Kellogg Brown & Root Services, Inc.
Docket: ASBCA 59357, ASBCA 59358
Decision date: 2015-08-13

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ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeals of -- ) 
) 
Kellogg Brown & Root Services, Inc. ) 
) 
Under Contract No. DACA63-03-D-0005 ) 
APPEARANCES FOR THE APPELLANT: 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA Nos. 59357, 59358 
Kurt J. Hamrock, Esq. 
Herbert L. Fenster, Esq. 
Raymond B. Biagini, Esq. 
Covington & Burling LLP 
Washington, DC 
Thomas H. Gourlay, Jr., Esq. 
Engineer Chief Trial Attorney 
Michaele J. Mandulak, Esq. 
Engineer Trial Attorney 
Raymond M. Saunders, Esq. 
Army Chief Trial Attorney 
Kyle E. Chadwick, Esq. 
Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE DELMAN ON APPELLANT'S 
MOTION FOR PARTIAL SUMMARY JUDGMENT 
Kellogg Brown & Root Services, Inc. (KBRSI or appellant) 1 has filed a motion 
for partial summary judgment under ASBCA Nos. 59357 and 59358, contending that 
under its contract with the government it is entitled to be indemnified against certain 
third-party claims and for the legal costs it has incurred in defending these claims. The 
government opposes partial summary judgment, contending that the government has 
no such contractual obligation under the circumstances. We have jurisdiction under 
the Contract Disputes Act, 41 U.S.C. §§ 7101-7109. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. In the run-up to "Operation Iraqi Freedom" and the invasion of Iraq in 2003, 
the Secretary of Defense designated the U.S. Army Corps of Engineers 
1 The contract and the related task order were issued to "Brown & Root Services, A 
Division of Kellogg Brown & Root," which later became KBRSI. For ease of 
reference, we refer to KBRSI as the contractor/appellant in this opinion. 

("government") as the executive agent for Iraqi restoration. Insofar as pertinent here, 
the government established a "Task Force Restore Iraqi Oil" as the planning and 
executive organization for management and operations to restore Iraq's oil production 
as a result of the war and its aftermath. (R4, vol. 1, tab Cl at 101) 
2. In response to the government's requirements under its Logistics Civil 
Augmentation Program (LOGCAP) contract, appellant developed a contingency 
support plan (CSP), dated 31 January 2003, to assess damage, repair, maintenance, and 
the resumption and/or continuity of operations of the oil infrastructure oflraq during a 
possible military occupation of Iraq (R4, vol. 4, tab D at 2). Following its receipt of 
the CSP, the government approached appellant with respect to the performance of a 
contract to execute the CSP and to perform oil field-related and support services. 
3. On 3 March 2003, appellant sent a request to the government seeking 
indemnification coverage under "Public Law 85-804" for unusually hazardous risks 
associated with the performance of any such contract (R4, vol. 1, tab Cl at 065). 
Public Law No. 85-804, 72 Stat. 972, signed into law on 28 August 1958, empowered 
the President to authorize executive agencies to enter into, amend or modify 
government contracts without regard to other provisions of law when necessary to 
facilitate the national defense. Acting under this authority, President Eisenhower on 
14 November 1958 issued Executive Order (EO) 10789, "Authorizing Agencies of the 
Government To Exercise Certain Contracting Authority in Connection With 
National-Defense Functions and Prescribing Regulations Governing the Exercise of 
Such Authority." In summary, Paragraph 1 of this EO authorized the Department of 
Defense and the service branches, "within the limits of the amounts appropriated and 
the contract authorization provided therefor," to enter into, amend, modify or make 
advance payments on government contracts when necessary to facilitate the national 
defense. 23 Fed. Reg. 8897; see EO 10789 following 50 U.S.C. § 1431. (App. supp. 
br. at 2) 
4. On 22 July 197I, President Nixon issued EO 11610, which amended and 
expanded EO 10789 by adding Paragraph IA. Insofar as pertinent, Paragraph IA 
provided as follows: 
IA. (a) The limitation in paragraph 1 to amounts 
appropriated and the contract authorization provided 
therefor shall not apply to contractual provisions which 
provide that the United States will hold harmless and 
indemnify the contractor against any of the claims or 
losses set forth in subparagraph (b ), whether resulting 
from the negligence or wrongful act or omission of the 
contractor or otherwise (except as provided in 
subparagraph (b)(2)). This exception from the 
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limitations of paragraph 1 shall apply only to claims or 
losses arising out of or resulting from risks that the 
contract defines as unusually hazardous or nuclear in 
nature .... 
