Pentagon Auditor Cites Heavy Fraud By Contractor

RICHARD LARDNER

WASHINGTON (AP) — A massive contract to support U.S. troops in Iraq and Afghanistan received a withering review Monday, as a special panel investigating waste and fraud in wartime spending was told of numerous deficiencies in the arrangement that has paid KBR Inc. nearly $32 billion since 2001.

Testifying before the bipartisan Wartime Contracting Commission, April Stephenson, head of the Defense Contract Audit Agency, said her agency has referred at least 16 reports since 2004 of suspected fraud or improper conduct stemming from the contract to government investigators.

Stephenson called the number of referrals "unprecedented" for a single military contract or program. But she declined to give details on those reports or name the sources of the alleged improprieties.

The agency has conducted dozens of audits on the KBR contract and has challenged about $4.7 billion in costs charged by the company, she said.

KBR is the primary contractor for the so-called LOGCAP III contract, but the Houston-based company has hired an extensive network of subcontractors to help it provide U.S. forces in Afghanistan, Iraq, and Kuwait with dining facilities, transportation, sanitation systems, warehouses and other critical services.