KBR rejects those assertions. The company has "been working since last year with these organizations in responsibly planning our support to the drawdown of military forces in Iraq," writes company spokeswoman Heather Browne in an email to Mother Jones.
Federal bean counters are concerned with more than just KBR's inflated contracts. In fiscal 2009 alone, the DCAA identified $20.4 billion in questionable billing, and another $12.1 billion in unsupported cost estimates, by contractors in Iraq and Afghanistan. Together, that's more money than any individual handout to the biggest beneficiaries of the financial bailout.
In October, the Pentagon transferred Stephenson to its payroll department. That move came after the Government Accountability Office complained about auditing irregularities on Stephenson's watch. GAO even alleged that some DCAA reports had been modified to favor contractors—which suggests that the companies' waste in Iraq and Afghanistan may be even worse than already known. (Stephenson could not be reached for comment.) But even before her demotion, Stephenson's agency had little leverage with contractors. All the DCAA can do is make recommendations to an alphabet soup of other Pentagon bureaucracies that routinely insist that contracts and regulations prevent them from playing hardball with contractors and their paychecks. At the November hearing, Shays, the co-chair of the contracting commission, chastised a Defense Contract Management Agency representative for failing to withhold any payments to contractors—even after the DCAA had expressed doubts about the amounts the contractors were charging. "It is simply outrageous that DCMA did not respond to DCAA's findings and have any withholds," Shays said. "And it was unfortunate that DCAA did not have a way to see that resolved."
The DOD's inertia on contractor accountability is so complete that its agencies can't say with any certainty how many contractors are currently in Iraq and Afghanistan. One April 2009 estimate put the number at 160,000; a separate DOD study a month earlier said it was 240,000. The dysfunction has angered some Iraq War hawks, like Shays and contracting commission member Dov Zakheim—a Bush-era undersecretary of defense who helped manage the war's initial finances. Zakheim upbraided several Pentagon officials in that November hearing for not keeping contractors accountable. "We've been at war for eight years in Afghanistan, long enough for me to actually start forgetting about what it was like at the beginning, when I was there," he said. "Eight years in Afghanistan, and we haven't resolved something like this, which I would have thought is absolutely critical."
But KBR will be in the hot seat at next week's hearing—and on the heels of the Balad report, that seat's now likely to be a lot hotter. "We're hoping to find out at this hearing how much progress KBR has made toward a viable drawdown plan with realistic assumptions," Tiefer says, adding: "I'm personally hoping to receive suggestions for how to reform monopoly cost-plus contracts like KBR's." Company spokeswoman Browne says KBR is ready to state its case, and is in the process of drafting a response to the inspector general's report.
For now, however, it's hard to see what the commission or the federal government can do to derail the KBR gravy train. Bases across Iraq remain dependent on the firm's contractors, and that dependency is only likely to increase as more troops come home. "In essence…we basically said that KBR is too big to fail," Shays said last May. "So we are still going to fund them."