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. 58465 
Thomas Barrett, Esq. 
Chief Senior Counsel 
David Newsome, Jr., Esq. 
Senior Legal Counsel 
E. Michael Chiaparas, Esq. 
DCMA Chief Trial Attorney 
Douglas R. Jacobson, Esq. 
Trial Attorney 
Defense Contract Management Agency 
Bloomington, MN 
OPINION BY ADMINISTRATIVE JUDGE SHACKLEFORD 
ON APPELLANT'S MOTION FOR SUMMARY JUDGMENT 
Kellogg Brown & Root Services, Inc. (KBR or appellant) moves for summary 
judgment, arguing that the Defense Contract Management Agency's (DCMA's or 
government's) claim for $2,285,026 based on alleged unallowable costs under Federal 
Acquisition Regulation (FAR) Part 31 is time-barred by the six-year statute of limitations 
set forth in the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109. The government 
opposes the motion. We deny the motion for the reasons set forth below. 
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION 
1. On 14 December 2001, the Department of the Army awarded indefinite-delivery, 
indefinite-quantity Contract No. DAAA09-02-D-0007 (contract) to KBR. 1 The contract 
included a base period of one year and nine one-year option periods providing a broad range 
of services in support of various military operations for the Logistics Civil Augmentation 
Program (LOGCAP 111). Specific work was issued via individual task orders on either a 
firm-fixed-priced or cost-reimbursable basis. (App. mot. ii 1; gov't opp'n at 2; R4, tab 2) 
1 The contract was originally awarded to Brown & Root Services (R4, tab 2). By 
novation on 1August2003, the contractor's name was changed to Kellogg Brown 
& Root Services, Inc. (app. mot. ii 1; gov't opp'n at 2). 

2. The contract incorporated the following standard FAR and Defense FAR 
Supplement (DFARS) clauses: FAR 52.216- 7, ALLOWABLE COST AND PAYMENT (MAR 
2000); FAR 52.233-1, DISPUTES (DEC 1998)-ALTERNATE I (DEC 1991); FAR 52.216-18, 
ORDERING (OCT 1995); FAR 52.216-22, INDEFINITE QUANTITY (OCT 1995); FAR 52.217-8, 
OPTION TO EXTEND SERVICES (Nov 1999); FAR 52.217-9, OPTION TO EXTEND THE TERM 
OF THE CONTRACT (MAR 2000); DFARS 252.217-7027, CONTRACT DEFINITIZATION 
(OCT 1998) (R4, tab 2 at G-67, -69, -71-72, -752). The contract also included a deviated 
version of FAR clause 52.245-5, GOVERNMENT PROPERTY (COST-REIMBURSEMENT, 
TIME-AND-MATERIAL, OR LABOR-HOUR CONTRACTS) (JAN 1986) (id. at G-77). 
3. Under paragraph (a) of FAR 52.216-7, Allowable Cost and Payment clause, the 
government provides payments "in amounts determined to be allowable by the 
Contracting Officer in accordance with Subpart 31.2 of the [FAR] in effect on the date of 
this contract and the terms of this contract" (R4, tab 2 at G-67). 
4. On 13 June 2003, the contracting officer (CO) issued undefinitized 
cost-plus-award-fee Task Order No. 0059 (TO 59) to KBR for logistic and life support 
services to the "V Corps and Coalition forces" in support of Operation Iraqi Freedom 
(app. mot. ifif 3-5; gov't opp'n at 2; R4, tabs 3, 4 at G-89). The task order's Statement of 
Work (SOW) included, among other things, services for waste management and trash 
removal at eight sites within Iraq (R4, tab 4 at G-94, -97, -100, -103, -106, -109, -112, 
-117). Under paragraph 1.3 of the SOW, KBR was required to obtain approval from the 
CO for purchases of supplies and non-durable goods above the micro-purchase threshold 
of $2,500 on either a unit or cumulative cost basis, and for purchases of equipment and 
durable goods above a threshold of either a unit cost of $5,000 or a cumulative cost of 
$25,000 (R4, tab 4 at G-8). 
5. Via execution of Modification No. 32 of TO 59 on 31March2005, the CO 
definitized the task order (R4, tab 16). 3 
6. Between March and July 2004, KBR obtained consent from the CO to purchase a 
total of 20 trash trucks to be used in performance of the waste management and trash 
removal requirements under TO 59 (app. mot. if 8; gov't opp'n at 3; R4, tab 6 at G-122-23). 
7. Between 26 April 2004 and 11July2004, KBR issued the following five purchase 
orders to Najd Company (Najd), a vendor located in Jordan: JP01021, JP01957, JPOl 136, 
JPOl 174, and JP01025 (app. mot. ifil 6, 9; gov't opp'n at 2-3; R4, tab 6 at G-122-23). 
2 Citations to the Rule 4 file are to the consecutively-numbered pages unless otherwise 
indicated. 
3 The original record did not include a definitized version of TO 59. At the direction of 
the Board, the government supplemented the Rule 4 file with a copy (see Bd. corr., 
gov't ltr. dtd. 19 March 2015). 
2 

8. Between April 2004 and February 2005, KBR accepted delivery of 20 trash 
trucks by Najd in Jordan (R4, tab 6 at G-122). KBR accordingly paid Najd for deliveries 
under purchase orders JP01021, JP01957, JPOl 136, and JPOl 174, comprising 14 trash 
trucks (id. at G-123-24 ). 
9. KBR submitted invoices to the government and received payment for the 
following purchase orders: JP01021 on 20 December 2004; JP01957 on 28 January 
2005; and JPOl 1364 and JPOl 174 on 17 March 2005 (app. mot. ii 10; gov't opp'n at 3). 
10. In January 2005, KBR transported five trash trucks to Iraq and performed an 
inspection. In a 29 January 2005 memorandum, KBR's inspection unit recommended 
that the trucks be rejected because they did not meet certain quality, design, safety, and 
minimum industry standards and could not be operated for their specific purposes. (R4, 
tab 6 at G-124, -252-53) Subsequently, KBR cancelled plans to transport the remaining 
trucks in Jordan to Iraq and attempted to cancel all purchase orders in connection with the 
trucks (app. mot. ii 11; gov't opp'n at 3; R4, tab 6 at G-124). 
11. KBR withheld the final payment due with respect to purchase order JPO 1025 
in the amount of $861,300 for six trucks delivered (R4, tab 6 at G-124 ). On or about 
12 February 2006, Najd sued KBR in Amman, Jordan, for the non-payment of invoices 
for those trucks (app. mot. ii 12; gov't opp'n at 3). On 15 June 2006, KBR initiated an 
arbitration proceeding against Najd seeking recovery of the payments made to Najd under 
four of the five purchase orders in the amount of $2,064,950, and a determination that 
KBR did not owe Najd any money for the allegedly defective trucks (app. mot. ii 13; 
gov't opp'n at 3; R4, tab 6 at G-124). 
12. While the litigation proceedings between KBR and Najd were pending, 
Mr. Ron Allen, an attorney for KBR, emailed a government official, Mr. Robert Tucker,5 
leading to the following email exchange, in pertinent part, between the two on 15 June 2006: 
It appears we have litigation in progress in Jordan and 
potential arbitration of our dispute in the US concerning these 
[trash] trucks. I will keep you advised. 
Mr. Tucker responded: 
Any idea on when a decision may be made? 
4 It appears that there was a typographical error with respect to the invoice number in this 
proposed undisputed fact in KBR' s motion that is corrected. 
5 Mr. Tucker's position is not revealed in the record. 
3 

Will there be a negative impact on the Govemment/KBR's 
case if the trucks are run periodically to lubricate the engine, 
transmission and seals? 
Mr. Allen responded: 
No sir. Our litigators have to get the Jordan lawsuit 
dismissed so they can proceed with the arbitration. I would 
hope within our lifetime. 
As to the maintenance, I would say we have a duty to mitigate 
the overall damages which would necessitate maintenance 
no 
matter who eventually ends up with the trash, excuse me trash 
trucks. Of course, we would have to track our costs to 
present to the arbitrator. 
Mr. Tucker responded: 
Would you please pass your thoughts regarding maintenance 
to the appropriate KBR personnel so that maintenance will be 
accomplished? 
(App. mot., attach. A) 
13. In a 30 July 20066 email, KBR stated to Najd that it sought reimbursement of 
the payments made to Najd for the alleged unacceptable technical design of the 20 
delivered trucks (R4, tab 6 at G-254). 
14. On 31 December 2006, KBR and Najd settled their dispute. The settlement 
resulted in KBR accepting all delivered trucks and Najd receiving the remaining $861,300 
that was withheld by KBR. (App. mot. ,-i 15; gov't opp'n at 3; R4, tab 6 at G-257-59) 
15. Subsequent to the settlement between KBR and Najd, KBR distributed the 
remaining trucks located in Jordan during the litigation proceedings to various sites in Iraq 
where the trucks were used for trash removal services (app. mot. ,-i 16; gov't opp'n at 3). 
16. A memorandum, dated 2 March 2010, from the Department of Defense 
Inspector General (DoD-IG) to the Director of the DCMA- Iraq, requested DCMA to 
provide a "sufficiently supported account of all management decisions and actions taken 
concerning the acceptance, use, and disposition of the five trash trucks" located at an 
Iraqi site the DoD-IG encountered during its audit (R4, tab 6 at G-126). 
6 The date on this email has "2005" which appears to be an error. 
4 

17. On 9 April 2010, KBR submitted a report to the DCMA administrative CO 
(ACO) providing its account concerning the acquisition of the 20 trash trucks for 
performing the 
waste management and trash removal services under TO 59 pursuant to 
the DoD-IG 
2 March 2010 memorandum (R4, tab 6 at G-122-25). The report maintained 
that the five trash trucks identified in the memorandum were used on the 
trash mission, 
with three of the five trucks rated as operational (id. at G-125). 
18. In an audit report dated 24 May 2011 (No. 2131-2011Fl 7900001), the 
Defense Contract Audit Agency (DCAA) questioned the total cost of $2,926,250 under 
FAR 31.201-3, Determining reasonableness, with respect to the 20 trash trucks purchased 
by KBR in support of TO 59. Among other things, DCAA found that KBR's incurred 
costs were unreasonable because KBR did not "exercise sound business judgment in 
providing the best value product to meet the customer's needs. In addition, it failed to 
follow its established practices to perform an adequate technical evaluation to assure the 
design of the product it was procuring would meet the customer's needs before 
subcontract award and after." (R4, tab 8 at G-312) DCAA found that the failure to use 
sound business judgment resulted in KBR being unable to self-perform the trash removal 
services and outsourcing the efforts (id. at G-314). DCAA also determined that KBR 
failed to take adequate action to maintain the delivered vehicles potentially resulting in 
long term damage to the vehicles (R4, tab 8 at G-312). 
19. On 4 October 2012, the ACO issued a final decision asserting a monetary 
claim against KBR for $2,285,026, the total burdened amount for overpayments 
corresponding to 15 trash trucks the government deemed unallowable based on DCAA's 
24 May 2011 audit report. The ACO determined that KBR's incurred costs were not 
reasonable under FAR 31.201-3, Determining reasonableness, alleging that KBR failed to 
use prudent business judgment because: 
(R4, tab 15) 
There were many failures throughout this procurement 
action contrary to KBR's Procurement Procedure Guidelines; 
e.g. inadequate technical evaluation at pre-award; lack of 
quality inspections at delivery; and failure to aggressively act 
on the documentation contained in procurement file which 
noted severe flaws with the equipment, were all missed 
opportunities for KBR to subjugate this acquisition. 
20. On 21December2012, KBR timely filed its notice of appeal to the Board 
appealing the 4 October 2012 final decision. 
5 

DECISION 
Prior to the U.S. Court of Appeals for the Federal Circuit's (CAFC's) decision in 
Sikorsky Aircraft Corp. v. United States, 773 F.3d 1315 (Fed. Cir. 2014), KBR had filed a 
motion to dismiss this appeal for lack of jurisdiction, asserting that the government's 
monetary claim was time-barred under the CDA's statute of limitations. The CAFC held 
in Sikorsky that the statute oflimitations is no longer jurisdictional. Id. at 1322. We 
subsequently directed the parties to submit supplemental briefing on their views on the 
effect of the CAFC's decision in light of the pending motion to dismiss (see Bd. corr. dtd. 
11December2014). We granted KBR's request that the Board convert its pending 
motion to dismiss to one for summary judgment, and directed the parties to submit 
additional briefing (see Bd. corr. dtd. 19 February 2015). In response to our order, KBR 
submitted a motion for summary judgment on 10 March 2015 and the government filed 
its opposition on 10 April 2015. 
In moving for summary judgment, KBR re-asserts its contention that the 
government's claim is time-barred under the CDA's statute oflimitations. Since a 
disposition that the government's claim is untimely would bar the government's recovery 
in this appeal, KBR's contention is treated as an affirmative defense. Kellogg Brown & 
Root Services, Inc., ASBCA No. 58175, 15-1BCA~35,988 at 175,825. KBR, as the 
party asserting the defense, bears the burden of proof. Id. 
The guidelines for summary judgment are well established; the granting of 
summary judgment is appropriate where there are no genuine issues of material fact and 
the movant is entitled to judgment as a matter oflaw. Celotex Corp. v. Catrett, 477 U.S. 
317, 322 (1986); DIRECTV Group, Inc. v. United States, 670 F.3d 1370, 1374 (Fed. Cir. 
2012). The movant has the burden to establish that there are no material facts in dispute. 
A material fact is one which may affect the outcome of the case. Anderson v. Liberty. 
Lobby, Inc., 477 U.S. 242, 248 (1986). All reasonable inferences are drawn in favor of 
the non-movant. Id. at 255. At the summary judgment stage, we do not resolve 
controversies, weigh evidence, or make determinations of credibility. Id. 
The issue before the Board is the date the government's claim accrued. The CDA 
requires a claim by the government against a contractor to be "submitted within 6 years 
after the accrual of the claim." 41 U.S.C. § 7103(a)(4)(A). It is undisputed that the 
government's claim was asserted in the 4 October 2012 final decision, and thus, to be 
timely under the CDA the claim could not have accrued prior to 4 October 2006. While 
the CDA does not define "accrual of the claim," FAR 33.201 defines that term, effective 
on the date of the contract award, as follows: 
Accrual of a claim means 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. For liability to be fixed, some 
6 
l 

injury must have occurred. However, monetary damages 
need not have been incurred. 
"The events fixing liability should have been known when they occurred unless they can 
be reasonably found to have been either concealed or 'inherently unknowable' at that 
time." Raytheon Missile Systems, ASBCA No. 58011, 13 BCA ~ 35,241at173,017 
(citing Holmes v. United States, 657 F.3d 1303, 1317-20 (Fed. Cir. 2011)). This "should 
have known" test includes a reasonableness component and turns on what facts are 
reasonably knowable. Id. 
To determine the claim accrual date, we begin with examining the legal basis of 
the claim. Gray Personnel, Inc., ASBCA No. 54652, 06-2 BCA ~ 33,378 at 165,475. 
The contract included FAR clause 52.216-7, Allowable Cost and Payment, whereby the 
government would reimburse KBR for all allowable costs it incurred during contract 
performance, including payments to subcontractors. To determine what is allowable, the 
clause refers to FAR Part 31.2. In his final decision, the ACO asserted a monetary claim 
demanding the return of payments made in connection with 15 of the 20 trash trucks 
purchased by KBR that were deemed unallowable (SOF ~ 19). The legal basis of the 
government's claim is FAR 31.201-3, Determining reasonableness, which provides, 
effective on the date of contract award, that: 
(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. 
Reasonableness of specific costs must be examined with 
particular care in connection with firms or their separate 
divisions that may not be subject to effective competitive 
restraints. No presumption of reasonableness shall be 
attached to the incurrence of costs by a contractor. If an 
initial review of the facts results in a challenge of a specific 
cost by the contracting officer or the contracting officer's 
representative, the burden of proof shall be upon the 
contractor to establish that such cost is reasonable. 
(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; 
7 