(b)(l) Subparagraph (a) shall apply to claims 
(including reasonable expenses of litigation and 
settlement) or losses, not compensated by insurance or 
otherwise, of the following types: 
(A) Claims by third persons, including employees 
of the contractor, for death, personal injury, or loss of, 
damage to, or loss of use of property; 
(2) Indemnification and hold harmless 
agreements entered into pursuant to this subsection, 
whether between the United States and a contractor, or 
between a contractor and a subcontractor, or between two 
subcontractors, shall not cover claims or losses caused by 
the willful misconduct or lack of good faith on the part 
of any of the contractor's or subcontractor's directors 
or officers or principal officials which are (i) claims by 
the United States (other than those arising through 
subrogation) against the contractor or subcontractor, 
or (ii) losses affecting the property of such contractor 
or subcontractor. Regulations to be prescribed or 
approved by the Secretaries of Defense, the Army, the 
Navy or the Air Force shall define the scope of the term 
'"principal officials." [Emphasis added] 
36 Fed. Reg. 13755; see EO 10789 following 50 U.S.C. § 1431. 
5. The government issued a determinations and findings (DAF) in support of 
appellant's indemnification request, entitled: '"DETERMINATIONS AND 
FINDINGS OF THE CONTRACTING OFFICER CONCERNING THE REQUEST 
FOR INDEMNIFICATION SUBMITTED BY [APPELLANT] RELATING TO THE 
CONTRACT TO EXECUTE A CONTINGENCY SUPPORT PLAN FOR THE 
RESTORATION AND OPERATION OF THE IRAQI OIL INFRASTRUCTURE." 
Insofar as pertinent, this DAF provided as follows: 
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2. Definition of unusually hazardous risks and 
statement that parties to the contract have agreed 
concerning those risks. 
a. Definition of unusually hazardous risks. 
This is an unprecedented contract for an 
unprecedented situation. The risks associated with this 
contract are extraordinarily high. The extent of damage 
that may be done to Iraq's oil infrastructure and other 
related infrastructure remains unknown. Technical risks 
are extraordinarily high. The Contractor must quickly 
assess the condition of the facilities. Then he must quickly 
make repairs to the Iraqi energy infrastructure and all 
related systems and facilities, including but not limited 
to ... water, pipeline distribution systems, and supporting 
electrical grids in an austere environment without 
sufficient time to evaluate the situation thoroughly. As a 
result, there is significant risk that actions taken by the 
contractor, particularly in the first few weeks after the 
conflict begins will be less than optimum . 
.. . Although the contract contemplates that 
CENTCOM will provide a "benign" environment, there 
will be many unusual and extraordinary hazards in the 
area. These may include, but are not 
limited to, indirect 
fire; booby traps; biological and chemical agents, which 
may be persistent; suicide bombers; hazards caused or 
increased by the deteriorated condition of the Iraqi 
infrastructure and lack of instrumentation on the facilities; 
and environmental hazards .... 
Finally, even successful operations on a scale of the 
one envisioned here are likely to result in contamination of 
fresh water zones both on and beneath the surface and may 
result in other environmental pollution. 
(Appellant's Statement of Undisputed Material Facts (ASUMF), attach. 3 at 9, 12-13) 
This DAF was signed by the contracting officer (CO) and other government officials 
between 5 March and 6 March 2003 (id. at 18). 
