Pentagon auditors warn KBR to reduce staffing levels in Iraq or face major financial penalties

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Pentagon auditors warn KBR to reduce staffing levels in Iraq or face major financial penalties
By RICHARD LARDNER , Associated Press

Last update: November 1, 2009 - 9:46 AM
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WASHINGTON - Pentagon auditors are warning the Army's primary support contractor in Iraq, responsible for everything from mail and laundry to housing and meals, to cut its work force there or face nearly $200 million in penalties for keeping thousands too many on the payroll.

According to an internal Defense Department audit, Houston-based KBR Inc. has increased employee levels while U.S. troops steadily leave the country after more than six years of war. 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.

"Each day that passes without taking action results in continued overstaffing and inefficiency," the report from the Defense Contract Audit Agency says.

The Oct. 26 audit, obtained by The Associated Press, 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.

more:http://www.startribune.com/business/68239717.html?elr=KArks:DCiU1OiP:DiiUiD3aPc:_Yyc:aUU