Kellogg Brown & Root Services, Inc.
Docket: ASBCA 56358, ASBCA 57151
Decision date: 2014-06-17

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeals of -- ) 
) 
Kellogg Brown & Root Services, Inc. ) 
) 
) 
Under Contract No. DAAA09-02-D-0007 ) 
APPEARANCES FOR THE APPELLANT: 
APPEARANCES FOR THE GOVERNMENT: 
ASBCA Nos. 56358, 57151 
57327,58559 
Jason N. W orkmaster, Esq. 
Herbert L. Fenster, Esq. 
Raymond B. Biagini, Esq. 
Daniel L. Russell, Jr., Esq. 
Alejandro L. Sarria, Esq. 
John W. Sorrenti, Esq. 
McKenna Long & Aldridge LLP 
Washington, DC 
Raymond M. Saunders, Esq. 
Army Chief Trial Attorney 
Stephanie B. Magnell, Esq. 
MAJ Samuel E. Gregory, JA 
Trial Attorneys 
OPINION BY ADMINISTRATIVE JUDGE FREEMAN 
In ASBCA Nos. 56358, 57151and57327, Kellogg Brown & Root Services, Inc., 
(KBRS) appeals the deemed denial of its claims under the Contract Disputes Act of 1978 
(CDA), 41 U.S.C. §§ 7101-7109, for funds totaling $44,059,024.49 withheld by the 
government from KBRS' invoices under the captioned cost-reimbursement contract 
(hereinafter "Contract 0007"). The government's reason for the withholding was that the 
funds at issue had been previously paid to KBRS for costs of private security companies 
(PSCs) which the government has subsequently alleged were unallowable under the 
terms of the contract. In ASBCA No. 58559, KBRS appeals a final decision of the 
contracting officer asserting a government claim against KBRS under the CDA for the 
allegedly unallowable PSC costs in the total amount of$55,620,591.55. The appeals 
were consolidated for hearing. A hearing was held for 24 days, with 
24 witnesses and 
more than 3 7 ,000 pages of documents admitted in evidence. We sustain the appeals in 
ASBCA Nos. 56358, 57151and57327 in the total amount claimed plus CDA interest. 
We dismiss the appeal in ASBCA No. 58559 for lack of jurisdiction. 

FINDINGS OF FACT 
1. We assume familiarity with our decision in Kellogg Brown & Root Services, 
Inc., ASBCA No. 56358, 12-1BCA~35,001. 
2. On 14 December 2001, the Army Operations Support Command, Rock Island, 
Illinois, awarded Contract 0007 to "BROWN & ROOT SERVICES, DIV OF 
KELLOGG, BROWN & ROOT, INC" (R4, 1 tab 1 at 1 ). After award the contractor 
changed its name to Kellogg Brown & Root Services, Inc., and the procuring agency had 
several name changes. In this decision, we refer to the contractor at all times as KBRS 
and to the procuring agency as "Rock Island." 
Pertinent Terms and Conditions of Contract 0007 
and Task Orders Issued Thereunder 
3. Contract 0007 was a cost-plus-award-fee, indefinite quantity, indefinite 
delivery contract with a base period of one year and nine one-year option periods 
thereafter (R4, tab 1 at 5-26). Contract 0007 was part of the U.S. Army's Logistics Civil 
Augmentation Program (LOGCAP) and is also referred to as the LOGCAP III contract. 
LOGCAP was a program for civilian contractors to "provide the Army with an additional 
means to adequately support the current and programmed force by performing selected 
services in wartime and other operations" (id. at 56). 
4. Contract 0007 included among other general provisions, the FAR 52.211-15, 
DEFENSE PRIORITY AND ALLOCATION REQUIREMENTS (SEP 1990) clause (hereinafter "the 
DPA clause"); and the FAR 52.216-7, ALLOWABLE COST AND PAYMENT (MAR2000) 
clause (hereinafter "the Allowable Cost clause") (R4, tab 1 at 3 7). 
5. The DP A clause stated: "This is a rated order certified for national defense use, 
and the Contractor shall follow all the requirements of the Defense Priorities and 
Allocations Systems regulation ( 15 CFR 700)." The cited regulation stated in pertinent 
part: 
§ 700.3 Priority ratings and rated orders. 
(a) Rated orders are identified by a priority 
rating .... Rated orders take preference over all unrated orders 
as necessary to meet delivery dates .... 
(b) Persons receiving rated orders must give them 
preferential treatment as required by this regulation. This 
1 
We cite to the Rule 4 file in ASBCA No. 56358, unless otherwise noted. 
2 

means a person must accept and fill a rated order for items 
that the person normally supplies .... 
( c) All rated orders must be scheduled to the extent 
possible to ensure delivery by the required delivery date. 
§ 700. 7 Compliance 
(a) Compliance with the provisions of this 
regulation .. .is required by the Defense Production Act .... 
Violators are subject to criminal penalties. 
6. The Allowable Cost clause of Contract 0007 stated in pertinent part: 
(a) Invoicing. The Government shall make payments 
to the Contractor when requested as work progresses .. .in 
amounts determined to be allowable by the Contracting 
Officer in accordance with Subpart 31.2 of the Federal 
Acquisition Regulation (FAR) in effect on the date of this 
contract and the terms of this contract. 
7. FAR 31.201-2, Determining allowability, in effect on 14 December 2001 stated 
in pertinent part: 
(a) The factors to be considered in determining 
whether a cost is allowable include the following: 
(I) Reasonableness. 
(2) Allocability. 
(3) Standards promulgated by the CAS Board, if 
applicable; otherwise, generally accepted accounting 
principles and practices appropriate to the particular 
circumstances. 
(4) Terms of the contract. 
(5) Any limitations set forth in this subpart. 
3 

8. FAR 31.201-3 Determining reasonableness, in effect on 14 December 2001 
stated in pertinent part: 
(a) A cost is reasonable if, in its nature and amount, it 
does not exceed that which would be incurred by a prudent 
person in the conduct of competitive business .... 
(b) What is reasonable depends upon a variety of 
considerations and circumstances, including -
( 1) Whether it is the type of cost generally recognized 
as ordinary and necessary for the conduct of the contractor's 
business or the contract performance; 
(2) Generally accepted sound business practices, 
arm's-length bargaining, and Federal and State laws and 
regulations; 
(3) The contractor's responsibilities to the 
Government, other customers, the owners of the business, 
employees, and the public at large; and 
(4) Any significant deviations from the contractor's 
established practices. 
9. Contract 0007 also included a "Section H, Special Contract Requirements -
continued" that stated in pertinent part: 
Special Provisions for Peacetime Contracts 
This general guidance addresses the deployment of contractor 
personnel into a theater of operations in support of a 
contingency or exercise. 
The general guidance provided by this provision is not 
all-inclusive nor are all items required for all situations. Each 
contingency will evolve differently depending upon theatre 
commander's guidance impacting on the deployment. The 
Contracting Officer may tailor these provisions as appropriate 
for individual task orders. 
4 

In the event that the contractor deploys individuals into the 
area of operations in support of a contingency or exercise, the 
following conditions may apply: 
H-13 Management 
• The contractor shall ensure that all personnel hired by or 
for the contractor will comply with all guidance, 
instructions, and general orders applicable to the U.S. 
Armed Forces and DoD civilians as issued by the Theater 
Commander or his/her representative. This will include 
any and all guidance and instructions issued based upon the 
need to ensure mission accomplishment, force protection, 
and safety, unless directed otherwise in the task order 
sow. 
• The contracting officer is the only authorized official who 
shall increase, decrease, or alter the scope of work to be 
performed .... 
• The contractor shall comply, and ensure that all deployed 
employees, subcontractors, subcontractors employees, 
invitees and agents comply with pertinent Service and 
Department of Defense directives, policies, and 
procedures, as well as federal statutes, judicial 
interpretations and international agreements .... Host Nation 
laws .... may take precedence over contract requirements. 
H-16 Force Protection 
• While performing 
duties [in accordance with] the terms 
and conditions of the contract, the Service Theater 
Commander will provide force protection to contractor 
employees commensurate with that given to 
Service/Agency (e.g. Army, Navy, Air Force, Marine, 
DLA) civilians in the operations area unless otherwise 
stated in each task order. 
5 

H-21 Weapons and Training 
• Whether contractor personnel will be permitted to carry a 
government furnished weapon for self-defense purposes in 
the Area of Operations (AO) is at the discretion of the 
Theater Commander. However, Contractor personnel will 
not possess personally owned firearms in the AO. The 
government may at its discretion issue weapons and 
ammunition (M9 Pistols) for self-defense to the contractor 
employees ... .If accepted the contractor will maintain a 
listing of employees possessing a government firearm and 
provide notification to the Contracting Officer .... Also 
when accepted, only military issued ammunition may be 
used in the weapon. 
• Prior to issuing any weapons to contractor employees, the 
government at its discretion may provide 
the contractor 
employees with weapons familiarization training 
commensurate to training provided to Department of 
Defense civilian employees. 
• The contractor shall ensure that its employees adhere to all 
guidance and orders issued by the Theater Commander or 
his/her representative regarding possession, use, safety, 
and accountability of weapons and ammunition. 
• Upon redeployment or notification by the government, the 
contractor shall ensure that all government issued weapons 
and ammunition are returned to government control. 
• Contractors will screen employees, and subcontractors, to 
ensure that employees may be issued a weapon in 
accordance with U.S. or applicable host nation laws. 
Evidence of screening will be presented to the contracting 
officer. 
(R4, tab 1 at 96-98, 101-02) 
10. Section 1.3. l of the Contract 0007 Statement of Work (SOW) stated in 
pertinent part that: "All work to be performed shall be awarded by individual task 
orders" (R4, tab 1 at 56). Section 7.1 of the Contract 0007 SOW stated in pertinent part: 
6 

7.1 General. The Contractor is obligated to follow and 
adhere to the Governing directives and applicable documents 
as listed in the contract and the SOW. Supplements or 
amendments to those documents shall be considered to be in 
full force and effect upon receipt by the Contractor, except 
when such document is deemed to cause an increase or 
decrease in the cost of contract performance. In such event, 
the Contractor shall inform the Contracting Officer in writing 
prior to implementation of such supplement or change. If 
applicable, a negotiated change in contract price shall be 
made to the mutual satisfaction of both the Contractor and 
Government prior to implementation of the change. 
(R4, tab 1 at 79) 
11. Following the invasion and occupation of Iraq in March 2003, Rock Island 
issued a number of task orders under Contract 0007 for logistic and life-support services 
for the coalition combat forces at designated sites in Iraq. The life-support services 
included, among other things, billeting and food service operations. (R4, tab 3 at 14-49) 
Task Order (TO) 59, effective 24 June 2003, with an initial total ceiling price of 
$802,065,733 and its successor TO 89 effective 1 May 2005, with an initial total ceiling 
price of $4,972,882,216, were the largest cost-plus-award-fee task orders by dollar 
amount for these services in Iraq during the years 2003-2006 (R4, tab 3 at 1-2, tab 5 at 
1-2). 
12. From September 2004 to May 2010 Mr. James Loehrl, a senior executive at 
Rock Island, was responsible for the Contract 0007 task order procurements (tr. 10/7). At 
hearing he described the scope of TO 59 as follows: 
Task Order 59 to the best of my recollection encompassed all 
of the support, logistics support, in Iraq minus some of the 
theater transportation mission .... That was under task order 44. 
Also there was some performance that was specific to 
the State Department in the Green Zone that it didn't cover. 
And there were some task orders in support of ... the Intel 
folks that were based at Camp Victory that were on a separate 
7 

(Tr. 10/57) 
task order. Basically, all of the baseline support in Iraq minus 
those things is what it covered. 
13. Paragraph 1.10 in Change 5 to the TO 59 SOW, effective 27 August 2003, 
stated: "Contractor Force Protection. The government will provide for the security of 
contractor personnel in convoys and on site, commensurate with the threat, and [in 
accordance with] the applicable Theater Anti-Terrorism/Force Protection guidelines." 
(R4, tab 3 at 99) Paragraph 1.7 of the TO 89 SOW issued on 1 May 2005 stated: 
"Contractor Force Protection. The Government will provide for the force protection 
and 
security of contractor personnel in convoys and on site, commensurate with the threat, 
and [in accordance with] the applicable Theater Anti-Terrorism/Force Protection 
guidelines." (R4, tab 5 at 1, 16) 
The Need for PSCs to Supplement Government Force Protection 
for Government Contractors and Subcontractors in Iraq 
14. On 27 June 2003, a KBRS employee was shot and injured while traveling in a 
motor vehicle convoy in southern Iraq. By email of the same date, the KBRS contracts 
manager (Ms. Mary Wade) told the lead Rock Island procurement contracting officer 
(PCO) for Contract 0007 (Ms. Mary Beth Watkins) 2 that: 
This incident underscores the threat to U.S. personnel 
identified in the ... classified message that informed cleared 
KBR personnel that movement along the MSR [Main Supply 
Route] in IRAQ, particularly during the next 72 hrs, poses a 
significant risk to both personnel and materiel for all US 
personnel. 
As a result of this incident as well as the threat conditions 
identified in the message, safety and security considerations 
mandate that movement of KBR and subcontractor vehicle 
convoys be delayed until such time as the U.S. Government 
provides force protection assets adequate to the threat level. 
KBR is acutely aware that time is of the essence in providing 
food service support to V Corps, however, failure of the U.S. 
Government to provide adequate Force Protection in 
2 Ms. Watkins was the Rock Island lead PCO for Contract 0007 from the date of award 
(R4, tab 1 at 1) to October 2004 (tr. 5/142). During that period, she was never in 
Iraq (tr. 4/170). 
8 

(Ex. A-23) 
accordance [with] the LOGCAP III Contract is impacting our 
ability to perform. 
15. On 28 June 2003, a KBRS subcontractor's convoy was attacked with two 
drivers killed, four missing and six trucks destroyed. This incident was reported on 
1 July 2003 by KBRS to the Rock Island PCO in an email chain which included the 
information that: 
2. Military has decided to escort convoys but it appears it 
will take a little time to lash up the movement 
requirement, the convoys, and escort. 
3. Some subcontractors have security, others do not. Main 
reason for no security is the inability to get permits to 
arm their security personnel. 
(Ex. A-24 at 1, 2) 
16. The Coalition Forces Land Component Command (CFLCC) was the military 
command responsible for the movement of logistical supplies from Kuwait into Iraq. 
The Deputy Commanding General ofCFLCC from June 2003 to July 2004 was, 
Major General (MG) Stephen Speakes. At hearing, MG Speakes described the contractor 
convoy security situation in Iraq in June 2003 as follows: 
I had arrived in late June. It was obvious to me very quickly 
that we were taking new levels of threat to our supply and 
relief formations across Iraq, some situations more serious 
than others, and that we had to be very thoughtful about how 
we organized and supported convoys. 
And so early on what I asked our theater to do is to give a 
thoughtful examination to options. And the options that I 
outlined ranged the spectrum of capability. Most desirable, 
frankly, would be more combat support capability units be 
dedicated to the mission .... 
The other thing I wanted to do is look at expanding our 
capability by missioning [sic] more units to provide the 
capability. And the other thing that I early on had said is let's 
9 

look at the potential for some form of the hired contractual 
capability. 
(Tr. 8/8, 49-50) 
17. On 3 July 2003, the KBRS contract manager (Ms. Wade) notified the 
Rock Island PCO (Ms. Watkins) that over 1,000 trucks were awaiting convoy support 
into Iraq at 
the NAVISTAR staging area in Kuwait. The message described the materials 
being transported and concluded that if not delivered, "the other missions that are 
dependent on the Truck Driver providing the transportation will come to a screeching halt 
and the Client as well as KBR, will be in jeopardy of mission failure." (Ex. A-27) 
18. The Rock Island PCO referred this message to the Rock Island operations 
personnel with the comment that: "The lack of required force protecting [sic] is having 
direct mission impact and needs resolution soonest. The contractor will have grounds for 
government caused delay, but more importantly the mission needs of the warfighter are in 
jeopardy of not being met. Request theater assistance to resolve." At hearing, 
Ms. Watkins testified that 
up until the time she left the contract as PCO in the fall of 
2004, "there were continued force protection issues." (Ex. A-27; tr. 41199-201, 204) 
19. On 9 July 2003, KBRS met with MG Speakes and reported that the personnel 
and equipment casualties from attacks on its convoys and those of its subcontractors 
from mid-May to date were 7 killed, 7 wounded, 4 missing and 10 trucks missing. 
MG Speakes noted, among other things that: "Tomorrow the government will provide 
convoy protection for 46% of the convoys waiting to travel north. This level of support 
must increase, but presently the government is short convoy escort vehicles and shooters 
(shotgun riders)." The parties discussed KBRS contracting for private security, and 
agreed that "LOGCAP Planners will develop a revised statement of work requesting 
contracted security." (Ex. A-29 at 1, 3) 
20. On 19 September 2003, MG Speakes sent the following message and formal 
request to the Rock Island Commander with copies to, among others, the Deputy 
Commanding General and senior logistics staff officer of CJTF-7 :3 
Subject: CFLCC Request for Help with LOGCAP Contractor 
Convoy Security. 
3 Combined Joint Task Force-7 (CJTF-7) was the initial designation of the coalition military 
forces in Iraq (tr. 5/188-89). On 15 May 2004, the designation was changed to Multi 
National Force-Iraq (MNF-I) (ex. G-173). CJTF-7 and MNF-I 
reported to the Theater 
Commander, CENTCOM (tr. 8/17). 
10 

[I]n message below we request your help in solving one of 
our most vexing problems, specifically convoy security for 
contracted operations in Iraq .... [W]e see no other optoin [sic] 
but to ask that the current contract provisoins [sic] be 
amended to support operations in Iraq. We appreciate your 
support and hope that this is a request that is supportable .... 
MEMORANDUM FOR Commander, Army Field Support 
Command. Rock Island, Il 61299 
SUBJECT: Adequate Force Protection for the Logistics Civil 
Augmentation Program (LOGCAP) Convoys in Kuwait and 
Iraq 
1. Request Army Field Support Command (AFSC) review 
the basic LOGCAP contract and 
provide a contractual 
recommendation allowing Kellogg Brown & Root (KBR) the 
authorization to pursue a civilian transport and transportation 
security company to conduct convoy escorts missions for the 
execution of convoys in Iraq during the movement of 
government materiel on theater supply routes. The current 
force protection posture, pending reductions in force 
structure, present and future demands for military police 
forces, all support the need to explore options other than 
military escorts in order to conduct secure and unhindered 
convoy operations. 
2. The LOGCAP Basic contract and Statements of Work 
(SOW) needs to be modified to allow for KBR to provide 
contract security for their convoys moving government 
materiel on theater supply routes in Kuwait and Iraq. This 
change to authorization and utilization of contracted security 
should be in compliance with US Federal and Military 
Regulations that established the current base contract. 
3. The contract should be administered by KBR or its 
subcontractor, with standards and operating procedures in 
accordance with the senior military police organization in 
theater. The scope of operations or task execution plan will 
be developed by KBR and accepted through the appropriate 
contracting and command channels. 
11 

4. We understand that there will be legal and perception 
concerns in the use of contracted security, but with pending 
reductions in force structure, present and future demands on 
contractor support, we must ensure unimpeded flow of 
supplies. We believe this is a viable course of action. 
(Ex. A-41 at 3-5) 
21. MG Speakes expected that Rock Island would prepare a proposal for contract 
modification 
that he could submit for approval by the CJTF-7 combat commander in Iraq 
and the Theater Commander at CENTCOM. However, he testified: "Despite my 
repeated 
efforts, to my knowledge I never got a formal proposal back, and I never was 
able to take anything and formally bring it up to a higher staff to ask for their help." 
(Tr. 8/55-56) 
22. On 26 September 2003, CJTF-7 Fragmentary Operations Order (FRAGO) 889 
described the current convoy security situation in pertinent part as follows: 
BA'ATH PARTY SECURITY FORCE ELEMENTS, 
RELIGIOUS EXTREMISTS/FOREIGN TERRORISTS, 
AND CRIMINAL ELEMENTS CONTINUE TO A TT ACK 
INDIVIDUAL OR SQUAD-SIZED UNITS WITH SMALL 
ARMS, RPGS, OR SNIPER FIRE AGAINST CONVOYS 
AND CRITICAL NODES IN THE CJTF-7 AOR. THERE 
CONTINUES TO BE NUMEROUS ATTACKS ALONG 
MSR TAMP A BETWEEN CSC NAVISTAR AND LSA 
ANACONDA .... IT IS ASSESSED THAT THESE SMALL 
GROUPS ... OF ARMED INDIVIDUALS WILL 
CONTINUE TO EMERGE. ATTACKS WILL CONTINUE 
DUE TO THE ACCESSIBILITY OF WEAPONS AND 
ABSENCE OF MILITARY PRESENCE IN THE SMALLER 
OUTLYING TOWNS. 
(Ex. A-44 at 1) 
23. On 24 November 2003, the commander of the Defense Contract Management 
Agency (DCMA) activity in Kuwait, CDR Kent Caldwell, USN, sent a message to the 
CFLCC 143rd Transportation Command. The message cited the conflicting standards in 
operation orders (OPORDS) issued by CFLCC and CJTF-7 for convoy protection, and 
further stated in pertinent part: 
12 

As convoy security is contractually required to be provided 
by the government and be consistent with the standards set 
for all DOD civilians, I believe the government is faced with 
an unexecutable task. As I understand it, they are no longer 
resourced to comply with either standard, especially when 
you consider that contractors cannot carry weapons. Their 
need for external security is greater [than] that of armed 
soldiers moving in military convoys for which the majority of 
the guidance found in both OPORD's applies. 
While I understand and appreciate the resource 
restrictions on both soldiers and government equipment to 
perform the missions assumed by KBR under the LOGCAP 
III contract, the Army has entered into a contract with KBR 
and is apparently unable to provide the requisite security and 
protection requirements established by either CFLCC or 
CJTF- 7. If uncorrected this will significantly impact the fuel, 
line haul, mail, and Class 1 transportation mission areas 
supported under this contract. 
(Ex. A-56 at 2) 
24. On 19 December 2003, CJTF-7 FRAGO 1242, (KBR Convoy Security 
Procedures) stated in relevant part: 
ATTACKS AGAINST KELLOGG, BROWN AND ROOT 
(KBR) CONVOYS HAVE DRAMATICALLY 
INCREASED DURING THE MONTHS OF OCTOBER 
AND NOVEMBER. BASED UPON INTELLIGENCE 
ESTIMATES, THE THREAT OF FUTURE ATTACKS 
AGAINST KBR CONVOYS IS PROJECTED TO 
INCREASE DURING THE MONTHS OF DECEMBER 
2003 THROUGH APRIL 2004 .... SINCE THE BEGINNING 
OF OCTOBER, TH[E] MAJORITY OF ATTACKS 
AGAINST KBR CONVOYS HA VE BEEN THE RESULT 
OF IEDS AND SMALL ARMS FIRE. NINETY PERCENT 
OF ALL ATTACKS DIRECTED SPECIFICALLY 
AGAINST KBR CONVOYS HA VE OCCURRED ON MSR 
TAMPA. HOWEVER, SEGMENTS OF ASR JACKSON, 
MSR MICHIGAN, MSR MIL TON AND MSR MOBILE 
REMAIN EXTREMELY DANGEROUS TO KBR 
13 

CONVOYS. KBR CONVOYS REMAIN EXTREMELY 
VULNERABLE TO ATTACKS AT REST STOPS, REFUEL 
POINTS, TRAFFIC CHOKE POINTS, LOCATIONS OF 
VEHICLE BREAKDOWNS, HAND-OFF POINTS FOR 
CONVOY 
SECURITY ESCORTS, MSC BOUNDARY 
LINES ... AND MOVEMENT UNDER OVERHEAD 
PASSES. 
(Ex. A-64 at 2) 
25. On 31 December 2003, the Coalition Provisional Authority (CPA), the civil 
government of Iraq from 8 May 2003 to 30 June 2004,4 recognized the need for and 
authorized the presence of private security companies in Iraq in its Order Number 3 
(Revised) entitled "WEAPONS CONTROL." Section 3 of the order distinguished 
possession of firearms by "Private security firms" from possession of firearms by other 
"Groups" and "individuals" where it stated in pertinent part: 
Authorized Possession and Use of Firearms 
and Military Weapons 
1) The following individuals are authorized to possess and 
use issued Firearms and Military Weapons ... 
a) Coalition Forces, 
b) Iraqi security forces, and 
c) Groups and individuals who have been authorized to 
carry weapons in the course of their duties by the 
CPA or Commander, Coalition Forces or their duly 
authorized delegates. 
2) Private security firms may be licensed by the Ministry of 
the Interior to possess and use licensed Firearms and 
Military Weapons .. .in the course of their duties, 
including in public places. 
3) Individuals may be authorized to possess Firearms for 
personal use by obtaining authorization from the 
4 See United Nations Security Council Document S/2003/538 and Security Council 
Resolutions 1483 (2003) and 1546 (2004). 
14 

(Bd. ex. 2 at 2-3) 
Ministry of Interior, as described in Section 5 of this 
Order, 
26. Lieutenant Colonel (L TC) Damon Walsh was the DCMA Northern Iraq 
Commander 
from August 2003 to January 2004 (tr. 13/106). By letter dated 
14 December 2003, LTC Walsh told KBRS that CJTF-7 was considering options "for 
enhancing the protection of convoys and commercial traffic throughout Iraq" and 
requested KBRS to provide an outline of the conditions and procedures that should be in 
place for the government to issue weapons and ammunition to KBRS employees 
(ex. A-65 at 2). 
27. By letter dated 26 January 2004 addressed to the Rock Island PCO 
(Ms. Watkins), KBRS replied to the 14 December 2003 request. The substance of the 
reply was that: 
KBR has made the decision that the arming of truck drivers as 
a means of self defense to mitigate the dangers facing these 
personnel as they travel the roads of Iraq, is not a viable 
option. However, we do offer an alternative for convoy 
escort security that would free up the military assets currently 
utilized in this mission and enable them to focus on their core 
mission of providing route security. 
With the issuance of indemnification for KBR, and 
acceptance of the concept of operations (att. a) KBR stands 
ready to subcontract out the armed convoy escort for those 
trucks under KBR LOGCAP responsibility and control across 
the Major Supply Routes of Iraq. 
(Ex. A-74 at 8241) 
28. At hearing Ms. Watkins could not recall sending a written reply to the KBRS 
26 January 2004 proposal, but testified that "We discussed and verbally it was 
communicated back to KBR that we were not inclined to indemnify" (tr. 4/213-14). 
29. At hearing, L TC Walsh testified that he interpreted the contract as requiring 
the government to provide the force protection and that KBRS "could not charge the 
government for armed security as the contract stood at that time." However, he also 
testified that: "There was nothing [in the contract or task orders] that specifically said 
thou shalt not use private security companies." (Tr. 13/114) Moreover, when asked 
whether he thought the use of PSCs should have been allowed, he testified: 
15 

A. Yeah, absolutely. 
Q. Why? 
A. Because it was a dangerous place, and I mean I 
was pretty unequivocal from the word go, that I thought a 
better approach to providing security would have been for the 
contractor to be able to either acquire protection through one 
of the, you know, we had an army of private contractors 
running around Iraq .... 
[Q.] Private security contractors? 
[A.] Yes .... 
A. You couldn't swing a dead cat without knocking 
down half a dozen guys walking around with M4s .... [T]o 
answer your question, yes, absolutely I thought that KBR 
should have been able to do that. 
(Tr. 13/175-76) 
30. On 22 February 
2004, the KBRS Deputy Area Manager for V Corps North 
sent the following message to the troop unit that was responsible for force protection in 
that area: 
For your information the military has failed to comply with 
providing escort requirements. Time and time again we have 
sent emails after emails and made phone calls after phone 
calls to get this escort requirement taken care of. As you 
know last week a convoy was arranged for four ( 4) trucks and 
they were abandoned while in route because of the speed of 
travel. I would like to point out this same subcontractor had 
employees shot in a drive by shooting yesterday around B3, 
so they are a marked target. 
It was also briefed on the last [meeting with the government] 
that [the government] would prefer to have at least nine (9) to 
ten (10) trucks in a convoy. We consulted with our 
subcontractor and they hired additional trucks for a total of 
ten (I 0) trucks which are loaded and ready to go, when 
request for convoy was acquired today, KBR was told [the 
16 

government] was not able to provide the escorts due to lack of 
assets and would not have the assets for two to three weeks if 
then. This has directly affected our ability to carry out our 
tasked assigned to KBR by CJTF7, plus is causing the 
subcontractor to occur [sic] unexpected costs. 
(Ex. A-80 at 2) 
31. The government answer to KBRS' 22 February 2004 message was that: 
(i) "these combat units were sent here to fight the war, not do escorts for KBR ONLY"; 
(ii) the tasking placed on the troop unit responsible for providing the force protection was 
"enormous"; and (iii) when the troop unit was ready to resume escort duty, "I will let 
you ... know" (ex. A-80 at 1). 
32. On 12 April 2004, CJTF-7 FRAGO 622 described the current convoy security 
situation as follows: 
THE ENEMY IS PROSECUTING A DELIBERATE 
OPERATION TO INTERDICT OUR LINES OF 
COMMUNICATION (LOC). WITH THE 
SIMULTANEOUS ATTACKS ON SIX OVERPASSES ON 
10-12 APRIL 04, IT IS APP ARENT THE ENEMY HAS 
TAKEN HIS CAMPAIGN BEYOND HARASSMENT 
THROUGH DIRECT ACTION TO A DELIBERATE 
EFFORT FOCUSED ON THEATER LOC 
INTERDICTION. 
CURRENT SITUATION. ALONG MSRS LEADING INTO 
AND OUT OF BAGHDAD THERE HA VE BEEN 66 ATTACKS 
IN THE LAST WEEK, 49 ATTACKS 
ONE WEEK AGO, AND 
50 TWO WEEKS AGO. THERE HA VE BEEN 3 COMPLEX 
ATTACKS/ AMBUSHES IN LAST THREE DAYS RES UL TING 
IN THE DESTRUCTION OF A REFUELING 
CONVOY ... DESTRUCTION OF 4 OVERP ASSES ... AND THE 
AMBUSH OF A CONVOY .... THE MSRS BETWEEN 1) 
BAGHDAD AND BALLAD, 2) BAGHDAD AND KARBALA, 
AND 3) BAGHDAD AND FALLUJAH ARE EXTREMELY 
DANGEROUS AND CONTINUE TO BE HIGHLY 
SUSCEPTIBLE TO THREAT ACTIVITY RANGING FROM 
IEDS TO SMALL ARMS AND RPG ATTACKS/AMBUSHES. 
CURRENT ASSESSMENT: ATTACKS ARE MUCH 
HIGHER THIS WEEK AND UPWARD TREND IS LIKELY 
TO CONTINUE AS A RESULT OF THE CONTINUED 
17 

SADR/MAHDI MILITIA UNREST, AND OPERA TIO NS 
AGAINST THREAT FORCES IN WESTERN IRAQ. 
(Ex. A-96 at 2) 
33. On 14 April 2004, the DCMA administrative contracting officer (ACO) for 
TO 59 (MAJ Hills) reported to the Commander, DCMA Northern Iraq (LTC Blaine) the 
following: 
All indications are that the government has failed to live up to 
its contractual obligation to provide Force Protection (FP) to 
the TTM convoys (T00059). Given that, KBR is currently 
not required to run most (if any) convoy routes. They did run 
three convoys to Anaconda today. Only one made it. The 
other two got lost. They are now at an FOB. KBR may not 
run any convoys tomorrow if the government does not 
improve its track record on FP. The same MP escorts that got 
them lost are to bring the two convoys in to Anaconda 
tomorrow. The best I can tell at this time is that they have 
never ran the route they are about to set out on. Based on my 
discussions with TTM' s PM .. .I went over and talked to the 
13th COSCOM CC .. .I told him ofKBR's concerns. I feel 
contractually the government is not living up to its contractual 
obligations. [The COSCOM Commander] stated that 
COSCOM was doing 
their part by providing a soldier for 
every third truck. He said it was the 15th MP's that were 
providing the escort not COSCOM and that the issue of 
getting lost was ... not a FP issue " ... they are all safe aren't 
they." I just want to go on record that absent any new 
information from the government, I concur with KBR in that 
the government is not providing FP commensurate with the 
threat. If they choose not to run tomorrow I would be hard 
pressed to disagree with them. Oh by the way, one of the 
trucks in one of the lost convoys got destroyed by an IED. 
(Ex. A-98 at 2-3) 
34. On 26 June 2004, CPA Memorandum Number 17 entitled "REGISTRATION 
REQUIREMENTS FOR PRIVATE SECURITY COMPANIES (PSC)" was issued to 
"establish a mechanism whereby all PSC will be registered, regulated and vetted and to 
update Iraqi law as it relates to PSC." The memorandum set forth detailed requirements 
and procedures for licensing, use of force, code of conduct, etc. (Ex. G-189) As of 
18 

25 November 2006, more than 100 PSCs were registered or in the process of being 
registered with the Iraq Ministry of Interior (MOI) (ex. A-154). 
3 5. Lieutenant General (L TG) Ricardo Sanchez was the commanding general of 
CJTF-7 and its successor MNF-I from 14 June 2003 to 4 July 2004 (tr. 5/163, 203). 
When asked at hearing if he had any comment on reports in the press that the Army Chief 
of Staff (General Shinseki) had advised Congress and the President that it would take 
200,000 men to occupy Iraq, L TG Sanchez testified: 
He was about right. And as you' 11 see from the end of my 
description here, it was, as a nation, America did not have 
sufficient capacity to accomplish the tasks that were assigned 
to the force that was on the ground during that time frame. 
(Tr. 5/175-76) When asked whether he had the resources to provide the same level of 
force protection to KBRS as was provided to the civilians in the CPA he replied: "clearly 
not, clearly not" (tr. 6/40). 
36. When asked whether there were any areas in Iraq where it would have been 
acceptable to travel without armed escorts, L TG Sanchez testified: 
[F]rom the very beginning we established a requirement that 
there was an absolute minimum ... standard of force 
protection. We never wavered from that. There was never 
any segment of the country where we said this is benign 
enough, or it's peace time, completely peace time and there is 
not [sic] threat of attack. No, we never did that. 
(Tr. 6/102-03) 
37. With respect to the origin of the need for PSCs in the occupation of Iraq, 
L TG Sanchez testified: 
[T]he key factor is that DOD [Department of Defense] does 
not have the military capacity to secure all of the missions 
Ambassador Bremer hasY 1 It's a massive requirement, 
and ... the numbers of forces that we have on the ground and 
the tremendous challenge that the country has to sustain that 
requirement over time. It's just not there. 
5 Ambassador Bremer was the Administrator of the CPA. 
19 

(Tr. 6/22, 67) 
... [B]ecause of the analysis that we have done in 
the ... fall and early winter of 2003, we very clearly 
established, unequivocally established within the command 
that the capacity of the force, the quantity of the force, and 
the demands of the mission both from a war fighting 
perspective and the growing requirement that we foresaw 
coming from the reconstruction mission, that we were not 
going to be able to continue to support that without private 
security. And then that discussion really got started in earnest 
to integrate private security companies under 
government/military contracts .... 
38. LTG Sanchez estimated that there were at least 10 and possibly 20 PSCs 
operating in Iraq in March 2004 (tr. 6/25). Moreover, their presence in the battle space 
was not merely tolerated, it was welcomed by the combat troop commanders. 
L TG Sanchez testified: 
We allow them to come in, and we encourage them to come 
in at the different levels of command to get situational 
awareness briefings, to briefthem on what is available for 
them in the event that they get into a situation that they can't 
handle. We have quick reaction forces that are in every 
sector that can respond to an incident on the major routes that 
they're operating in . 
... [I]f a private security entity or a contractor came to a 
battalion commander or a brigade commander and asked to 
move with private security, I'm absolutely sure that that 
young commander would have said be my guest. You know, 
that's necessary to accomplish your mission of feeding my 
fellow battalion across the street, go ahead and do it. 
We were not concerned with ... and commanders at that 
level were definitely not concerned with going up to the next 
higher headquarters to brigade or division and say hey, can I 
move this? What they were trying to do was actually get the 
mission done, and the reality of the complexity and the 
20 

density, and the demand that was on the ground at that time 
was basically for them to get the mission done. 
And this was not just in moving a box of tomatoes, it 
was across the board .... [T]he demands that we were placing 
on these young commanders was massive. We were asking 
them to fight, we were asking them to set up local 
governments, local schools. The last thing that they want to 
be doing was diverting their combat power to those kinds of 
missions, so if they saw the opportunity they- clearly, in my 
mind, they would have taken it. And I would not have 
objected to that if that had happened, and not had been told 
about it. 
(Tr. 6/24-25, 35-36) 
39. On 30 June 2004 the CPA was terminated and the Interim Iraq Government 
(IIG) was established as the civil government of Iraq (ex. A-113). On 4 July 2004 
CENTCOM issued a Warning Order (WARNORD) entitled "CONTRACTOR RISK 
MITIGATION" which stated in pertinent part: 
THIS IS AW ARNING ORDER (WARN ORD). REQUEST 
COMMANDER, MNF-1, IN COORDINATION WITH 
CHIEF OF MISSION (COM) AND INTERIM IRAQ 
GOVERNMENT (IIG), DEVELOP COMMANDERS 
ESTIMATE AND COURSES OF ACTION (COAS) FOR 
USG CONTRACTOR RISK MITIGATION IN IRAQ. 
PROVIDE ESTIMATE WITH COAS TO CENTCOM NLT 
13 JULY 2004 .... SITUATION. 1.A. A MAJOR USG 
CONTRACTOR IN IRAQ IS CONSIDERING 
SUSPENDING OPERA TIO NS DUE TO CONCERNS 
OVER THE SECURITY ENVIRONMENT IN IRAQ. THE 
SUCCESS OF US EFFORTS IN IRAQ DEPENDS IN PART 
ON THE ABILITY TO RETAIN AND MANAGE 
CONTRACTORS FOR SERVICES, PROTECTION AND 
CONSTRUCTION. TO DATE, COMMNF-1 HAS NOT 
PROVIDED PROTECTION FOR CONTRACTORS, AS 
CONTRACTOR SECURITY IS NOT A SPECIFIED 
MILITARY MISSION. CONTRACTORS ARE 
PRIMARILY RESPONSIBLE FOR THEIR OWN 
SECURITY, AND CONTRACTOR SELF-PROTECTION 
WAS ASSUMED TO CONTINUE 
BEYOND THE 30 JUNE 
TRANSFER OF POWER. UNSCR 1546 AND THE 
21 

(Id.) 
ANNEXED LETTER BY IRAQ PRIME MINISTER 
ALLA WI GIVE THE MULTI-NATIONAL FORCES THE 
MANDATE TO CONTRIBUTE TO THE MAINTENANCE 
OF A SECURE AND STABLE ENVIRONMENT IN IRAQ. 
THIS INCLUDES THE AUTHORITY TO DEFEND USG 
CONTRACTORS. l .B. GIVEN THE CURRENT 
SECURITY ENVIRONMENT IN IRAQ, ALL USG 
AGENCIES MUST COORDINATE PROTECTION OF 
USG CONTRACTORS THROUGH A COMBINATION OF 
COALITION MILITARY FORCES, IRAQ 
SECURITY 
FORCES AND PRIVATE SECURITY COMPANIES. 
CONTRACTORS CONTINUE TO HA VE THEIR RIGHT 
OF SELF DEFENSE AND MAY, IN SOME 
CIRCUMSTANCES, ARRANGE FOR CONTRACTOR 
SECURITY THROUGH A SUBCONTRACT WITH A 
PRIVATE SECURITY COMPANY. 
40. From 14 March to 21 September 2004, there were 15 reported attacks on 
KBRS subcontractor employees and vehicles at LOGCAP headquarters in Baghdad and 5 
of the "B" worksites. In these attacks, 5 employees were killed, 1 beaten, and 25 were 
missing or held captive. (Ex. G-232 at 5-9) 
41. From June through November 2004, L TC Sean O'Day was Commander, 
DCMA Northern Iraq, responsible for overseeing KBRS' performance of TO 59 in 
northern and western Iraq (tr. 12/8). On 29 August 2004, KBRS notified LTC O'Day and 
others that a subcontractor convoy escorted by an Iraqi private security company had 
been ambushed and three trucks were missing. LTC O'Day answered the notification 
with the following remark: "The question may come back why were these guys using a 
private security detail instead of military escorts." (Ex. A-126 at 2, 4) At hearing, 
LTC O'Day testified: 
Security was always a big issue .... 
.. .It was that security thing that always held them 
[KBRS] up on bringing stuff in .... 
[T]here weren't enough military forces in Iraq to do 
everything that had to be done and convoy security for 
contractors as well as security for somebody like me to get 
22 

around because I didn't have a combat force that was at my 
beckon [sic] call to take me around Iraq. 
(Tr. 12/32-33) 
42. On 31 December 2004, the Multi National Corps-Iraq (MNC-I), the tactical 
troop command under the MNF-I, issued a FRAGO, "SUBJECT: TACTICS, 
TECHNIQUES AND PROCEDURES (TTP) TO REDUCE VEHICLE MOVEMENT 
FRATRICIDE." Paragraph I .A. of this order recognized the presence and usefulness of 
the PSCs in accomplishing the coalition mission in Iraq as follows: 
THERE ARE APPROXIMATELY 30,000 PRIVATE 
SECURITY CONTRACTORS (PSCS) IN ADDITION TO 
MILITARY AND DOD PERSONNEL IN IRAQ 
PERFORMING SECURITY DUTIES IN SUPPORT OF 
MNFI, DEPARTMENT OF STATE (DOS), 
INTERNATIONAL DIPLOMA TIC MISSIONS, AND 
OTHER OPERATIONS VITAL TO THE FUTURE OF 
IRAQ. THEIR MISSIONS INCLUDE SECURING KEY 
COALITION PERSONNEL AND CRITICAL MATERIALS. 
(Ex. A-139 at 1) 
43. On 22 April 2005 the award fee determining official issued his determination 
of the award fee for KBRS' performance of TO 59 from 13 June 2003 to 31 January 
2005. The overall performance rating was excellent. The determining official noted the 
arduous circumstances under which the task order was performed, including among 
others, "the attacks on and hijacking of your convoys" and "a lack of force protection to 
escort convoys with needed materials." (Ex. A-144 at 1-3) 
44. L TC Scott Sheridan succeeded L TC O'Day as Commander DCMA North 
from November 2004 to May 2005 (tr. 12/121-22, 124). At a KBRS briefing in 
December 2004, L TC Sheridan was told that 64 KBRS direct hires and subcontractor 
employees had been killed in hostile action (tr. 12/164). 
45. On 23 April 2005, LTC Sheridan presented a briefing on the award fee 
determination decision for KBRS' performance of TO 59 for the period 1 February to 
30 April 2005. The briefing slides included one for "Special Considerations" with two 
major bullet points-"Operating in a non-permissive environment" and "Availability of 
escorts." Two of the sub-bullets under non-permissive environment were "Loss of 
material-Hijacked, destroyed," and "Loss of employees, due to death/fear of losing 
life." (Ex. G-276 at 5) At hearing, when asked whether at any time during his tour of 
23 

duty in Iraq convoys were not attacked for some prolonged period of time, L TC Sheridan 
answered "I don't believe that ever happened while I was 
there" (tr. 12/167). 
KBRS Prime Contractor Use of PSCs on Contract 0007 
46. From late January 2004 to I April 2005, Mr. Craig Peterson was the KBRS 
Program General Manager for Contract 0007 activities in the CENTCOM area which 
encompassed 23 different countries. For the first four months in 2004, he stationed 
himself in Iraq. (Tr. 6/123, 125, 129) At hearing, Mr. Peterson testified that his policy in 
Iraq was not to use private security on Contract 0007 "because the Army was supposed to 
provide our protection. And if we went willy-nilly off and decided to do our own, then, I 
probably wouldn't have ... a good leg to stand on when arguing with the Army to provide 
the force protection." Mr. Peterson's view was based on the fact that the contract said 
that force protection would 
be provided by the Army and not because he thought the 
contract prohibited the use of PSCs. (Tr. 6/185-87) 
4 7. After Mr. Peterson left Iraq, the senior personnel he hired to manage the 
KBRS activities in Iraq did use PSCs for their movements, and this was known by both 
the DCMA Commander Iraq and the Rock Island PCO in 2004. Colonel (COL) 
Ainsworth Mills, the DCMA Commander Iraq from April through October 2004, testified 
that: 
Yes, I knew that there was a private security guard contract to 
use for the senior managers that were in Iraq to move around. 
And it was done because they felt that they needed to have 
that flexibility to move. And that time and time again we 
talked about that. It was that that was not an allowable cost 
under the LOGCAP contract and that that would have to be 
something that LOGCAP would pay for. I'm sorry. That 
would be something that KBR would have to pay for, but that 
LOGCAP would not pay for that. 
And I had discussions with Mary Beth Watkins the 
PCO, about that. And the people who worked for me also we 
had several discussions about that 
that was not an allowable 
cost of the LOGCAP contract. And I did relay that to 
Mary Wade, Reno Butler and to Paul Cerjan [ofKBRS]. 
(Tr. 11/88, 131) 
48. In its post-hearing brief, the government states that "Had Ms. Watkins been 
advised of KBRS' noncompliance, there is no question that she would have stopped it" 
(gov't br. at 128). COL Mills' testimony is that she was so advised (see finding 47). 
24 

The parties have not pointed to anything in the record and we have found none indicating 
that Ms. Watkins did anything to stop the alleged noncompliance when so advised by 
COL Mills. 
Subcontractor Use of PSCs on Contract 0007-ESS 
49. Although the KBRS manager Mr. Peterson testified that he did not use private 
security for himself while he was in Iraq, he knew that KBRS subcontractors on Contract 
0007 were using PSCs and he did not 
object to their use. His testimony on this point was 
as follows: 
Q .... [D]id you know that KBR's subcontractors were 
using private security contractors under LOGCAP at the time 
you were there? 
A. Well, I'd say yes. I meant, they had to. I mean, 
they were dying off like flies. We had a hard time keeping 
subcontractors. 
Q. I mean, any specific knowledge ofKBR's 
subcontractors using PSCs, or is it just an inference? 
A .... We were given some very untenable missions and 
untenable timing ... .If they were not using PSCs, I have no 
idea how they did their job. None whatsoever. Because they 
couldn't have gone anywhere. 
So I can't point to me talking to a sub and say "Tell me 
about your subcontract with a PSC." That didn't 
happen .... But I knew in my own mind that they had to be 
using them, or they couldn't have performed. 
(Tr. 6/193-94) 
50. As to the availability of military convoys for subcontractor travel between 
sites within Iraq, Mr. Peterson testified: 
I myself, as the head [of LOGCAP] and a retired general 
officer, would be on an installation and ask the young 
lieutenant or captain who has got a convoy going to Arifjan or 
somewhere if I could pile in. They said, "I don't do 
25 

contractors." I said, "I'm Craig Peterson. I'm in charge of 
LOGCAP." They said, "I don't do contractors." 
Q. They didn't say, "Who?" 
A. No .... So, I mean, it -- if I got kicked out of 
convoys, then there is no doubt in my mind that subs did. 
(Tr. 6/194-95) 
51. The principal KBRS subcontractor on Contract 0007 involved in these 
appeals 
was ESS Support Services Worldwide (ESS). The ESS subcontracts under 
Contract 0007 were for the installation and operation of troop dining facilities (DF A Cs) 
at specified sites in Iraq (app. supp. R4, tab 2). ESS had the largest PSC costs 
($19,234,932) of the 21 subcontractors whose estimated PSC billings for the period 2003 
through 2006 are in evidence (R4, tab 58 at 5-6, 8-9). ESS concluded its subcontract 
operations in Iraq on 30 June 2006 (tr. 8/159). 
52. The ESS operations manager in Iraq from June 2003 through June 2006 was 
Mr. Steven Murray (tr. 8/94, 159). Mr. Murray testified that ESS used PSCs for the 
entire period of its engagement in Iraq because the government force protection did not 
cover all of its security requirements. This testimony in pertinent part was as follows: 
[W]e pretty consistently used, from early '03 and all the way 
through our departure in '06, PSD [private security 
detachment] teams to move people and money 
and equipment 
in and out of the country, because again, even in '05 and '06, 
the [government] convoy system would not let our NTVs 
[non-tactical vehicles] in the convoy. If you disclosed you're 
carrying cash, you're not getting in the convoy with cash, and 
it was a total cash economy the whole time we were there . 
.. .It became extremely difficult to move things 
between sites. We'd approach- we tried to use some military 
force protection on the site, and I personally talked to two or 
three commanders about this. We were told pretty 
consistently that the military is not there to babysit 
contractors. 
26 

I had some people ... stuck on a southern site, and I 
needed to move them to a northern site. [They were included 
in a government convoy but] halfway through Baghdad, they 
stopped our vehicle ... [S]aid they got a call to go on a mission 
and they took off in another direction .... [W]e dispatched, 
enormous cost, ... a PSD team to go and pick them up . 
. 
. . Another occasion happened whereby we were 
moving equipment ... we had two or three large 500 kV 
generators ... at one site; we had to move them across Baghdad 
to another site. They [the government] agreed to move us . 
. . . Halfway there, they told our truck to pull over and 
wait. They had to leave, and they left. Never saw my truck 
again. It was just gone. The driver, .. .! don't know what 
happened to him. The truck was gone. 
We learned our lesson very quick. We did ask, from 
time to time, and most times it was "We're not doing that. 
We can't do that. We're warfighters. Take care of 
yourselves." It's extremely difficult to move between sites, 
and it was a pretty regular need of ours to do that. ... 
Money, people, sometimes food .... [We] only carried 
two or three days' worth of food [at each dining facility site]. 
So if you don't have a delivery coming in every third day, 
you're in trouble. You can't feed soldiers. That was 
unacceptable to us, as a caterer, and to our client, KBR. We 
could not fail. 
So we had to move food, and the military would not 
touch it from intra-theater. They had bigger things to do than 
to move contractors. 
Q: Did there ever come a time when you simply gave 
up on seeking force protection? 
A. Honestly, no. It was in our interest. I mean this is 
a business, and if I didn't have to pay a PSD team, which 
were not cheap, and I could get it in a convoy, I'd rather use a 
convoy. It didn't always fit with our business unfortunately. 
27 

Either you didn't have the time to do it, or they 
wouldn't do it. But always, even up until middle of June of 
2006, when we were leaving, we tried to use convoys as 
much as we could. It's a cost saver for us. So but the answer 
1s yes. We never gave up trying to do that. 
(Tr. 81152, 154-58) 
53. In January 2006, ESS began demobilization activities for the conclusion of its 
Iraq contracts in June 2006. The extent of the government force protection and ESS' use 
of PSCs during this period was described by Mr. Murray as follows: 
We started demobilizing contracts in January of 2006. We 
dropped a few of the Charlie sites in January, and all of the 
rest of our sites, seven or eight of them that were left, came to 
full term in June 2006. 
A couple of things happened in '06 when we ended 
our contracts. In some instances, the FOB [Forward 
Operating Base] was closing, going away, and we'd have to 
relocate. KBR would tell us move all of this stuff from this 
FOB to th[i]s FOB. There was no force protection for that. 
The military was leaving. They were either gone or on their 
way, and that brings up a point about static security as well. 
In those situations, two or three instances where the 
static security went away. The gates 
were gone. There's now 
an open installation, and we had people and assets on the 
ground. So we would put PSD teams on the ground, to keep 
us safe, and to move whatever it is that we had to move from 
A to B, either excess food or reefers. 
Q. Did you get any force protection for any of that 
demob operation? 
A. Unfortunately, we asked several times. On the 
demobing again, these military units were now departing. 
They were leaving, either going to another FOB or 
retrograding back to Kuwait or back to the U.S. We had no 
28 

force protection. There were times when the perimeter came 
down, the gates were open. 
All the military were leaving, and we had to put, at our 
cost again, these PSD teams on site, one to protect our little 
compound. Of course, we shrunk the perimeter down to 
protecting our tent, and then as we took things down, loaded 
them up and transported them across the country to other 
sites, ... there was no security for us there at all. 
No force protection, no kind of war structure. We used 
our own, our own guns to move those things across country. 
(Tr. 81158-60) 
54. For reasons of expediency in meeting the logistical requirements of the troops, 
most if not all of the KBRS subcontracts at issue in these appeals, including the ESS 
subcontract, were awarded on a negotiated fixed-price basis (tr. 15/83-84). Asked at 
hearing if ESS "made or lost money on your use of PSCs," Mr. Murray testified: 
Our use of private security, unequivocably [sic] was a losing 
proposition for us. We incurred more costs than we charged 
... KBR for .... [W]e had to estimate our usage when we're 
putting in a firm fixed price contract. We estimate what 
we're going to use. 
You know, the world changed on us, and we didn't 
have the ability to go back and change our price. Aside from 
the escalation of use, the escalation of the cost increased as 
well. The PSD team, instead of 750 now was $4,000 [per 
mission]. 
(Tr. 81168-69) 
55. The government states in its post-hearing reply brief that "Mr. Murray is not a 
credible witness .... Mr. Murray's sworn testimony is that the military did not move 
food ... (Tr. 8/111). Yet the right-hand columns of the NAVISTAR convoy matrices 
prove that the military 
moved food every day, proving Mr. Murray to be a liar."(Gov't 
reply br. at 18-19) We have carefully examined government counsel's accusation of 
perjury regarding the movement of food, and find it entirely without merit. There is no 
testimony by the witness on the cited transcript page that "the military did not move 
food." To the contrary, the witness's testimony on the two preceding pages regarding the 
military's daily priorities for NAVISTAR convoys from Kuwait into Iraq was that "Some 
29 

days we could move construction materials, or Class 1, which is food. We could move 
food most times. That was what we did." (Tr. 8/109-10) Mr. Murray's testimony 
regarding the military not moving food was in the context of movements of food by ESS 
between the dining facilities within Iraq when a dining facility had a shortage of food 
(tr. 8/157). The "NAVISTAR convoy matrices" cited by the government show only the 
movement of food on convoys from NAVISTAR on the Iraq/Kuwait border into Iraq. 
They do not show and do not purport to show the movement of food originating at one 
base in Iraq and delivered to another base in Iraq. (Exs. A-85, -115) 
56. The overall performance of the task order food service requirement by KBRS 
and its food service subcontractors was succinctly summarized by the testimony of two 
government witnesses. MG Speakes, the Deputy Commanding General of CFLCC from 
June 2003 to July 2004 testified that he made unannounced visits and ate at the KBRS 
subcontractor DFACs "all the time" and found the meals "extraordinary .... Great. 
Fantastic" (tr. 8/8, 
86). LTC O'Day, the DCMA Northern Iraq Commander from June 
through November 2004 testified that he ate "Every day, three times a day" at an ESS 
DFAC and the food was: "Outstanding. Over the board." (Tr. 12/8, 115-16) 
57. The KBRS coordinator for all subcontractor movements of materials and 
equipment by truck from Kuwait into Iraq from mid-July 2003 until "sometime" in 2005 
at the U.S. Army NAVISTAR facility was Ms. Leslie Smith (tr. 7110-11). Ms. Smith 
testified that throughout that period all movements across the border had to be submitted 
to and approved by the U.S. Army Movement 
Control Battalion (MCB). The primary 
method of movement was in a military escorted convoy. However, if a place in a military 
escorted convoy was not available, or if the subcontractor otherwise requested to move 
with its own security, the MCB routinely granted the request. When a subcontractor was 
planning to move trucks with its own security, it was expressly so stated on the KBRS 
MP Escort Allocation Request submitted daily to the MCB. (Tr. 7111, 34-40, 42-53; 
ex. A-85 at 2, exs. A-86, -115) 
58. On 24 March 2004, Ms. Smith sent a memorandum on border crossings into 
Iraq to MAJ Grady Sessoms, her designated point of contact at the MCB. The 
memorandum stated among other things that 
"Private Security is allowed. Iraqi security 
escorts wait in Iraq to hook up with their convoy." (Ex. A-86) At hearing Ms. Smith 
testified that she received no response from MAJ Sessoms then or at any other time 
telling her that 
use of private security for convoys into Iraq was not allowed (tr. 7 /46-49). 
59. LTG Jack Stultz was deployed in Kuwait and Iraq as Commander of the 143rd 
Transportation Command from October 2002 to August 2004 (tr. 14/8). He was at the 
third command level above the Movement Control Team (MCT) that was stationed at the 
NAVISTAR border crossing into Iraq (tr. 14/44). At hearing he testified that he had no 
knowledge of the use of PSCs at the border crossing described by Ms. Smith 
(tr. 14/48-49). However, we find the testimony of Ms. Smith and the contemporaneous 
30 

documentation in exhibits A-85, A-86 and A-115 persuasive as to the actual practice at 
the NAVISTAR border crossing. Moreover, we find that her 24 March 2004 
memorandum sent to MAJ Sessoms (ex. A-86) was sufficient to put the government on 
notice that KBRS subcontractors were using PSCs for convoy protection after crossing 
the border into Iraq when government military escorts were not available. 
60. The government was also on notice of the use of PSCs by KBRS 
subcontractors under Contract 0007 when on 10 June 2005, an ACO consented to the 
award of a food services subcontract with an express pricing justification in the consent 
documents stating that maintenance personnel would be moved by "Air transportation 
instead of land transportation ... [and] then using the services of a professional security 
company to transport them to their respective sites" (app. supp. R4, tab 7 at 13307, 
13312). 
Contract Modification No. P00012 
61. Effective 27 November 2005, the parties entered into bilateral Modification 
No. POOO 12 to Contract 0007 (R4, tab 1 at 131 ). Among other things, this modification 
added the DF ARS 252.225- 7040, CONTRACTOR PERSONNEL SUPPORTING A FORCE 
DEPLOYED OUTSIDE THE UNITED STATES (JUN 2005) clause (hereinafter "the DFARS 
7040 (JUN 2005) clause") to the contract (id. at 134 ). Section G)( 1) of the clause stated: 
G) Weapons. 
( 1) If the Contractor requests that its personnel 
performing in the theater of operations be authorized to carry 
weapons, the request shall be made through the Contracting 
Officer to the Combatant Commander. The Combatant 
Commander will determine whether to authorize in-theater 
contractor personnel to carry weapons and what weapons will 
be allowed. 
(R4, tab 1 at 137-39) 
62. The government contends that section G)(l) of the DFARS 7040 clause 
required KBRS to obtain Theater Commander authorization for use of PSCs in 
performing Contract 0007 (gov't br. at 110-11). We find no reference to PSCs or 
contracts for security services in the DF ARS 7040 (JUN 2005) clause that was added to 
Contract 0007 by Modification No. P00012. The DFARS 252.225-7040, CONTRACTOR 
PERSONNEL AUTHORIZED TO ACCOMPANY U.S. ARMED FORCES DEPLOYED OUTSIDE THE 
UNITED ST A TES (JUN 2006) clause at section G)( 1) does distinguish between arming 
contractor personnel and arming personnel under a contract or subcontract for security 
from a professional PSC and expressly applies the authorization requirement to both. 
31 

There is no evidence, however, that the 2006 version of the DF ARS 7040 clause was 
incorporated by modification into Contract 0007 or the task orders thereunder at any time 
relevant to these appeals. 
CENTCOM General Orders 
63. Special Provision H-13 of Contract 0007 required among other things that "all 
personnel hired by or for the contractor will comply with all guidance, instructions and 
general orders ... issued by the Theater Commander or his/her representative" (see finding 
8). CENTCOM General Order No. IA (GO-IA) dated I 9 December 2000 was entitled: 
"Prohibited Activities for U.S. Department of Defense Personnel Present Within the 
United States Central Command (USCENTCOM) AOR." The stated purpose of the 
order was: "To identify conduct that is prejudicial to the maintenance of good order and 
discipline of all forces in the USCENTCOM AOR." Among the prohibitions in the order 
was paragraph 2.a. which stated: "Purchase, possession, use or sale of privately owned 
firearms, ammunition, explosives, or the introduction of these items into the 
USCENTCOM AOR." The order concluded with a waiver provision stating: "Authority 
to waive or modify the prohibitions of Paragraph 2 of this General Order is delegated to 
the Deputy Commander in Chief, USCENTCOM." (Bd. ex. 3) 
64. From July 2003 to July 2007, Commander (CDR) Brian O'Donnell, USN, 
was the legal staff officer at CENTCOM responsible for reviewing applications for 
waiver of paragraph 2.a. in GO-IA. At hearing, CDR O'Donnell testified that there was 
nothing in GO-IA about contracted security (tr. 9/I I5). He further testified that, in 
August 2003, there were no theater written policies or procedures regarding contractors 
carrying arms and that: "In other words, there is no rule and therefore people are doing 
what they want" (tr. 9/53-55). 
65. On 23 December 2005, CENTCOM issued for the first time a statement of 
policy, expressly stated to be considered a lawful general order, mandating CENTCOM 
authorization, on a case-by-case basis, for contractor use of PS Cs in Iraq and 
Afghanistan. This policy/general order was addressed to about 60 Department of 
Defense and other government agencies, including the DCMA, but not to KBRS. The 
policy/general order stated in pertinent part: 
2.c CONTRACT SECURITY ARMING AND USE OF 
PRIVATE SECURITY COMPANIES (PSC) IN IRAQ AND 
AFGHANISTAN. 
2.c. I. THE DECISION TO ARM DOD CIVILIAN 
PERSONNEL, DOD CONTRACTOR EMPLOYEES OR 
AUTHORIZE THE USE OF CONTRACT SECURITY/PSC 
WITHIN IRAQ OR AFGHANISTAN TO PERFORM 
32 

SECURITY SERVICES SHALL BE DECIDED ON A 
CASE-BY-CASE BASIS PER THE POLICY PROVIDED 
HEREIN. ALL REQUESTS SHALL BE SUBMITTED TO 
THE COGNIZANT US COMMANDER PER PARA 2.D., 
AND SHALL COMPLY WITH PARAGRAPH 3.F. 
BELOW. A REQUIREMENT TO COMPLY WITH THIS 
PROCEDURE SHALL BE INCLUDED IN ALL EXISTING 
CONTRACTS (WITHIN 90 DAYS OF THE EFFECTIVE 
DATE OF THIS POLICY OR AS SOON AS 
PRACTICABLE) .... 
11. THIS POLICY IS EFFECTIVE IMMEDIATELY AND 
SHALL BE CONSIDERED A LAWFUL GENERAL ORDER. 
VIOLATION OF THIS GENERAL ORDER MAY SUBJECT 
AN OFFENDER TO ADMINISTRATIVE OR DISCIPLINARY 
ACTION UNDER THE UCMJ, CIVILIAN PERSONNEL 
REGULATIONS, CONTRACT TERMS OR CRIMINAL 
PROSECUTION UNDER US OR HOST-NATION LAW. 
(Ex. G-328 at 1, 2, 6, 7; tr. 22/22) 
66. KBRS had no notice of the 23 December 2005 CENTCOM Policy 
Statement/General Order until it received a Rock Island PCO letter dated 28 December 
2006 attaching a modification of that order. The government did not initiate a 
modification to incorporate the policy/general order into Contract 0007 within 90 days as 
required by the order, and the contract was never so modified. (Ex. A-159; tr. 9/143-44, 
22/20-25) 
67. On 13 March 2006, CENTCOM issued General Order No. IB (GO-IB) 
entitled "Prohibited Activities for U.S. Department of Defense Personnel Present within 
the United States Central Command (USCENTCOM) Area of Responsibility (AOR)." 
GO- I 
B expressly superseded GO- I 
A and further stated that "all waivers granted pursuant 
to GO-IA, are hereby rescinded and superseded." However, GO-IB retained the same 
paragraph 2.a. as in GO-IA, and did not in any manner address the use of PSCs to 
supplement government force protection. (Ex. G-5 at 13-I 8) 
68. From September through December 2006, the Special Inspector General for 
Iraq Reconstruction conducted a survey of the security costs being incurred at that time 
by the contractors performing the reconstruction work. The total Iraq Relief and 
Reconstruction Funds (IRRF) spent on security costs as a percentage of total contract 
costs for each of the nine contractors responding to the survey ranged from a low of 7.6% 
33 

to a high of 16.7%. The average for all responding contractors was 12.5%. (Ex. A-161 at 
2-3) 
The Government's Withholdings and the Contractor's Claims 
69. Ms. Kristan Mendoza was the Rock Island lead PCO for Contract 0007 for the 
period February-June 2006 and from October 2006 to the present (Testimonial 
Deposition, 18 Oct. 2012 at 14, 18). In response to Congressional inquiries about the use 
of PSCs by KBRS and its subcontractors on Contract 0007, Ms. Mendoza on 31 January 
2007 obtained documentation from ESS that in March 2005, "Security" was 12.55% of 
"our labor pricing in our subcontracts" (R4, tab 50 at 1, 14 ). From this data a Rock 
Island price analyst estimated that "Security" was eight (8)% of the total ESS subcontract 
billings.6 With KBRS mark-ups, Rock Island alleged total cost billed to the 
government for ESS private security was $19,652,815.28. (R4, tab 60 at 16) 
70. By letter dated 6 February 2007 and DCAA Form 1, No. 127 of the same date, 
the PCO and DCAA 
notified KBRS that they were respectively "adjusting payments" 
(PCO) and "suspending" costs (DCAA) in the amount of$19,652,815 associated with 
ESS' use of PSCs in performing its subcontracts under Contact 0007 (R4, tab 60 at 1-4). 
71. On 29 August 2007, DCAA issued a "Report on Evaluation of [KBRS] 
Disclosure of Costs of Armed Private Force Protection Services Associated with 
[Contract 0007]." The report stated that subcontractor billings to KBRS for private 
security on Contract 0007 for the years 2003 to 2006 
were $79,306,895. 7 The report also 
stated that the KBRS billings to the government under Contract 0007 in those years also 
included $20,3 71, 798 of indirect allocations of private security costs incurred by the 
KBRS Middle East Regional Office (MERO). The total amount of the allegedly 
unallowable private security costs in the 29 August 2007 DCAA report was $99,678,695. 
(R4, tab 58 at 1, 5, 7-11) 
6 The "Estimated amount of security labor within [ESS] subcontracts" at Attachment 4 to 
the DCAA Form 1, No. 127, dated 6 February 2007 shows total payments for 
PSCs of $18,551,279.04 and total subcontract prices of$231,444,266.18 (R4, 
tab 60 at 16). 
7 
The DCAA calculation of the subcontractor PSC costs was based on the estimated PSC 
costs provided by 21 subcontractors which amounted to 1. 7 8 percent of their total 
subcontract billings to KBRS. However, this estimated percentage of the PSC 
costs of 21 subcontractors was also applied by DCAA to the total billings of 
another 44 subcontractors who had not provided any estimates of their PSC costs. 
The result of this added calculation raised the government claim for the 
subcontractor PSC costs by $35,317,266. (R4, tab 58 at 7-10) 
34 

72. On 22 October 2007, KBRS submitted a certified claim to the Rock Island 
PCO under the Contract Disputes Act of 1978 (CDA), 4I U.S.C. §§ 7I01-7109, for 
payment of the $I9,652,8I5 withheld by the government in the PCO's letter of 
6 February 2007 and the DCAA's Form I, No. I27, of the same date (R4, tab 59). The 
PCO did not respond as required by the CDA with either a decision 
within 60 days of 
receipt of the claim or with a date by which a decision would be issued. On 24 March 
2008, KBRS appealed the deemed denial. The appeal was docketed as ASBCA 
No. 56358. 
73. On 3 August 2009, the DCAA issued a Form I, No. I27 Revision-I, replacing 
the 6 February 2007 Form I, No. I27, in its entirety and disapproving $I03,397,086 for 
alleged costs of PSCs charged to Contract 0007. The amount in the Form I, No. I27 
Revision- I, was the total estimated direct and indirect private armed security costs in the 
29 August 2007 DCAA Report ($99,678,695) for the years 2003 through 2006 
plus 
$3,7I8,39I in KBRS mark-ups on those costs for that period. (ASBCA Nos. 57I5I, 
57327, R4, tab 72 at 3-9) 
74. The total PSC security cost alleged in the DCAA Form I, No. I27 Revision-I, 
($I03,397,086) was 2.32% of the related subcontractor total billings ($4,449,I52,680). 
As a percentage of total billings, the PSC security costs of KBRS and its subcontractors 
as alleged in the DCAA Form I, No. 127 Revision-I, (2.32%) were substantially lower 
than the PSC security costs of the Iraq Reconstruction contractors (I2.5%) that were 
performing in substantially the same security situation at the same period of time (see 
finding 68). On this evidence, we find that the alleged PSC security costs of KBRS and 
its subcontractors at issue were reasonable as to amount. 
75. On 24 August 2009, KBRS submitted an invoice under Contract 0007 for 
payment of $22,279,678.49. On or about I September 2009, the government withheld 
the entire amount of that invoice consistent with a recommendation in the DCAA Form 1, 
No. 127 Revision-I, that the ACO "take immediate action to recoup the disapproved 
costs." (ASBCA No. 57I5I, compl. and answer iii! 23-24; 57151, R4, tab 72 at 3) On 
20 October 2009, KBRS submitted a certified claim under the CDA for $2I,I31,743 of 
the withheld amount. When the PCO did not issue a decision on the claim, KBRS 
appealed the deemed denial on I 
9 March 2010. The appeal was docketed as ASBCA 
No. 5715 I. (Compl. and answer iii! 4-6) 
76. In March 20IO, the government withheld an additional $2,I26,53 I from 
payments due under Contract 0007 for further recoupment of the disapproved costs in the 
DCAA Form 1, No. I27 Revision-I. On 16 June 20IO, KBRS submitted a certified CDA 
claim for the remainder of the September 2009 withholding ($1,147,935.49) and the full 
amount of the March 20IO withholding ($2,126,53 I) for a total claimed amount of 
$3,274,466.49. (ASBCA No. 57327, compl. and answer iii! 26-27) When the PCO failed 
35 

to issue a decision on this claim as required by the CDA, KBRS appealed the deemed 
denial on 20 August 2010. The appeal was docketed as ASBCA No. 57327. (Id. 'i!'il 4-6) 
77. On 30 January 2013, the Rock Island PCO issued a "Contracting Officer's 
Final Decision for Form 1 #127 and Claims, Costs Relating to the Use of Private Armed 
Security on LOGCAP III Contract DAAA09-02-D-0007." The final decision found 
unallowable $55,620,591.55 of the $103,397,086 suspended/disallowed costs in the 
DCAA 
Form 1, No. 127 Revision-I, and the remaining $47,776,494.45 allowable. After 
deducting the amounts withheld by the government ($19,652,815.00 on 22 October 2007, 
$21,131,743.00 on 20 October 2009, and $3,274,466.49 on 16 June 2010) the final 
decision claimed an amount of $11,561,567.55 8 as owed to the government. (Ex. A-210 
at 15) KBRS appealed this decision on 15 February 2013. The appeal was docketed as 
ASBCA No. 58559 and was consolidated for hearing and decision with ASBCA 
Nos. 56358, 57151and57327. 
DECISION 
KBRS contends in its main brief that it is entitled to judgment on all of the appeals 
because the contracting officer's final decision of 30 January 2013 asserting a 
government claim of $55,620,591.55 (finding 77) was untimely (app. br. at 106-08). The 
government did not address this contention in its reply brief. The CDA requires that 
"Each claim by the Federal Government against a contractor relating to a contract shall 
be the subject of a written decision by the contracting officer." 41 U.S.C. § 7103(a)(3). 
The Act also requires that "each claim by the Federal Government against a contractor 
relating to a contract shall be submitted within 6 years after the accrual of the claim." 
41 U.S.C. § 7103(a)(4)(A). "Accrual of a claim" is defined in FAR 33.201 in pertinent 
part as: "the date when all events, that fix the alleged liability of either the Government 
or the contractor and permit assertion of the claim, were known or should have been 
known." 
A government claim for recovery of payments made for allegedly unallowable 
costs of KBRS and its subcontractors using PSCs in connection with their performance of 
Contract 0007 accrued no later than 10 June 2005. Raytheon Missile Systems, ASBCA 
No. 58011, 13 BCA 'i! 35,241at173,017-018. Prior to that date, on 29 August 2004, 
LTC O'Day knew that PSCs were being used instead of military escorts (finding 41). 
Prior to 10 June 2005, between April and August 2004, the DCMA Commander Iraq and 
Rock Island PCO Watkins knew that PSCs were being used for movement by KBRS 
personnel within Iraq (findings 47-48). Prior to 10 June 2005, on 24 March 2004, the 
KBRS contact at MCB, MAJ Sessoms, was told that PSCs were being used for convoys 
from Kuwait into Iraq (findings 58-59). Finally, on 10 June 2005, the government was 
8 The correct amount after the stated deductions is $11,561,567.06. 
36 

expressly advised that PSCs were being used to transport personnel to their respect sites 
in Iraq (finding 60). 
On these findings, the contracting officer's final decision of 30 January 2013 was 
untimely and thus invalid and a nullity. We give it no further consideration and dismiss 
the appeal in ASBCA No. 58559 for lack of jurisdiction. See The Boeing Co., ASBCA 
No. 57490, I2-I BCA ii 34,916 at 171,680. 
The grounds for the withholdings at issue in ASBCA Nos. 56358, 5715I and 
57327 were that the government had previously paid the withheld amounts to KBRS for 
the costs of PSCs that it now believed were unallowable under the terms of the contract. 
The government cites CENTCOM GO-IA made applicable to the contract by Special 
Provision H-13, the promise of government force protection in Special Provision H-I 6, 
and the "Weapons and Training" provisions in Special Provision H-21, as prohibiting the 
use of PSCs to supplement the government force protection without the authorization of 
the Theater (CENTCOM) commander for support that these costs were unallowable. 
In our 2 April 2012 decision denying appellant's motion for judgment on the 
pleadings, we specifically addressed Special Provisions H-13, H-16, H-2I and 
CENTCOM GO-IA. We held that none of these provisions categorically prohibited the 
use of PSCs or mandated Theater Commander authorization for their use. Kellogg Brown 
& Root Services, I 2-1 BCA ii 35,00 I at 172,0 I 6. After hearing and consideration of the 
record as a whole, we reaffirm those holdings as to the Special H clauses and CENTCOM 
GO-IA. Those clauses and GO-IA are clear. The extrinsic evidence offered by the 
government may not be used "to create an ambiguity where [the contract] language is 
clear." HRE, Inc. v. United States, I42 F.3d I274, I276 (Fed. Cir. I998) (citing City of 
Tacoma v. United States, 3 I F.3d I I30, I I34 (Fed. Cir. I 994)).9 
Subsequent to the award of the contract, CENTCOM recognized the use of PSCs 
in its 4 July 2004 WARNORD that required MNF-1 to coordinate with other government 
agencies to protect U.S. government contractors through "A COMBINATION OF 
COALITION MILITARY FORCES, IRAQ SECURITY FORCES AND PRIVATE 
SECURITY COMPANIES." The CENTCOM W ARNO RD further stated that: 
"CONTRACTORS CONTINUE TO HA VE THEIR RIGHT OF SELF DEFENSE AND 
MAY, IN SOME CIRCUMSTANCES ARRANGE FOR CONTRACTOR SECURITY 
9 The government now contends that the KBRS proposal of26 January 2004 to 
subcontract for armed convoy security was an admission that the contract 
prohibited the use of PSCs without Theater Commander approval (gov't hr. 
at I22). We do not agree. The KBRS proposal was in response to a government 
request for a proposal to relieve the government from its contractual responsibility 
for protection of contractor convoys pursuant to the force protection clauses of the 
contract and task orders issued thereunder (findings 26-28). 
37 

WITH A PRIVATE SECURITY COMPANY." (See finding 39) Neither the DFARS 
7040 (June 2005) clause that was added to Contract 0007 by Modification No. P00012 
effective 27 November 2005, nor CENTCOM GO-lB issued on 13 March 2006, 
superseding GO-IA addressed the use of PSCs (see findings 6I-62, 67). 
The CENTCOM policy/general order dated 23 December 2005, requiring 
CENTCOM authorization on a case-by-case basis for use of PSCs was clear, but under its 
express terms, it was not applicable to existing contracts until it was contractually 
incorporated into those contracts. KBRS had no notice of the existence of the order until 
28 December 2006, and there is no evidence that Contract 0007 was ever modified to 
include the 23 December 2005 policy/general order. (See finding 65) 
The government has the burden of proof in establishing that a cost is unallowable 
by operation of a specific contract provision or regulation. Space Gateway Support, LLC, 
ASBCA No. 56592, 12-1BCAir34,94I at 171,792; Lockheed Martin Western 
Development Laboratories, ASBCA No. 51452, 02-1BCAir31,803 at I57,102. On this 
record, we find that the government has not carried its burden of proving that during the 
relevant period of performance (2003-2006) the terms of Contract 0007, the terms of the 
task orders issued thereunder, or the terms of any regulation prohibited the use of PSCs to 
supplement government force protection without the case-by-case authorization of the 
CENTCOM Commander. Moreover, under Special Provision H-13, only the guidance, 
instructions and general orders issued by the CENTCOM theater commander or 
designated representative were contractually binding on Contract 0007. The guidance, 
instructions, and general orders of military headquarters subordinate to CENTCOM (such 
as MNF-1 and MNC-1), were not contractually binding under Special Provision H-13. 
A preponderance of the evidence shows that during the years 2003-2006 the force 
protection provided by the government for Contract 0007 was not commensurate with the 
threat or with the protection provided to DoD civilians. A preponderance of the evidence 
also shows that the use of PSCs by KBRS and its subcontractors to supplement the 
government force protection during those years was reasonably necessary for 
accomplishment of the logistical support mission of Contract 0007 and the task orders 
thereunder. (See findings 13-60) A preponderance of the evidence further shows that the 
cost of PSC services used by KBRS and its subcontractors as alleged in the DCAA 
Form I, No. I27 Revision-I, were reasonable as to amount (see findings 68, 74). On this 
record we conclude that, in the security conditions prevailing in Iraq in 2003-2006, the 
use of PSCs by KBRS and its subcontractors was reasonable as that term is defined in 
FAR 31.201-3(a) (see finding 8). 
The government argues in its opening brief that: "If the government ever failed to 
provide adequate force protection ... KBRS' remedy was delay" (gov't hr. at 13I). It 
repeats this argument in the conclusion of its reply brief where it states "absent 
permission to privately arm, the Contract solely permitted delay, which could be incurred 
38 

without cost to KBRS" (gov't reply br. at 75). Fortunately for the troops that depended 
on KBRS and its subcontractors for their life-support and other logistical support 
services, KBRS and its subcontractors did not adopt the attitude now suggested by the 
government as their only remedy for the government's failures to provide force 
protection. As Mr. Murray, the ESS DFAC subcontractor manager expressed 
it: "if you 
don't have a delivery coming in every third day, you're in trouble. You can't feed 
soldiers. That was unacceptable to us, as a caterer, and to our client KBR. We could not 
fail." (See finding 52) In this regard, we note that Contract 0007 was a "rated" order 
under which a failure to deliver within the required time, could be subject to criminal 
penalties (id.). See Martin v. Halliburton, 618 F.3d 476, 480 (5th Cir. 2010). Moreover, 
the government's argument presupposes that PSCs were prohibited under the terms of the 
contract. We have found otherwise. 
We have carefully considered the government's arguments as to estoppel, an 
alleged CAS violation, and "political question." We find them without merit. 
The government's estoppel argument is that (i) KBRS misrepresented to the government 
that it was not using PSCs; (ii) that the government relied upon that misrepresentation; 
and (iii) the government was materially prejudiced by that misrepresentation. Whatever 
damages the government may have suffered as a result of any misrepresentation by 
KBRS as to its use of PSCs, they are not represented by the costs of the PSCs that we 
have found allowable and which the government is contractually bound to reimburse. 
We also find no ')udicial estoppel" arising from the tort litigation cited by the 
government (gov't br. at 114, 132). There is no conflict between the KBRS position in 
the tort litigation that the government had the primary responsibility for force protection, 
and its position in the present litigation that the government had primary responsibility 
for force protection, but if it failed to carry out that responsibility, there was nothing in 
Contract 0007 that prohibited KBRS from hiring PSCs to the extent necessary to 
accomplish the logistical support mission. 
The government allegation of a CAS violation is that PSC costs benefitting only 
Contract 0007 were charged to a KBRS Middle East Regional Office (MERO) overhead 
rather than as a direct cost to Contract 0007 (gov't br. at 128). The KBRS MERO was a 
"forward" home office for a number of KBRS contracts in the Middle East. The KBRS 
PSC services for all of its Middle East contracts were procured by MERO and those 
services were not confined to Contract 0007 (tr. 23/17-20). The government bears the 
burden of proving CAS violations. Raytheon v. United States, No. 2013-5004, -5006, 
slip. op. at 18 (Fed. Cir. April 4, 2014). On this evidence, the government has failed to 
prove any CAS violation. 
As to the "political question" argument, the government states: "For KBRS to 
prevail, the Board must adjudge that the military force was inadequate and thus the PSCs 
were necessary. Such a task falls squarely within the political question doctrine and is 
thus non-justiciable." (Gov't br. at 146) We disagree. The "political question" doctrine 
39 

does not apply to the adjudication under the CDA of whether or not the government has 
met a contractual obligation to provide adequate force protection to the contractor. See 
Burnside-Ott Aviation Training Ctr. v. Dalton, 107 F.3d 854, 858 (Fed. Cir. 1997) ("In 
government contract disputes ... the initial determination in each dispute is made by one of 
the parties, i.e., the CO. Congress commanded [in the CDA] that the CO's decision on 
any matter cannot be denied Board review."). In any event, there is no real question that 
the government did not provide force protection on a consistent basis. Our findings 
reveal this lack of force protection was a constant problem and the commanding generals 
testified they did not have the resources to provide it. 
We have also considered the government's numerous objections to the presiding 
judge's rulings limiting discovery, the number of documents, testimony of witnesses, the 
pages of brief, and excluding entirely classified documents pertaining to operations in 
Iraq that were still classified seven to ten years after the operations took place, and could 
not be disclosed to appellant's lead counsel who did not have a security clearance. 10 
With the first of the appeals having been filed in March 2008, and after five years of 
discovery and motion practice, hearing on these appeals was finally held on 24 hearing 
days between 11 April and 25 July 2013. At hearing, 24 witnesses testified and 3 7 ,000 
plus documents were received in evidence. These proceedings had to end at some point 
and the limitations on discovery, witnesses, documents and pages of briefs did not violate 
this Board's rules or the discretion inherently granted to tribunals to control their 
proceedings. 
We sustain the appeals in ASBCA Nos. 56358, 57151and57327. In ASBCA 
No. 56358, KBRS is entitled to recover from the government $19,652,815 with interest 
under the CDA (41 U.S.C. § 7109(a)(l)) from 22 October 2007 until paid. In ASBCA 
No. 57151, KBRS is entitled to recover from the government $21,131,743 with interest 
from 20 October 2007 until paid. In ASBCA No. 57327, KBRS is entitled to 
10 The administrative burden of handling at hearing classified documents on tactical 
operations in Iraq occurring seven years to ten years ago (see gov't br., ex. 13) 
outweighed any perceived evidentiary benefit particularly since none of the 
documents were alleged by the government to be outcome determinative and 
involve the very question that the government alleges is a "political question," the 
amount of military force that was necessary. 
40 

$3,274,466.49 with interest from 16 June 2010 until paid. As previously stated above, 
ASBCA No. 58559 is dismissed for lack of jurisdiction. 
Dated: 17 June 2014 
I concur 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
~AQµu~ 
MONROE E. FREEMAN, JR. 
Administrative 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. 56358, 57151, 57327, 
58559, Appeals of Kellogg Brown & Root Services, Inc., rendered in conformance with 
the Board's Charter. 
Dated: 
41 
JEFFREYD. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals