fix the problems in the KBR construction, the audit said.
It appears Dr Ben Marble of Gulfport was ahead of his time when he chatted with Vice President Cheney in Gulfport back in September 2005.