The Government of the United States is suing First Kuwaiti Trading & Contracting over the pricing of a US military subcontract executed on behalf of US construction firm KBR.
The US government’s complaint arises from the Bed Down Mission, a push to replace the tents used to house soldiers during the early days of the war with mobile prefabricated units.
According to the complaint, KBR awarded a subcontract to First Kuwaiti in 2003 to supply, transport and install 2,252 living containers at Camp Anaconda in Iraq by the end of that year for about $80m.
First Kuwaiti presented two claims to KBR in 2004 blaming the government for delays in providing military escorts, entitling the company to an additional $48.8m to cover its costs.
The government alleges that First Kuwaiti knowingly inflated its crane and truck costs, among other items, and misrepresented the cause of its delays, and that KBR was also in full knowledge of this.
“We depend on companies like KBR to provide valuable noncombat services to our military such as housing and feeding our troops,” said Stuart Delery, an attorney for the Department of Justice.
“We will ensure that contractors live up to their promises, and are not permitted to profit at the expense of the taxpayers at home who are supporting our men and women in uniform.”
The US is filing the suit under the False Claims Act, which entitles the government to recover three times its damages, plus a $5,500 to $11,000 civil penalty for each false claim.
Jim Lewis, attorney for Illinois, where the suit has been filed, commented: “When dealing with the government, just like dealing with anyone else, it’s important to give an honest account.”
“The facts indicate that KBR and First Kuwaiti did not provide an honest accounting.”
The US is also suing KBR for fraud under the Contract Disputes Act and for breach of contract.