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David Isenberg: Tamimi 1, KBR 0

by David Isenberg on December 30, 2010

I couldn’t let 2010 end without having one last look at one of the major U.S.-based PMCs; the one which, according to one leading PMC trade association, plays a significant role in keeping U.S. troops the best supported military operation in human history. In case you couldn’t guess that would be KBR. Today’s news informs us that a KBR subcontractor, Tamimi Global Co., based in Saudi Arabia, has won a $35 million arbitration award in London against KBR for work it says it did in Iraq. Tamimi provided dining and food services for U.S. troops. The company claims KBR withheld payments starting in 2008 because the US government withheld payments to KBR after an audit of an earlier contract. Tamimi continued to operate through 2009, when its contracts with KBR ended. You can find the relevant legal documents on the ever watchful site of Ms. Sparky at:: Petition to Confirm Foreign Arbitration Award Work Release Change Order Final Award Order on Tamimi Global Company Limited’s Petition to Confirm Foreign Arbitration Award and Final Judgment The background is a bit complicated, so read the procedural history in the Final Award document if you are interested. But basically it comes down to the fact that in 2006 the U.S. government audited certain costs submitted by KBR to the U.S. government for which the government had reimbursed KBR, to determine if the costs claimed by KBR were reasonable.. The Defense Contract Audit Agency issued a report that determined that KBR’s costs resulting from Tamimi invoices from July through December 2004 were unreasonably high and thus KBR breached it fiduciary responsibility to the U.S. government. KBR notified Tamimi that the government was withholding about $41 million from KBR and, in turn, KBR would withhold about $35 million from Tamimi. Note that KBR did not assert Tamimi did anything wrong. It simply says that if the U.S. government does not pay it then it has no obligation to pay its subcontractors. This is known as the Pay-When-Paid clause. Specifically: “Notwithstanding any other provision hereof, payment by [Government] to [KBR] is a condition precedent to any obligation of [KBR] to make payment hereunder; [KBR] shall have no obligation to make payment to [Tamimi] for any portion of sublet work for which [KBR] has not received payment from the [Government].” Obviously, judging by the decision the arbitrators did not agree with KBR. But the important point I take away from this is that the relationship between a prime contractor and its subcontractors, is often, to quote Winston Churchill, “a riddle, wrapped in a mystery, inside an enigma.”

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David Isenberg: Tamimi 1, KBR 0

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David Isenberg: KBR to Contractors: Yours Is Not Question Why, Yours is But to Do or Die

by David Isenberg on November 11, 2010

It is once again time to look at KBR’s legal battles. Today we take a look at the case of Reggie Lane in the Fisher, Lane v. Halliburton, KBR litigation . You can find relevant documents at the website of Fibich, Hampton & Leebron, L.L.P, which is one of the law firms representing Mr. Lane. See here . This is a case which has been cited in many other law suits, mainly because the courts have seen fit not to dismiss the suit, thus weakening the traditional contractor defense, i.e., the “political questions” doctrine. That doctrine excludes from judicial review those controversies which revolve around policy choices and value determinations constitutionally committed for resolution to the halls of Congress or the confines of the executive branch.” That has traditionally been taken to mean that issues stemming from the battlefield are supposedly outside the court’s jurisdiction. But in recent times courts have decided it is within their mandate. KBR lost several pretrial attempts to dispose of the Fisher, Lane v. Halliburton case (the most recent in March 2010). Rather than go to trial, KBR has appealed all of its rejected defenses to the Fifth Circuit. According to Joe Melugin, an attorney at Fibich, Hampton & Leebron, who has worked closely with lead counsel T. Scott Allen, Jr., of Houston, Texas, the brief was filed with the Fifth Circuit on Oct. 27, 2010. On November 9 the Court made its redacted version publicly available. What follows are some excerpts from the brief. According to Melugin, “The attached brief and record excerpts bring together (perhaps better than any previously filed publicly available documents) the facts, evidence and testimony which clearly show that KBR and its managers were fully aware that they were sending our clients to their deaths and they did it anyway.” As this is a pretrial appeal, many facts are in dispute. However, two vital facts are no longer disputed: (1) KBR had the unilateral authority to stop its drivers from participating in convoys and was not subject to the once-alleged “plenary control” of the military, 1 and (2) KBR managers unanimously expected April 9, 2004 to be the single worst day of attacks on civilian convoy drivers. KBR claimed to be subject to the Army’s plenary control. However, Judge Miller determined the evidence proves otherwise. R 2185 (“[KBR] argue[s] that they were under the plenary control of the Army, that the convoys went out according to strict protocols, and that they did not have the authority to refuse to send a convoy. However, this argument finds support in neither the terms of the LOGCAP contract itself, nor the practice of the parties at the time.”). KBR even conceded this fact in the final hearing prior to Judge Miller’s February 8, 2010 order. R 2161. This concession marked a departure from KBR’s previous claims to this Court. Lane v. Halliburton, 529 F.3d 548, 561 n.5 (5th Cir. 2008). Given the following material it is understandable why KBR tried so hard to keep this brief under seal. Reading it one can only think of the phrase “depraved indifference” when reading how KBR exposed its drivers to fatal danger. Once upon a time it appears that KBR actually took seriously keeping its contractors safe. KBR assembles a team of Security Professionals In 2003, George Seagle became KBR’s top Security person in the mideast. Seagle led KBR’s _____ All Security personnel would report to Seagle, who reported to Chief Operating Officer Tom Crum. Seagle and his Security Department warned the company of the deadly consequences of sending the truck drivers out on the road the day they died. LOGCAP Operations came under the authority of KBR’s Program General Manager (“PGM”). The 2003 PGM, John Downey, took safety seriously. He authorized every employee in the company to call a halt to any activity that the employee believed to be unsafe: The LOGCAP Safety Philosophy is simple . . . There is not one thing that we do that is worth injury to an employee. Each of you has my personal authority to stop any activity, which you believe to be unsafe. This memo became company dogma. KBR provided copies and read it to all orientation attendees. However, in February 2004, KBR replaced John Downey as Program General Manager with recently retired Army General Craig Peterson. Although Peterson paid lip service to the safety philosophy ,under his authority KBR practiced an irreconcilably different philosophy: “if the military pushes we push.” Indeed, KBR pushed very hard. Early April 2004 saw the worst fighting since the invasion. On April 1, KBR’s COO ordered Craig Peterson to heed the views of the Security Department: But Peterson and his subordinate Keith Richard had different ideas. On April 2, Security’s Rex Williams issued a “Threat Update Document.” It noted more sophisticated attacks on convoys and an expected surge of violence for the coming weekend: Good Friday (April 9) through Easter Sunday. It included a map and two KBR security calendars. One calendar highlighted (in red) that April 9, 2004 marked the first anniversary of the American liberation/occupation of Baghdad and warned of for April 9. The other calendar highlighted Easter weekend as coinciding with Arabeen, a Shia holy period. On April 4, Security’s Ray Simpson wrote to Peterson’s underling Keith Richard (and others) to propose “holding back on moving convoys,” while passing along the concerns of another security coordinator, who described coordinated attacks in Baghdad. Richard copied Peterson to the discussion and sought advice from security manager John Stewart. Stewart replied to all, “Right now our vehicles don’t need to be out there.” Meanwhile, Rex Williams reported that attacks in the Baghdad area for the week ending April 3 had climbed by 50% over the previous week. On April 5, Security tried to stop all drivers from going out. Security’s Ray Simpson ordered that there would be “no convoy movement,” based on the direction of KBR TTM Security Director Joe Brown. But Keith Richard vetoed Security’s order: “This is not a decision Joe or I can make. Only Craig Peterson or Ray Rodon can make this decision.” Brown (with added support from the LOGCAP Security Manager) re-urged his warning, “It is not safe enough for us to move.” But Richard spat back that he – not Security – was in charge: Additionally, Iraq Security Manager John Jones highlighted earlier warnings to Peterson and Richard regarding April 9 before advising, “On the 9th and 10th there will be no travel.” By Wednesday, April 7, it seemed Security was being completely ignored. Regardless, Security’s Joe Brown continued to reiterate the warnings about April 9 and 10. Meanwhile, Keith Richard exchanged emails with a friend back home. Responding to a question about his location, and showing his state of mind, Richard wrote: In the damn war zone. One of my convoy’s was hit with 14 mortars, 6 RPG’s, 5 IED’s and small arms fire. It was a basic ambush. Amazingly no one was injured or killed. Richard announced he was having a hard time “consciously sending [drivers] out in the line of fire.” But Richard followed instructions and “[he had] been given instructions to keep pushing.” Meanwhile, Peterson prepared his superiors: “The rest of this week and next week will be very difficult as there is a national holiday and a regional pilgrimage combined.” Skipping ahead to April 9, 2004, after numerous attacks against KBR convoys had occurred, we have this: By 10:05 a.m., word spread about the attack on Reedel’s convoy. Joe Daniel reported to Keith Richard that Reedel would secure at BIAP and KBR’s 10:00 a.m. Situation Report shows Hamill convoy _________ A 10:28 email reports three convoys under attack near the Tampa/Sword junction. Twelve minutes later, KBR announced that the military has designated Tampa as “red” status. Attached to this announcement is KBR’s 10:30 Situation Report. The Report shows three convoys (Teddy, Tomaszewski, and Watson) currently under attack in the BIAP area with a fourth (Reedel) having driven through the same combat only minutes earlier, while a fifth (Larvenz) was diverted from Sword to BIAP ____. This report shows the Hamill convoy at Anaconda, still staging, i.e., preparing to leave. Satellite images verify KBR’s situation reports. The Hamill convoy began the day at 7:00 a.m., staging within Anaconda. Between 7:38 and 9:51 a.m., Hamill moved no more than 200 meters, all within Anaconda. By the time Hamill reported his departure at 10:45 a.m., KBR knew at least this: (1) Henderson convoy was attacked between Anaconda and BIAP. (2) Reedel convoy was attacked in the BIAP area. (3) Reedel lost his truck, along with at least six others, in the attack. (4) At least eight drivers were missing from the Reedel convoy. (5) Drivers were injured in the Reedel attack. (6) Teddy, Watson, and Tomaszewski convoys are currently under attack in the BIAP area. (7) Larvenz convoy was attacked on Sword and diverted into BIAP for safety. (8) Daryl Watson convoy was attacked leaving BIAP. (9) Reed convoy reported heavy fire between Abu Ghraib prison and BIAP. (10) The military has designated Tampa as “red.” Despite this knowledge KBR directed Hamill to lead a convoy of unarmed American civilians–men not allowed to wear camouflage–driving Army green camouflaged fuel tankers into combat. Moreover, as Hamill testified, for all he knew: It was just a normal day like any other day … No one from KBR or Halliburton had told me anything that would make me think it wasn’t a normal day like any other.

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David Isenberg: KBR to Contractors: Yours Is Not Question Why, Yours is But to Do or Die

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KBR awarded design build contract for Papua New Guinea apartment

October 14, 2010

KBR awarded design build contract for Papua New Guinea apartment

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KBR awarded contract for construction of iron ore mine in Australia

September 16, 2010

KBR awarded contract for construction of iron ore mine in Australia

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KBR, Alliance Partners to build advanced wastewater treatment plant

July 21, 2010

KBR, Alliance Partners to build advanced wastewater treatment plant

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Ayo Adeyeye: PolitiFact’s Truth-O-Meter in Need of Tune-Up

July 8, 2010

Last month, Arianna Huffington, HuffPost Editor-in-Chief, appeared on ABC’s This Week on a panel with Liz Cheney, a former Bush Administration official. In an exchange over the BP oil disaster in the Gulf, Huffington accused Halliburton, the behemoth oil company who’s one-time CEO was Ms. Cheney’s father and former Vice President, Dick Cheney, of “defraud[ing] the American taxpayer hundreds of millions of dollars.” In characteristically caustic Liz Cheney style, Cheney objected to the charge by questioning Huffington’s citizenship as a resident of Planet Earth. PolitiFact, a fact-checking website and project of the St. Petersburg Times whose site proclaims a mission to “help you find the truth in politics” joined the debate and labeled Huffington’s claim ” Half True ” on its six-pronged “Truth-O-Meter,” denoting that “the statement is accurate but leaves out important details or takes things out of context.” While PolitiFact concedes that all evidence suggests that Halliburton wasted hundreds of millions of taxpayer dollars, whether the waste amounts to fraud “is still being examined,” they report. Let’s see if we can’t speed up that examination. In November 2003, just less than one year after the start of the War in Iraq, Newsweek ran an article entitled ” The $87 Billion Money Pit ,” reporting numerous allegations of “overspending, favoritism and corruption” against Halliburton and other US contractors engaging in Iraq reconstruction. In the article, Halliburton was accused of gouging prices on imported fuel to the tune of $300 million. Citing the Newsweek piece in her opening statement at a Senate Democratic Policy Committee (DPC) hearing that same month, then-Senator Hillary Clinton (D-NY) touted the need for transparency and greater oversight in Iraq reconstruction contracting, saying “we need to assure the American people that their money is being spent wisely, assure the Iraqi people that it is being spent in their interest and assure the world that it is not being spent for profiteering by American companies.” Since the start of the Iraq War, the DPC, a Senate Leadership Committee established by law in 1947 concurrently with a Republican Policy Committee, has held more than two dozen oversight hearings on waste, fraud, and abuse in Iraq reconstruction contracting. Halliburton and its subsidiary Kellog, Brown and Root (KBR) have been the subject of many of them. Chaired by Senator Byron Dorgan (D-ND), these hearings have “unearthed numerous examples of contracting abuse, including the inappropriate awarding of major contracts to Halliburton; billions of dollars in unsubstantiated costs and overcharges on everything from fuel, to meals for the troops, to hand towels; and the delivery of unsafe water to our troops in Iraq, with which the troops showered and brushed their teeth,” Dorgan said in a statement back in 2008. Throughout its investigations into Halliburton, the Committee also uncovered efforts by the Pentagon and the Bush Administration to protect Halliburton from close scrutiny and criticism of its dubious practices including, but not limited to, retaliation against whistleblowers. Charles Smith, the senior civilian overseeing a multi-billion dollar contract awarded to KBR by the Pentagon, was forced out of his job when he refused to approve payment to KBR of more than $1 billion in questionable spending for which Army auditors had determined KBR lacked credible data or records. Bunnatine Greenhouse, once the most senior civilian contracting official at the Army Corps of Engineers, was removed from her job after raising concerns over the award of a $7 billion sole source, no compete, cost plus contract to KBR to restore Iraq’s oil production. Greenhouse testified at a 2007 DPC hearing that the award of the contract to KBR represented the worst abuse she had witnessed in her 23-year career. Still unsatisfied? Halliburton’s transgressions continue. In April 2007, the Pentagon misled Congress about multiple allegations that KBR was providing contaminated water to US troops which, according to KBR’s own internal reports, could have caused “mass sickness or death.” Interestingly, the General whose testimony at a Senate Armed Services Committee hearing misled Members was the same official who ordered the removal of Charles Smith from his post after he objected to KBR’s questionable $1 billion paycheck. In March of 2008, then-Senator Barack Obama (D-IL), along with Senator John Kerry (D-MA) introduced a bill aimed at preventing government contractors like KBR from setting up shell companies in foreign jurisdictions to avoid payroll taxes. Then-Rep. Rahm Emanuel (D-IL) and Rep. Brad Ellsworth (D-IN) introduced companion legislation in the House. In a press release, Obama said, “This legislation would close a tax loophole that has been exploited by Kellogg Brown & Root (KBR), a former subsidiary of Halliburton Corp. This loophole allowed KBR and potentially other government contractors to set up shell companies in the Cayman Islands in order to avoid paying payroll taxes for their American employees.” In his press release, Senator Kerry said “KBR is abusing the public trust at the taxpayer’s expense, and our reform will close the loophole that enables big corporations to take advantage of the American people.” According to Kerry’s office, the loophole that the legislation was intended to close enabled KBR to fleece American taxpayers by nearly $100 million a year. The Fair Share Act of 2008, which was co-sponsored by then-Senator Hillary Clinton was not reported out of the Senate Finance Committee. Arguably, the most reckless example of KBR’s abuse was the subject of a May 2009 DPC hearing, where Senators heard testimony and received internal Pentagon documents showing that in 2007 and 2008, KBR received multi-million dollar bonuses for work that led to the electrocution deaths of US soldiers. In 2008, a Staff Sergeant was electrocuted to death while showering at a US military installation in Baghdad. The Committee obtained testimony based on internal KBR inspection records that KBR had been aware of the electrocution hazard and claimed to fix the problem, meanwhile hiring unqualified third-country electricians and permitting the shocks to persist. Despite the harm done to our troops, KBR was awarded its $83.4 million bonus for the shoddy electrical work done in Iraq in 2007, more than half of which came after the Defense Contract Management Agency warned about ongoing problems with the electrical work. KBR’s infamously reckless conduct throughout the reconstruction process in Iraq is egregious and fundamentally undermines the US mission there. Each time Congress appropriates funds toward war efforts, the government solicits a commitment from the American taxpayer. The American people deserve to have their commitment met with responsible stewardship. Similarly, if it is to live up to its mission statement, PolitiFact has a responsibility to its readers to unambiguously separate fact from fiction and avoid the pitfall of equivocation in the face of controversy by misguided attempts at reaching some artificial middle ground. At this point, it is plain that KBR’s practices have traversed the realm of the wasteful, waded beyond that of the fraudulent, and are now comfortably into the abyss of the outright criminal, so unless PolitiFact’s Truth-O-Meter takes into account understatement, its rating of Huffington’s charge as “Half True” is unjustified and places it squarely on a long and unsavory list of characters who have deferred to KBR in the face of persistent and well-documented abuse.

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David Isenberg: KBR Gives Uncle Sam the One Finger Salute

July 3, 2010

Le’s take a brief look at the world of rent a generals. Specifically, Lt. Gen. Sanchez. (USA-Ret.). Gen. Sanchez had a distinguished Army career and honorably served his country. He was the highest-ranking Hispanic in the United States Army when he retired on November 1, 2006. Those who can remember past yesterday will recall that he served as the V Corps commander of coalition forces in Iraq from June 2003 to June 2004. While his time as commander was not without controversies ( hostile relations with Paul Bremer, torture scandal at Abu Ghraib, development of the Iraq insurgency) I assume he did the best he could. For most retired officers that would have been enough. But evidently not for Gen. Sanchez. Evidently he felt the need to continue the fight; only now against U.S. civilians and injured veterans. In February it was reported that the U.S. Army wass trying to stop him from continuing to be an expert for KBR in a lawsuit against it over civilian truck driver deaths and injuries. Sanchez is being paid $650 an hour and has reviewed documents and written a report that support’s KBR’s contention it should not be held legally responsible for the deaths of six civilian truck drivers and the injuries of others in a 2004 ambush in Iraq. The suing drivers and family members contend that KBR should have stopped the convoys when it was warned that attacks would increase on April 9, 2004, the first anniversary of the day allies in the U.S.-led invasion of Iraq reached Baghdad. KBR argues that the military approved sending the convoys out and several laws protect KBR from responsibility in a wartime situation. The Army contracts with KBR to provide transportation, food services and other logistical support. In his report for KBR on the 2004 ambush, Sanchez writes that KBR leadership was getting “emotional, hyperbolic, CNN-filtered, open source information, not intelligence” that was warning that the convoys could be ambushed. Sanchez says no battlefield leader could have known the convoy would be attacked. KBR leadership did stop convoys the day after six civilians were killed and 14 injured in the truck convoy ambush. But KBR is also fighting law suits regarding the burn pits it operated in Iraq as I have written about here and here . To see KBR’s last update to the allegations click here . KBR apparently thinks Gen. Sanchez has useful advice to offer here, even though I don’t recall the general having expertise in chemistry or toxicology. Nevertheless KBR, to emulate Paddy” Chayefsky’s famed movie Network, is mad as hell and is not going to take it anymore. The evidence is contained in Exhibit 40, filed back on Feb. 23. I have put the most pertinet parts in boldface. It is important to remember that KBR is in this position now because of the conduct of the United States. First, as the Army’s own AR 15-6 Report clearly admits, but for the Army’s failures in its own processes and procedures on April 9, 2004, the attack, injuries, and deaths associated with the Fisher case would never even have occurred. Second, but for the United States’ refusal to support KBR’s effort in the Fifth Circuit Court of Appeals to uphold the District Court’s 2006 total dismissal of the lawsuits passed on the Political Question Doctrine, there is every reason to believe the Fifth Circuit would have sustained the dismissal. Instead, KBR (and indeed the United States itself in any future Political Question Doctrine dispute) is saddled with a very troublesome Fifth Circuit standard.’ Accordingly, KBR must be able to present the live trial expert testimony of Lieutenant General Sanchez, and to do so in precisely the form and content in which his report was submitted to the Court. This need was exacerbated by Judge Miller’s blatant disregard of the four military declarations submitted in his denial of KBR’s Political Question Doctrine motion, making the General’s live trial testimony possibly the only evidence that will sway Judge Miller. Further, his testimony, including his statement reiterating the AR 15-6 Report’s admission of Army fault, will provide precisely the type of evidence needed to prove on appeal that these cases should have been dismissed on the basis of the Political Question Doctrine – that is, among other things, the failure to do so caused Army officers to present public criticism of each other at trial! As we made clear in our original December 4, 2009 request, as a result of his senior military leadership position in Iraq during the relevant time period, Lieutenant General Sanchez has unique relevant expertise that is not available from any other source. As reflected in his report, the General will testify from that expertise about the circumstances in Iraq in April 2004, the Army’s prosecution of the war, KBR’s logistics support mission, and the actual events up to and on April 8 and 9, 2004 upon which these lawsuits are based. This expert testimony is crucial to KBR’s ability to defend itself on key issues such as state of mind, causation, and various affirmative defenses. Lastly, as you know, throughout the five years of these lawsuits, KBR has carefully refrained from pointing its finger at the United States as the culpable entity. One result of KBR’s restraint in this regard has been that plaintiffs in these cases have gained a huge advantage in the public airing of these lawsuits. Plaintiffs have co-opted the Houston media and other press into presenting only the damning evidence plaintiffs allege prove that KBR intended to injure and kill its own employees for profit. As trial looms, KBR can no longer sit silent, and instead intends to aggressively make its case to the public, hopefully to prevent the entire jury pool from being ‘ We also urge the United States to support KBR in the litigation of these defenses in any appeal that KBR files in these cases. prejudiced against the company. Towards this end, KBR intends to release Lieutenant General Sanchez’s expert report and deposition testimony to the press as part of this campaign. KBR greatly appreciates the support the Army has provided the company in these (and other) lawsuits. But given the untenable posture of the cases and enormous exposure faced by KBR, we cannot overstate the need for the Army to approve this request for reconsideration, We trust that you will give this matter your full, serious, and immediate attention. For those who remember Mario Puzo, KBR seems to be channeling the GodFather, and is making a Army thinly veiled offer it can’t refuse. It will be interesting to see who blinks.

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KBR awarded contract by Jilin Connell Chemical Industry Co.

June 3, 2010

KBR awarded contract by Jilin Connell Chemical Industry Co.

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KBR acquires Energo Engineering

April 6, 2010

KBR acquires Energo Engineering

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KBR Building to construct $94m hospital in Georgia

March 10, 2010

KBR Building to construct $94m hospital in Georgia

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KBR awarded design study contract in Australia

February 11, 2010

KBR awarded design study contract in Australia

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David Isenberg: Yes, KBR, Congress is Talking About You

December 26, 2009

Although it was not mentioned by name there are some provisions in the FY 2010 Defense Appropriations bill which are very clearly aimed at KBR, the former Halliburton company. These are not the sort of provisions that will be making KBR officials happy. Consider Sec. Sec. 8116, “Limitation on Availability of Funds for Execution of Contracts Under LOGCAP.” It says: No later than 90 days after enactment of this Act none of the funds appropriated or otherwise made available by this Act may be obligated or expended for the execution of a contract under the Logistics Civil Augmentation Program (LOGCAP) unless the Secretary of the Army determines that the contract explicitly requires the contractor– (1) to inspect and immediately correct deficiencies that present an imminent threat of death or serious bodily injury so as to ensure compliance with generally accepted electrical standards as determined by the Secretary of Defense in work under the contract; For those who have forgotten, it was KBR which has done the majority of the electrical work at U.S. facilities in Iraq. That work resulted in faulty wiring in far too many facilities, resulting in the low-level electrocutions of 16 U.S soldiers and 2 contractors and hundreds more incurred shock-related injuries in Iraq over a span of four years.. The most recent was 25-year-old Adam Hermanson, a US Air Force veteran-turned private security contractor who died in a shower at the compound of his employer, Triple Canopy, in Baghdad’s Green Zone on September 1, 2009. That a contractor’s apparently shoddy work ended up killing a contractor can only be viewed as ironic. In October an Army task force re-inspecting thousands of potentially unsafe U.S. facilities in Iraq for faulty electrical wiring said KBR, which previously ordered to conduct inspections of its own work, placed 5,600 facilities on a “deferred” list — meaning they were low priority or there were no plans to inspect them. Officials with the Defense Department’s Task Force SAFE said many of the buildings on KBR’s deferred list were still being used by soldiers. Those wanting details on KBR’s offenses over the years should head over Ms. Sparky , an excellent blog on the perils of KBR. And then there was part 3 of Sec. 8116, which says: (3) establish and enforce strict standards for preventing, and immediately addressing and cooperating with the prosecution of, any instances of sexual assault in all of its operations and the operations of its subcontractors. For those who follow KBR this is a not very veiled reference to KBR’s rape problem. Prompted by the allegation that former KBR employee Jamie Leigh Jones was drugged, stripped, beaten and gang-raped by her co-workers on her fourth day in Iraq in 2005 , this provision bans defense contractors from forcing employees to use arbitration to resolve claims of discrimination and sexual assault. The provision is a result of an amendment introduced by Sen. Al Franken (D-MN) to the appropriations bill. Employers and other potential lawsuit targets generally prefer binding arbitration because it keeps disputes out of the court system, where juries can inflict damaging verdicts. The no-arbitration provision would ban defense contracts worth more than $1 million with companies that seek to enforce or establish binding requirements in employee contracts in certain circumstances. On May 16, 2007, Jones filed a civil lawsuit against KBR and former parent corporation Halliburton. KBR requested a private arbitration, and claims this is required by her employment contract. On September 15, 2009 the 5th Circuit Court of Appeals in New Orleans ruled Jamie Leigh Jones’ federal lawsuit against KBR and several affiliates can be tried in open court. The provision covers any requirements that force workers to use arbitration to resolve claims of sexual assault, sexual harassment, assault, battery, infliction of emotional distress, false imprisonment and negligent hiring. Of course, as is usually the case, Congress left in the usual all purpose national security escape clause for a contractor. (b) Waiver.–The Secretary of the Army may waive the applicability of the limitation in subsection (a) to any contract if the Secretary certifies in writing to Congress that– (1) the waiver is necessary for the provision of essential services or critical operating facilities for operational missions; or (2) the work under such contract does not present an imminent threat of death or serious bodily injury.

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