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6. On 8 March 2003, the government awarded to appellant Contract 
No. DACA63-03-D-0005. This cost-reimbursement, indefinite delivery, indefinite 
quantity contract had a base period of two years and three one-year options, not to 
exceed a total of five years. The government's minimum guarantee for the contract 
was $500,000 and the estimated maximum amount was $7 billion. (R4, vol. 1, tab B 
at 1-3) 
7. By Memorandum of Decision dated 19 March 2003 (''White Memo"), the 
Secretary of the Army authorized the inclusion of the Indemnification clause into the 
contract, Federal Acquisition Regulation (FAR) 52.250-1, Alternate I. In brief, this 
clause provided for indemnification of appellant for certain losses arising out of or 
resulting from a risk defined in the contract as "unusually hazardous." Enclosure A to 
the White Memo defined "unusually hazardous risks" as follows: 
ENCLOSURE A 
DEFINITION OF UNUSUALLY HAZARDOUS RISKS 
The definition of the unusually hazardous risks to which 
the contract indemnification clause will apply is as 
follows: 
"The risk of 
-fire, explosion, combustion or detonation of 
hydrocarbons or other combustible substances, or of 
munitions, explosives, pyrotechnics and ordnance of all 
types, whether military or nonmilitary; 
-exposure to lethal chemical agents, biological 
agents, radioactivity or nuclear materials. The term "lethal 
chemical agents" for the purposes of this clause, means: 
(i) the agents GB, VX or mustard, (ii) any other military 
chemical agent encountered at 
the work site, or (iii) any 
other highly toxic, carcinogenic, mutagenic, teratogenic or 
psychotropic chemical resulting from a reaction with the 
items listed in (i) or (ii) above; 
-sudden or nonsudden release of hydrocarbons or 
other toxic or hazardous substances or contaminants 
into the environment, including subsurface release; 
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-failure of equipment or failure to control a wild 
well.. .. " [Emphasis added] 
(ASUMF, attach. 3 at 2-4) 
8. The Indemnification clause, the White Memo and Enclosure A were 
incorporated into the contract under Modification No. P00002, effective 20 March 
2003 (R4, vol. 1, tab B at 126-29). The Indemnification clause is appended as an 
appendix to this opinion. 
9. Pursuant to the contract, the government issued Task Order No. 0003 to 
appellant on 20 March 2003 (R4, vol. 1, tab B at 139-52). Task Order No. 0003, as 
modified by Amendment No. 03 dated 30 April 2003, tasked the contractor to 
"provide the necessary equipment, tools, materials and personnel to perform and 
complete repairs on oil wells ... pipelines, pump stations ... and other associated 
infrastructure which are necessary to ... restore the facilities to operating condition" (id. 
at 138). The Task Order also provided: "'[C]ontractor personnel shall be notified by 
ACO that benign conditions exist [Zl and directed by the ACO to deploy from staging 
areas ... to specific facilities" (id. at 140). 
10. One facility to which appellant was directed under Task Order No. 0003 
was the Qarmat Water Treatment Plant (the "plant") near Al Basrah, Iraq. Simply 
stated, this plant provided chemically-treated water that was distributed to pumping 
stations which was then injected under pressure into nearby Iraqi oil fields to allow for 
the oil and gas to rise, thereby facilitating extraction. (R4, vol. 2, tab Cl at 1283) The 
operations at this plant had become degraded and needed to be restored as a link to the 
restoration of Iraqi oil production ( compl. ~ 19, answer~ 19). 
11. Because of the ongoing dangerous conditions in Iraq, and as required by 
the contract, the government provided uniformed U.S. military personnel as force 
protection to KBRSI personnel while traveling 
throughout the war theater and while 
performing work at Iraqi oil infrastructure facilities, including the subject plant 
( compl. ~ 18, answer~ 18). 
12. It is undisputed that in the spring of 2003 and beyond, there were persons at 
the plant who were exposed by touch or inhalation to a chemical agent in powder form 
known as "Sodium Dichromate," which was found in the soil and in other areas of the 
2 The parties dispute the nature and extent of the government's responsibility to 
provide "benign conditions" to Iraqi sites under Task Order No. 0003. 
However, this dispute is unrelated to the interpretation of the Indemnification 
clause, and hence is not a relevant, material dispute that would preclude 
consideration of appellant's motion. 
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plant. It is also undisputed that in or around the summer of 2003, appellant took action 
to encapsulate the Sodium Dichromate at certain plant locations, and that later in the 
year plant operations were shut down for a period of time due to personnel exposure 
and related testing. (R4, vol. 2, tab C 1 at 1319-22, vol. 11, tab H at 2899, 2907) 
13. According to '"Memorandum for Surgeon General of the Army from 
Defense Health Board" dated 10 December 2008, Sodium Dichromate is "a corrosion 
suppression agent used in the water treatment process." It is "an inorganic compound 
containing hexavalent chromium known to be toxic and carcinogenic to humans and 
animals." (App. supp. R4, tab J-15 at 105) Sodium Dichromate is also classified as a 
hazardous substance under regulations implementing the Federal Water Pollution 
Control Act. 40 C.F.R. § 116.4. 
Sodium Dichromate Legal Actions Against Appellant 3 
14. In 2005, former KBRSI personnel sought through arbitration to recover 
from KBRSI for injuries allegedly caused by Sodium Dichromate exposure at the 
Qarmat plant. See Langford v. Halliburton, AAA No. 704800064905. The 
government reimbursed KBRSI for the legal costs it incurred in successfully defending 
the Langford arbitration. 
15. Beginning in December 2008, various groups of U.S. and British military 
personnel filed claims against KBRSI in federal court, alleging that these individuals 
had provided force protection for KBRSI personnel or perimeter security at the plant 
in 2003 and had been exposed to injurious levels of Sodium Dichromate due to 
appellant's negligence and wrongdoing. 
16. The first claim brought by military personnel in federal court was 
McManaway v. KBR Inc. (Southern District of Indiana), which was filed in late 2008 
on behalf of a group of Indiana National Guard personnel. Throughout 2009, KB RSI 
was named by military personnel in several additional lawsuits in federal court: Bixby 
v. KBR Inc. (District of Oregon); Billiter v. Kellogg, Brown & Root Services, Inc. 
(Northern District of West Virginia); Gallaher v. KBR Inc. (Northern District of West 
Virginia); and Bootay v. KBR Inc. (Western District of Pennsylvania). KBRSI notified 
the government of the lawsuits brought against it and requested assistance and 
direction as to the management or disposition of the suits. The government 
acknowledged receipt of these litigation notices, but stated in response that it was the 
policy of the Army to remain neutral in the litigation. 
3 SOF iii! 14-18 are based upon ASUMF iii! 20-25. The government has accepted the 
factual assertions in the ASUMF, except for ASUMF ii 18 (gov't opp'n at 3). 
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17. KBRSI defended these lawsuits and obtained dismissals in McManaway, 
Billiter, Gallaher, and Bootay. After the above dismissal, the McManaway plaintiffs 
filed a similar action in 2011 in the U.S. District Court, Southern District of Texas, and 
as far as this record shows, this action is currently pending. 
18. In October 2012, following a jury trial in Bixby, the jury returned an $85.2 
million verdict, including compensatory and punitive damages, against KBRSI and 
other defendants. On remittitur, the court reduced the jury's verdict to an $81 million 
judgment. KBRSI appealed. 
19. On appeal, the Ninth Circuit vacated the judgment and reversed and 
remanded, holding that the defendants were not subject to personal jurisdiction in 
Oregon for actions performed in Iraq. Bixby v. KBR, Inc.; Kellogg, Brown & Root 
Service, Inc., 603 F. Appx. 605 (9th Cir. 2015). 
KBRSI Requests Indemnification from the Government 
20. Throughout the above period, KBRSI notified the government of the 
ongoing legal matters and the concomitant legal costs it was incurring (compl. ~ 87, 
answer~ 87). By letter to the CO dated 29 December 2010, KBRSI requested that the 
government acknowledge its indemnification obligations under the contract and 
participate directly in the pending lawsuits (app. supp. R4, tab J-16 at 117-24). 
21. By letter to KBRSI dated 6 April 2011, the CO denied the indemnification 
request (R4, vol. 1, tab Cl at 449-50). KBRSI submitted additional information to the 
government, and the parties met in August 2011 to further discuss this matter. By 
letter to KBRSI dated 18 November 2011, the CO again denied KBRSI's 
indemnification request (R4, vol. 2, tab Cl at 1256-57). 
22. In July and August 2012, KBRSI submitted to the government invoices for 
payment of some of the outside legal costs incurred to defend against these third-party 
lawsuits ( compl. ~ 4 7, answer~ 4 7). The government did not pay these invoices 
(compl. ~ 49, answer~ 49). 
23. KB RSI thereafter submitted three certified claims to the government, dated 
21December2012, 21 February 2013 and 4 April 2014, seeking payment for the 
unpaid invoices and additional legal costs related to the Sodium Dichromate claims, 
totaling over $30 million (R4, tabs Cl, C2, C3). The government declined to issue a 
CO decision on any of these claims. 
24. Appellant appealed to this Board based upon the deemed denial of its 
claims. The deemed denial ofthe certified claim of21December2012, as updated by 
the claim of21 February 2013, was docketed as ASBCA No. 59357. The deemed 
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denial of the claim dated 4 April 2014 was docketed as ASBCA No. 59358. The 
appeals were consolidated and pleadings were filed. 
25. On 23 December 2014, appellant filed the subject motion for partial 
summary judgment under ASBCA Nos. 59357 and 59358.4 Appellant sought 
judgment under Count III of its complaint, which alleged entitlement to 
indemnification pursuant to Public Law No. 85-804 and the Indemnification clause. 
26. On 28 July 2014, appellant filed another certified claim with the CO, 
seeking an additional $488,309.83, plus interest, under the Indemnification clause for 
costs incurred to defend certain Sodium Dichromate matters (ASBCA No. 59873, 
compl., ex. A at 26). By decision dated 10 December 2014, the CO denied this claim 
(id., ex. B). Appellant appealed to this Board, and the appeal was docketed as ASBCA 
No. 59873. Per appellant's request and without objection from the government, the 
three appeals were consolidated and further proceedings under ASBCA No. 59873 
were stayed pending resolution of the dispositive motions in ASBCA Nos. 59357 and 
59358. 
DECISION 
Under appellant's motion for partial summary judgment we are asked to 
interpret the parties' contract, specifically, the Indemnification clause, FAR 52.250-1, 
Alternate I, and the related White Memo and its Enclosure A that were made part of 
the contract under Modification No. P00002. "'Contract interpretation begins with the 
plain language of the written agreement." McHugh v. DLT Solutions, Inc., 618 F.3d 
1375, 1380 (Fed. Cir. 2010). We seek an interpretation of FAR clauses/regulations 
consistent with the plain terms provided; it is not our prerogative to insert words or 
phrases to alter an otherwise plain and clear meaning. Tesoro Hawaii Corp. v. United 
States, 405 F.3d 1339, 1346-47 (Fed. Cir. 2005); Northrop Grumman Corp., ASBCA 
No. 57625, 14-1 BCA ~ 35,501, recon. denied, 14-1BCA~35,743. Contract 
interpretation is a question of law and may be resolved by summary judgment if the 
provisions are unambiguous. Skanska US Building, Inc., ASBCA No. 56339, 10-1 
BCA ~ 34,392 at 169,832. 
The Indemnification clause, Paragraph (b ), states in part as follows: 
Under Public Law 85-804 (50 U.S.C. 1431-1435) and 
Executive Order 10789, as amended, and regardless of any 
other provisions of this contract, the Government shall, 
4 Appellant had earlier filed a motion for judgment on the pleadings under ASBCA 
Nos. 59357 and 59358. 
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subject to the limitations contained in the other paragraphs 
of this clause, indemnify the Contractor .... 
We address below whether appellant has met the requirements for indemnification as 
prescribed by this clause. 
Per Paragraphs (b) and (c) of the Indemnification Clause, the Third-Party Claims and 
Related Costs "Arisefsl Out of or Result[s] from" a Risk Defined in the Contract as 
Unusually Hazardous and Are "Not Compensated for by Insurance or Otherwise." 
By 
its very terms, Paragraph (b )( 1) of the Indemnification clause covers the 
type of loss, i.e., litigation expense and personal injury claims, for which appellant 
seeks indemnification here. Under Paragraph ( c) of the Indemnification clause, the 
government agreed to indemnify appellant for such loss that "arises out of or results 
from a risk defined in this contract as unusually hazardous" and was "not compensated 
for by insurance or otherwise." 
"Unusually hazardous" risks are defined in "Enclosure A" of the White Memo, 
which was made part of the contract under Modification No. P00002. One such risk 
was defined as the "nonsudden release" of a "toxic or hazardous substance." 
Sodium Dichromate contains hexavalent chromium, a toxic and carcinogenic 
substance. It is also classified as a hazardous substance under regulations 
implementing the Federal Water Pollution Control Act. (SOF ii 13) Indeed, it is 
undisputed that appellant took action to encapsulate the Sodium Dichromate powder at 
the plant in or around the summer of 2003, and that later in the year the plant was shut 
down for a period of time due to personnel exposure and related testing. We believe 
that Sodium Dichromate is a "toxic or hazardous substance" in accordance with the 
plain meaning of the term and in accordance with Enclosure A of the White Memo in 
the contract. 
The parties' motion papers do not dispute the meaning of the term "nonsudden 
release" and do not dispute the application of the term to the Sodium Dichromate 
exposure in this case. The Army has defined "non-sudden release" of an agent in an 
indemnification context under Public Law No. 85-804 as a release of toxic material 
"which takes place 
over time and involves continuous or repeated exposure." Mark J. 
Connor, Government Owned-Contractor Operated Munitions Facilities: Are They 
Appropriate in the Age of Strict Environmental Compliance and Liability?, 131 
MILITARY LAW REVIEW 39 n.262 (1991). It is undisputed that there were persons at 
the plant who were repeatedly exposed to Sodium Dichromate powder in the soil and 
in other areas of the plant over a period of time through touch or inhalation. We 
believe that this exposure is consistent with the term "nonsudden release" of a toxic or 
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hazardous substance in accordance with Enclosure A of the White Memo in the 
contract. 
Based upon the above, we believe that appellant has shown an "unusually 
hazardous risk" to which indemnification applies under the Indemnification clause. 
We also believe that, per Paragraph ( c) of the clause, the loss for which appellant seeks 
indemnification "arises out of' or "results from" that risk. The parties' motion papers 
also do not dispute that such loss was "not compensated for by insurance or 
otherwise," per Paragraph (c) of the clause, and we so conclude. 
Accordingly, we conclude that appellant has met the requirements of 
Paragraphs (b) and ( c) of the Indemnification clause for purposes of obtaining 
indemnification under the clause. 
Per Paragraph (d) of the Indemnification clause, Willful Misconduct or Lack of Good 
Faith of the Contractor Does Not Bar Indemnification of the Costs Claimed. 
The government contends that it did not intend under the Indemnification 
clause to indemnify appellant for third-party claims and related litigation costs 
attributable to appellant's own misconduct, and spends much of its opposition citing to 
the evidence of record supporting this alleged misconduct (gov't opp'n at 31-37).; 
The government's contention, however, is not supported by the language of the 
Indemnification clause. Paragraph ( d) of the clause expressly addresses claims or 
losses "caused by willful misconduct or lack of good faith" of the contractor. Under 
such circumstances, said paragraph bars indemnification of costs incident to 
"Government claims against the Contractor" or for "Loss or damage affecting the 
Contractor's property." It does not bar the indemnification of third-party claims 
against appellant and related legal costs. To the same effect is EO 10789 as amended 
(SOF ~ 4). Hence, assuming, arguendo, that there was some element of misconduct by 
KB RSI here, such misconduct does not bar indemnification of the covered losses 
arising from these third-party actions. 
We have considered all the government's arguments regarding the 
interpretation of the Indemnification clause and otherwise. We conclude that the 
Indemnification clause - and the related White Memo and Enclosure A - are 
unambiguous, and that the plain language of these contract provisions support 
5 For example, the jury in Bixby found appellant liable for compensatory and punitive 
damages and the trial court, in response to post-trial motions, found that 
appellant, inter alia, affirmatively concealed the risks of exposure to Sodium 
Dichromate to the plaintiffs (gov't opp'n at 29-31). The Ninth Circuit vacated 
this judgment on jurisdictional grounds (see SOF ~ 19). 
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appellant's entitlement to indemnification as a matter of law under the circumstances 
presented. 
CONCLUSION 
Appellant's motion for partial summary judgment under Count III of its 
complaint, seeking entitlement to indemnification pursuant to Public Law No. 85-804 
and the Indemnification clause, is granted consistent with this opinion. 
Dated: 13 August 2015 
I concur 
MARK N. STEMPLER 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
\JAC 
A ministrative Judge 
Armed Services Board 
of Contract Appeals 
I concur 
RICHARD SHACKLEFORD 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA Nos. 59357, 59358, Appeals of 
Kellogg Brown & Root Services, Inc., rendered in conformance with the Board's 
Charter. 
Dated: 
12 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals 

APPENDIX 
52.250-1 Indemnification Under Public Law 85-804. 
As prescribed in 50.403-3, insert the following clause in contracts whenever the 
approving official determines that the contractor shall be indemnified against 
unusually hazardous or nuclear risks (also see 50.403-2(c)): 
INDEMNIFICATION UNDER PUBLIC LAW 85-804 (APR 1984) 
(a) "Contractor's principal officials," as used in this clause, means directors, 
officers, managers, superintendents, or other representatives supervising or directing-
(1) All or substantially all of the Contractor's business; 
(2) All or substantially all of the Contractor's operations at any one plant or 
separate location in which this contract is being performed; or 
(3) A separate and complete major industrial operation in connection with the 
performance of this contract. 
(b) Under Public Law 85-804 (50 U.S.C. 1431-1435) and Executive Order 
10789, as amended, and regardless of any other provisions of this contract, the 
Government shall, subject to the limitations contained in the other paragraphs of this 
clause, indemnify the Contractor against-
(1) Claims (including reasonable expenses of litigation or settlement) by third 
persons (including employees of the Contractor) for death; personal injury; or loss of, 
damage to, or loss of use of property; 
(2) Loss of, damage to, or loss of use of Contractor property, excluding loss of 
profit; and 
(3) Loss of, damage to, or loss of use of Government property, excluding loss 
of profit. 
( c) This indemnification applies only to the extent that the claim, loss, or 
damage ( 1) arises out of or results from a risk defined in this contract as unusually 
hazardous or nuclear and (2) is not compensated for by insurance or otherwise. Any 
such claim, loss, or damage, to the extent that it is within the deductible amounts of the 
Contractor's insurance, is not covered under this clause. If insurance coverage or 
other financial protection in effect on the date the approving official authorizes use of 

this clause is reduced, the Government's liability under this clause shall not increase as 
a result. 
( d) When the claim, loss, or damage is caused by willful misconduct or lack of 
good faith on the part of any of the Contractor's principal officials, the Contractor 
shall not be indemnified for-
( 1) Government claims against the Contractor (other than those arising through 
subrogation); or 
(2) Loss or damage affecting the Contractor's property. 
(f) The rights and obligations of the parties under this clause shall survive this 
contract's termination, expiration, or completion. The Government shall make no 
payment under this clause unless the agency head determines that the amount is just 
and reasonable. The Government may pay the Contractor or subcontractors, or may 
directly pay parties to whom the Contractor or subcontractors may be liable. 
(g) The Contractor shall-
( 1) Promptly notify the Contracting Officer of any claim or action against, or 
any loss by, the Contractor or any subcontractors that may reasonably be expected to 
involve indemnification under this clause; 
(2) Immediately furnish to the Government copies of all pertinent papers the 
Contractor receives; 
(3) Furnish evidence or proof of any claim, loss, or damage covered by this 
clause in the manner and form the Government requires; and 
(4) Comply with the Government's directions and execute any authorizations 
required in connection with settlement or defense of claims or actions. 
(h) The Government may direct, control, or assist in settling or defending any 
claim or action that may involve indemnification under this clause. 
(End of clause) 
Alternate I (APR 1984). In cost-reimbursement contracts, add the following 
paragraph (i) to the basic clause: 
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(i) The cost of insurance (including self-insurance programs) covering a risk 
defined in this contract as unusually hazardous or nuclear shall not be reimbursed 
except to the extent that the Contracting Officer has required or approved this 
insurance. The Government's obligations under this clause are-
(1) Excepted from the release required under this contract's clause relating to 
allowable cost; and 
(2) Not affected by this contract's Limitation of Cost or Limitation of Funds 
clause. 
3