(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. 
Here, the ACO relied on subparagraphs (b )(3) and ( 4) of the provision, determining that 
KBR's reimbursed costs were not reasonable because it failed to take prudent business 
actions in procuring the trash trucks by not complying with its own procedural guidelines 
including "inadequate technical evaluation at pre-award; lack of quality inspections at 
delivery; and failure to aggressively act on the documentation contained in procurement 
file which noted severe flaws with the equipment" (SOF ii 19). For the purposes of claim 
accrual, we must determine the date upon which the government knew or reasonably 
should have known that it possessed a claim against KBR. 
KBR contends that there are no material facts in dispute and it is entitled to a 
finding that the government's claim is time-barred under the CDA's statute of limitations 
as a matter of law. KBR advances two alternative claim accrual dates that independently 
bar the government's recovery, both more than six years before the date of the 
4 October 2012 final decision. KBR's initial argument is that the government's claim 
accrued no later than 17 March 2005, the date upon which the government paid or had 
paid KBR's invoices with respect to purchase orders JP01021, JP01957, JPOl 136 and 
JPOl 174 for a sum total of 14 delivered trucks. At that point, KBR alleges that the facts 
demonstrate that all events fixing its potential liability were known or should have been 
known because the government knew that the trucks were purchased between April and 
July 2004, provided consent to KBR to purchase the trucks, knew the trucks were 
delivered and found unsatisfactory, paid KBR's invoices with respect to four of the five 
purchase orders, and knew KBR attempted to recover its payments from Najd for the 
unsatisfactory condition of the delivered trucks. (App. mot. at 8) The government 
counters that its personnel did not review the specifications or the proposal that led to the 
award of the purchase orders, did not know about KBR's 29 January 2005 memorandum 
that identified problems associated with the trucks, and were unaware of the litigation 
between KBR and Najd (gov't opp'n at 13-14). KBR's alternative argument is that claim 
accrual occurred no later than 15 June 20067, the date upon which it alleges a government 
official, Mr. Tucker, became aware of litigation between KBR and Najd concerning the 
purchased trucks by email from KBR's attorney, Mr. Allen (app. mot. at 8). The 
government counters that the 15 June 2006 emails were devoid of any substantive details 
and only provided notice of the possible existence of litigation between KBR and Najd, 
7 We conclude that KBR meant to argue this date as the accrual date rather than 
15 July 2006 in its motion. It appears that this was a typographical error. (See 
SOF ii 12) 
8 

and that its claim could not accrue until the outcome of the litigation between KBR and 
Najd was known (gov't opp'n at 18-20). The government maintains that its claim is 
timely, accruing no earlier than 9 April 2010, the date upon which the ACO first learned 
of the underlying issues with respect to KBR's procurement of the trash trucks through 
documents submitted by KBR (id. at 15). 
We conclude that KBR has failed to carry its burden of proving that the 
government knew or should have known its potential claim accrued on either date 
advanced by KBR. Contrary to KBR's assertions, the government's consent provided to 
KBR prior to the issuance of the purchase orders to Najd and its subsequent payment of 
KBR's invoices for 14 trucks by 17 March 2005 in and of themselves do not demonstrate 
that the government actually knew or was even aware that the trucks were faulty and 
non-functional upon payment. Nor do the 15 June 2006 emails, on their face, show that 
the government knew that the underlying dispute between KBR and Najd involved 
KBR's attempt to recover its payments made to Najd due to the unsatisfactory condition 
of the trucks. The "should have known" test for claim accrual involves a reasonableness 
component, determining whether the events fixing liability were reasonably knowable to 
the 
claimant. The government asserts that it was not aware of the 29 January 2005 
memorandum in which KBR inspected and first learned of the trucks' deficiencies when 
it paid KBR's invoices. The government also asserts that it was unaware of the condition 
of the trucks until 9 April 2010 when the ACO received documents that revealed the 
issues surrounding KBR's procurement of the trucks. Drawing all reasonable inferences 
and viewing the evidentiary record in a light favorable to the non-movant, here the 
government, it is simply not clear when the government should have known of the claim. 
Triable issues exist as to when the statute of limitations began to run and further 
development of the record is necessary. See Raytheon Co., ASBCA No. 58849, 15-1 
BCA,-i 36,000 at 175,868 ("Summary judgment is not normally appropriate where 
reasonableness and subjective knowledge are facts at issue."). Therefore, summary 
judgment is not appropriate. 
CONCLUSION 
Appellant's motion for summary judgment is denied. 
Dated: 3 February 2016 
(Signatures continued) 
9 
~ 
RICHARD SHACKLEFORD 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 

I concur 
//U0~-
MARK N. STEMPLER 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
MARK A. MELNICK 
Administrative Judge 
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. 58465, Appeal of Kellogg 
Brown & Root Services, Inc., rendered in conformance with the Board's Charter. 
Dated: 
10 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals