Kellogg Brown & Root Services, Inc.
Docket: ASBCA 58578
Decision date: 2001-12-14

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of-- ) 
) 
Kellogg Brown & Root Services, Inc. ) 
) 
Under Contract No. DAAA09-02-D-0007 ) 
APPEARANCES FOR THE APPELLANT: 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 58578 
Michael R. Charness, Esq. 
Craig D. Margolis, Esq. 
Christine N. Roushdy, Esq. 
Vinson & Elkins, LLP 
Washington, DC 
Raymond M. Saunders, Esq. 
Army Chief Trial Attorney 
Kyle E. Chadwick, Esq. 
Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE GRANT 
ON THE GOVERMENT'S MOTION TO DISMISS 
The government has moved to dismiss this appeal for lack of jurisdiction, arguing that 
appellant, Kellogg Brown & Root Services, Inc. (KBRSI), has abandoned its originally-filed 
claim and now seeks the Board's decision on an issue not previously presented to the 
contracting officer (CO). Alternatively, the government asks that the appeal be dismissed for 
"prudential considerations." KBRSI opposes on both points. For the reasons set forth below, 
the government's motion is denied. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. On 14 December 2001, the Army awarded KBRSI Contract No. DAAA09-02-D-0007 
for combat support and combat service support to military personnel in contingency operations 
worldwide. The contract, known as the Logistics Civil Augmentation Program III (LOGCAP 
Ill) contract, expired 13 December 2011 after exercise of numerous options. (R4, tab 1 
at 001-002, tab 
50; compl. and answer~ 3) The contract has not yet been closed out (compl. and 
answer~ 3). KBRSI is now one of three prime contractors performing under a successor 
contract, LOGCAP IV, awarded on 17 April 2008 (com pl. and answer~ 21 ). 

2. The matter at issue here concerns Clause H-29 in the LOGCAP III contract. Clause 
H-29, Tour ofDuty/Hours of Work, states in part: 
The contractor may rotate contractor employees into and out of 
the theater provided there is no degradation in mission results. 
For employees who have deployed less than 179 days, the 
contractor may rotate personnel at his own expense, for 
employees who have deployed greater than 179 days may be 
rotated as an allowable cost under the contract [sic]. The 
contractor will coordinate personnel changes with the contracting 
officer. 
(R4, tab 1 at 48, tab 2 at 9) The LOGCAP IV contract contains the identical Tour of 
Duty/Hours of Work clause, though numbered H-26 (compl. and answer~ 36). 
3. KBRSI took the position in contract performance that the language of Clause H-29 
as to rotation of employees deployed less than 179 days meant that when KBRSI voluntarily 
rotated employees deployed less than 179 days, KBRSI would have to shoulder those 
expenses. However, when employees "departed theater less than 179 days after deployment," 
for other reasons not 
involving the discretion ofKBRSI, the cost for KBRSI to replace them 
could be an allowable cost under the contract. (See R4, tab 63 at 2) 
4. A disagreement arose as to KBRSI's position. The Defense Contract Audit Agency 
(DCAA) audited KBRSI's incurred travel cost submission for the LOGCAP III contract for 
FY 2004, and on 10 March 2011 issued a Form 1, No. 173, Notice of Contract Costs 
Suspended and/or Disapproved. Specifically, DCAA stated that "[t]his DCAA Form 1 
disapproves" approximately $27,000,000 in travel costs for KBRSI employees who were 
deployed in theater less than 179 days. (R4, tab 57 at 1, 3 of 4) Although the Form 1, 
No. 173 only disapproved FY 2004 travel, DCAA is currently conducting "numerous" audits 
on the contract 
for other fiscal years (gov't mot., ex. 1, Declaration of Robert Egan (Egan 
decl.) ~ 5). Form 1, No. 173 stated that the administrative contracting officer was to "take 
immediate action to recoup the disapproved costs, i.e. issue a final decision and a demand for 
payment" (R4, tab 57 at 1 of 4 ). 
5. On 12 August 20 11, KBRSI advised the Army that it intended to continue invoicing 
the government for travel costs for employees who had been deployed in theater for less than 
179 days unless KBRSI elected to rotate or transfer them. Referring to previous 
correspondence, KBRSI's representative stated that "[a]s I have not received any response to 
your opinion [sic] of this approach, KBR continue[s] to consider this practice acceptable." 
The same day, the CO responded "[b]ad assumption in your letter." When KBRSI responded 
that "[w]e have held this position for the past several years and no one has made any 
objection," the CO replied "[d]oes not matter- if you do not receive approval, not 
acceptable." (R4, tab 61) Despite this disagreement between KBRSI and the government 
2 

(both DCAA and the CO), the Army has not, to date, disallowed any costs under the 
LOGCAP III contract that were invoiced and paid based on KBRSI' s interpretation of Clause 
H-29, and has not adopted DCAA's position in Form 1, No. 173 (compl. and answer~ 40; 
Egan decl. ~ 6). 
6. In September 2012, a qui tam case filed against KBRSI in the Central District of 
Illinois under the False Claims Act was unsealed. The allegations in that case specifically 
concern KBRSI falsely billing the government for costs associated with mobilization and 
demobilization of contractor personnel who had been deployed less than 179 days. (App. 
opp'n at 3) The United States Department of Justice has not intervened in this matter to date 
(gov't mot. at 6). 
7. KBRSI submitted a claim to the CO on 1 October 2012, seeking the CO's 
interpretation of Clause H-29. KBRSI expressed its view that the language of Clause H-29 as 
to rotation of employees meant that when KBR voluntarily rotated employees deployed less 
than 179 days, KBRSI would have to shoulder those expenses, but when employees "departed 
theater less than 179 days after deployment," for other reasons not involving the discretion of 
KBRSI, the cost for KBRSI to replace them could be an allowable cost under the contract. 
(R4, tab 63 at 2) 
8. On 13 December 2012, the CO advised KBRSI that he considered the claim to be a 
"zero dollar claim," not one for contract interpretation as KBRSI alleged, with inadequate 
detail, no statement of a sum certain, and no certification. The CO noted that even if it was 
viewed as a claim for contract interpretation, he could not issue a decision "as long as the 
larger decision regarding the Form 1 #173 ... remains unsettled." Consequently, the CO 
rejected the claim. (R4, tab 68) KBRSI appealed to the Board on 4 March 2013, treating the 
CO's response as a deemed denial. 
DECISION 
The government originally moved to dismiss for lack of jurisdiction on the basis that 
KBRSI' s claim was not one for contract interpretation as KBRSI alleges, but really a 
monetary claim, uncertified and thus invalid. The government also moved to dismiss for lack 
of jurisdiction based on "prudential considerations." (Gov't mot. at 8-12) In later briefing on 
the motion, the government withdrew its first position (gov't reply br. at 1 ), and the parties 
now agree that KBRSI's claim is a non-monetary claim for contract interpretation. However, 
the government now asserts that KBRSI, in replying to the government's motion, has taken a 
position in litigation that amounts to an abandonment of its originally-filed claim and an 
assertion of a new claim not previously presented to the CO, and thus the appeal should be 
dismissed for lack of jurisdiction. The government continues to argue, in the alternative, that 
the appeal should be dismissed for prudential considerations. As noted above, KBRSI 
opposes both points. 
3 

Abandonment of Claim 
The government argues that the contract interpretation issue sought by KBRSI, as 
stated in its opposition to the motion to dismiss, is "significantly narrower" than the issue 
KBRSI raised in its claim and complaint. Specifically, the government asserts that KBRSI is 
now asking for an interpretation of the meaning of the word "rotate," whereas the claim and 
complaint focus on interpretations as to compensation, such as reimbursement or cost 
allowability. Because of this distinction, the government argues the current appeal should be 
dismissed and KBRSI should submit a new claim to the CO as to the "freestanding" 
interpretation of the word "rotate." (Gov't reply hr. at 1-2) KBRSI, in contrast, contends that 
the claim did in fact seek interpretation of the word "rotate," and that there is nothing "new or 
novel" about KBRSI's position before the Board that differs from the claim originally 
submitted to the CO (app. sur-reply, passim and at 6). 
We agree with KBRSI, and deny the government's motion to dismiss based on this 
theory. As KBRSI points out, the entire thrust of its claim relates to rotated employees and 
the reason for such rotation. KBRSI' s claim repeatedly stated the contractor's view that when 
employees "departed theater less than 179 days after deployment" for reasons other than the 
discretion ofKBRSI, this was not "rotation" under the clause, and compensation could thus 
be possible (SOF ,-r 7). Although KBRSI' s claim often referred to allowability and 
reimbursement, this was in the context of how KBRSI thought the clause should be 
interpreted. The CO clearly was on notice of KBRSI' s request for interpretation, and 
regardless of terms related to compensation, the "rotation" issue was in fact fairly presented 
to the government. Nothing KBRSI said in its response to the government's motion changes 
this. KBRSI's opposition brief may refine the focus, but it does not abandon KBRSI's 
existing claim or assert a new claim. 
Prudential Considerations 
The government argues that the Board has discretion to dismiss the appeal for 
"prudential considerations," and that this should be done under the standards articulated by 
the Federal Circuit in Alliant Techsys., Inc. v. United States, 178 F.3d 1260 (Fed. Cir. 1999). 
In Alliant, the court noted that claims for contract interpretation, essentially calling for 
declaratory judgments, can lead to piecemeal and/or premature litigation that could justify 
dismissal. The Federal Circuit stated that "the court or board is free to consider the 
appropriateness of declaratory relief," including assessing 1) whether the claim involves a 
live dispute between the parties, 2) whether a declaratory judgment will resolve the dispute, 
and 3) whether the legal remedies available to the claimant are adequate to protect its 
interests. !d. at 1270-71. As part of its analysis of the issue, the Federal Circuit noted that, 
under the Contract Disputes Act (CDA), Congress "granted relatively free access" to the 
boards of contract appeals and the Court of Federal Claims, and that the FAR also 
implemented a scheme where review of claims would be "relatively easy to obtain." Given 
4 

that context and the specifics of the case, the Federal Circuit held that the Court of Federal 
Claims_ did not abuse its discretion by entertaining Alliant's request for declaratory relief. !d. 
KBRSI and the government address the Alliant standards from opposite perspectives. 
The government first argues that KBRSI' s claim does not involve a live dispute fundamental 
to the contract because the Army has not actually disallowed any travel costs that KBRSI 
has 
invoiced for, and the dispute to date has been with DCAA, not the Army. As to the qui tam 
case, the Army points out that the Department of Justice has not intervened in that litigation 
and in any event, KBRSI can litigate the contract interpretation issue there, rather than at the 
Board (gov't mot. at 9 n. *). Second, the government argues that a declaratory ruling as to the 
meaning of Clause H-29 and the word "rotate" would not resolve the dispute because of the 
interplay of other clauses and specific facts of each employee's situation (gov't mot. at 10-11 ). 
Third, the government argues that KBRSI has an adequate legal remedy to protect its interests 
because it can pursue a monetary claim in the event the government ultimately disallows the 
costs (gov't mot. at 9, 12). 
KBRSI counters that a pre-existing dispute is not necessary for requests for contract 
interpretation, and, in any event, there is a dispute, as evidenced by, among other things, the 
CO's comments about KBRSI's "bad assumption" and the pending qui tam case. KBRSI also 
contends that the Alliant factors for retaining the appeal are met because of issues relating to 
the LOGCAP III and IV contracts. With regard to LOGCAP IV, KBRSI states that the way 
in which KBRSI accounts for and 
bills for personnel demobilizing from theater may be 
altered depending on the proper interpretation of the clause. As to LOGCAP III, KBRSI 
asserts that, although it is no longer demobilizing personnel under that contract, the 
government has not finalized any ofKBRSI's incurred costs since 2003, leaving eight years 
of performance under the contract subject to audit and further controversy on this issue 
(app. br. at 5-6, 8-10). These respective arguments are addressed in order below. 
A. Is There a Live Dispute? 
Here there is a disagreement on a contract issue that remains unresolved for 
finalization of incurred costs. Even if the CO has not yet determined that the costs are 
unallowable and made a demand for 
payment, DCAA has stated that it "disapproved" the 
costs, and more years' audits as to the same issue are being conducted. The CO has stated 
that KBRSI' s view was a "bad assumption" - whether as to the meaning of the clause or the 
CO's agreement with that meaning or both (SOF ~~ 4, 5)- and noted that "the larger decision 
regarding Form 1 # 173 ... remains unsettled" (SOF ~ 8). It is obvious the disagreement is not 
going away. It is true that the matter does not involve the type of situation that arose in 
Alliant as to whether a contractor was required to perform at all, as opposed to what payment 
is appropriate for that performance. However, the disagreement clearly exists, it has 
significant ramifications, and it is continuing to impact appellant. This constitutes enough of 
a dispute to meet the first prong of Alliant. 
5 

By way of analogy, TRW, Inc., ASBCA Nos. 51172, 51530, 99-2 BCA ~ 30,407, also 
supports this conclusion. In that case, the Board addressed the issue of what is a premature 
claim, although not using the Alliant factors as that decision was issued only three days 
earlier. The Board concluded that even though the government had not yet disallowed the 
costs and in fact was currently paying them did not make the issue premature or academic. 
!d. at 150,330. "The matters at issue involve numerous contracts, appellant's ongoing 
application of the cost principles at issue, its potential liability for damages and penalties 
under the False Claims Act, and ... the requirement to change its cost accounting practices if 
its interpretation ... prove[s] to be incorrect." !d. at 150,331. The facts in TRW present 
enough of a parallel to support our decision to retain jurisdiction. See also Martin Marietta 
Corp., ASBCA No. 38920, 90-1 BCA ~ 22,418 at 112,608 (though decision pre-dated Alliant, 
Board retained jurisdiction even though the government had so far allowed recovery of the 
costs in question). 
B. Would a Declaratory Judgment Resolve the Dispute? 
To address whether a Board decision would resolve the dispute, we look at the three 
examples KBRSI proffers: LOGCAP III closeout, the qui tam case, and LOGCAP IV 
performance. Concerning LOGCAP III, DCAA is conducting numerous audits on the 
contract for other fiscal years and the CO has recognized the issue is "unsettled" (SOF 
~~ 4, 8). Leaving the issue unresolved will simply magnify the potential impact if with each 
year's audit there is a successive disapproval. Interpreting Clause H-29 would provide the 
framework for proper application of the facts by the parties and resolution of the 
disagreement. Although the qui tam case and the LOGCAP IV contract do not drive this 
analysis, they do contribute to it. Both involve 
the same clause for interpretation as this 
appeal, and reflect the increasing expansion of the issue's impact. Declining jurisdiction 
simply prolongs the uncertainty. 1 
The government cites Public Warehousing Co., K.S.C., ASBCA No. 56116,09-2 BCA 
~ 34,264 (PWC), to support its view that the appeal should be dismissed for prudential 
considerations (gov't reply br. at 3-4). In PWC, the Board dismissed the appeal for not 
meeting the second Alliant factor. In that case, PWC's claim asked for the CO's 
interpretation as to whether PWC was required 
under a certain clause to return to the 
government any prompt or early payment discounts it received from its suppliers. The 
government had responded that 
"only 'genuine and legitimate bona fide early payment 
discounts"' could be retained, and gave a list of six conditions for making that determination. 
The Board agreed with the government that ruling on whether PWC could retain early 
payment discounts might well not resolve the dispute because it would not address the 
"genuine and legitimate" nature of those discounts or the conditions (if valid) established by 
the CO. !d. at 169,301-02. 
1 With regard to the qui tam case, the use the District Court makes of a future Board decision 
on the interpretation of the clause is up to that forum. 
6 

The government argues that the current appeal is similar in that a fact-specific inquiry 
would be necessary to resolve each instance of cost incurrence, making the issue too involved 
for resolution via an abstract interpretation of the contract (gov't mot. at 10-11 ). In contrast, 
KBRSI asserts that one need not explore each factual situation that the clause could 
potentially apply to in order to understand what Clause H-29 means (app. opp'n at 11-12). 
We agree with KBRSI and consider the present situation to be different from PWC. Here, an 
interpretation of Clause H-29 would go a long way toward resolving the issue, even if it does 
not automatically dictate the result in every employee's situation. Whatever fact-specific 
analysis may still be necessary, having the framework for that analysis is fundamental to 
moving forward. See Martin Marietta, 90-1 BCA ~ 22,418 at 112,609 (despite being paid 
certain home office cost allocations, contractor "is entitled to know where it stands" on the 
issue of whether those cost allocations involved a change in accounting practice). 
C. Is There an Adequate Legal Remedy to Protect KBRSI's Interests? 
The government has argued that KBRSI has an adequate legal remedy to protect its 
interests because it can pursue a monetary claim in the event the government ultimately 
disallows the costs. Here, however, the determination of disallowance and resultant demand 
for re-payment under FAR Part 32.6 would be a government claim not a contractor claim. 
See Fiber Materials, Inc., ASBCA No. 53616, 07-1 BCA ~ 33,563 at 166,251 (government 
cost disallowance, via a unilateral rate determination, was a government claim). The 
government is therefore in control of the timing of this alternate, "adequate legal remedy." It 
has already been several years since the interpretation issue arose, and the government has 
given no indication as to when KBRSI could expect a determination by the CO. Forcing 
KBRSI to wait for an unknown amount of time undercuts the point of contract interpretation: 
that parties need not always await down-stream money consequences, continuing to operate 
in a realm of uncertainty, when issues of contract interpretation arise. Such an approach also 
does not harmonize well with the CD A's purpose of granting "relatively free access to the 
boards of contract appeals" or the FAR's scheme that "review of contract claims will be 
relatively easy to obtain." Alliant, 178 F .3d at 1270-71. 
Taking all the circumstances together, we exercise our discretion and retain 
jurisdiction. 
7 

CONCLUSION 
For the 
reasons set forth above, the government's motion to dismiss is denied. 
Dated: 9 September 20 13 
I concur 
e~;t4c 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
E~'£.~ 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
Admini rative Judge 
Acting 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 No. 58578, Appeal of Kellogg 
Brown & Root Services, Inc., rendered in conformance with the Board's Charter. 
Dated: 
8 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals