Kellogg Brown & Root Services Inc., headquartered in Houston, and three other companies have agreed to a settlement of $13.67 million to resolve a lawsuit seeking damages and penalties for alleged violations of the False Claims Act and the Anti-Kickback Act, and for breach of contract. The four named defendants are: Kellogg Brown & Root Services Inc., Kellogg Brown & Root Inc., Kellogg Brown & Root LLC, and Overseas Administration Services Ltd. (collectively KBR). The settlement amount includes a payment of $12 million by KBR, in addition to $1.67 million in contract restitution that KBR previously paid to the United States relating to the subcontracts at issue in the lawsuit.
The lawsuit concerned the Logistics Civil Augmentation Program (LOGCAP) III contract, under which KBR was required to provide logistics support to U.S. Army forces in Iraq, and subcontracts that KBR awarded to two local companies to perform work on its behalf: Subcontracts 11 and 39 to La Nouvelle Trading & Contracting Co. (La Nouvelle), and Subcontracts 167 and 190 to First Kuwaiti Trading & Contracting Co., aka First Kuwaiti Trading Co. (First Kuwaiti). The United States asserted that certain KBR employees responsible for awarding these subcontracts rigged the bidding process in favor of La Nouvelle and First Kuwaiti, and that, to reward this favorable treatment, principal officers from the foreign subcontractors paid kickbacks to the responsible KBR employees. The United...
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