Audit Says KBR Work Force In Iraq Needs To Be Cut

RICHARD LARDNER

WASHINGTON (AP) — The Army's primary support contractor in Iraq has been warned by Pentagon auditors to cut its work force there or face nearly $200 million in penalties for keeping thousands too many on the payroll.

The Houston-based KBR Inc., responsible for everything from mail and laundry to housing and meals, has increased employee levels while U.S. troops steadily leave the country after more than six years of war, the audit says. As a result, the U.S. government is paying far more in labor costs in Iraq than it should as military resources are shifted to Afghanistan.

The Oct. 26 report from the Defense Contract Audit Agency opens a window into a behind-the-scenes battle over KBR's billing and management practices. The company provides crucial battlefield services under a $33.8 billion, 10-year deal signed in 2001.

There have been serious disagreements between KBR and defense auditors, who have challenged billions of dollars in charges as questionable. And KBR's critics, many of them Democrats on Capitol Hill, have accused the company of gouging the government during a time of war instead of being a responsible steward of public money.