Senator Collins Calls for Greater Transparency in Iraqi Contracting

Collins, Lieberman Ask Secretaries of Defense, State, and Army to Examine Transparency of KBR and Other Iraqi Contracts

Senate Homeland Security and Governmental Affairs Committee Chairman Susan Collins (R-ME) and Ranking Member Joseph Lieberman (D-CT) are calling on the Secretaries of Defense, State, and Army to examine the practice by Kellogg, Brown and Root Services, Inc. (KBR) of inappropriately labeling as proprietary information it provides to the government, thereby making review of its contracts difficult for government auditors. In letters to Secretary of Defense Donald Rumsfeld, Secretary of State Condoleezza Rice, and Secretary of the Army Francis J. Harvey, the Senators wrote, “KBR’s practice of apparently routinely marking much of the information that it provides to the government as proprietary, even when the data marked does not relate to internal contractor information such as indirect costs, labor rates, or internal processes, is not consistent with the Federal Acquisition Regulations. This practice inhibits the transparency of government activities, makes it more difficult to determine whether taxpayer funds have been used consistent with the terms of the contract, and places an unnecessary burden on the government to challenge inappropriate proprietary markings, which in turn wastes taxpayer dollars.” Senators Collins and Lieberman are calling this practice “unacceptable “ and have asked the Secretaries to work to find a solution that would bring more transparency to the process to better enable government auditors to do their jobs. The Senators’ request was made following a recent audit report released by the office of the Special Inspector General for Iraq Reconstruction (SIGIR) indicating that the audit was difficult to complete because of KBR’s use of proprietary data markings, even in cases where those markings were not appropriate. In addition, Senators Collins and Lieberman reported that they are working on legislation along with Senator Feingold to extend the expiration date of the SIGIR, which is currently slated to expire October 1, 2007. A full text of the Senators’ letter to Secretaries Rice and Rumsfeld is as follows: - MORE – - KBR LETTER, 2 - Dear Secretary Rice and Secretary Rumsfeld: The Senate Homeland Security and Governmental Affairs Committee is investigating the Special Inspector General for Iraq Reconstruction’s (SIGIR) findings in an interim audit report that Kellogg, Brown and Root Services, Inc., (KBR) has been inappropriately using proprietary data markings on information provided to the government under the Logistics Civil Augmentation Program (LOGCAP) Task Order 103. KBR’s practice of apparently routinely marking much of the information it provides to the government as proprietary, even when the data marked do not relate to internal contractor information such as indirect costs, labor rates, or internal processes, is not consistent with the Federal Acquisition Regulations. This practice inhibits the transparency of government activities, makes it more difficult to determine whether taxpayer funds have been used consistent with the terms of the contract, and places an unnecessary burden on the government to challenge inappropriate proprietary markings, which in turn wastes taxpayer dollars. The inappropriate use of proprietary designations obstructs the ability of the SIGIR’s office to audit contracts thoroughly. We are also concerned to learn that KBR refused to provide the SIGIR’s office with data in their original format, in effect impeding the office’s ability to review this information. This is obviously unacceptable. We have asked the Secretary of the Army, Francis Harvey, to personally involve himself in resolving this issue. Because the SIGIR reports administratively to both of you, we urge you to ensure that this unacceptable practice, which has impeded the work of the Special Inspector General, is ended and that a review of previously marked “proprietary” information is undertaken. On a related matter, we believe the SIGIR has done exceptional work and that his continued oversight of Iraq Relief and Reconstruction Funds (IRRF) is crucial. This is why we expect to introduce legislation to repeal the premature expiration date for the SIGIR’s mandate recently enacted as part of the Defense Authorization bill. We believe it is appropriate to return to the previous language that would have his office continue until ten months after 80 percent of the IRRF has been expended. We hope you will both support this initiative. ####