KBR: Kickback and Bid rigging


From the Final Forensic Audit Report of Iraq Reconstruction Funds

12th July 2012

Kickbacks

Mr. Anthony Martin, a subcontracts administrator and subsequently a subcontracts manager with Kellogg Brown & Root, received kickbacks from the managing partner of a Kuwaiti company to award a subcontract related to U.S. military supply lines between Kuwait and Iraq. In conjunction with his duties to solicit bids from prospective subcontractors and negotiate and award Kellogg Brown & Root subcontracts, Mr. Martin selected the Kuwaiti company’s bid and then added $200,000 to the subcontract amount which he then received as his kickback. Mr. Martin was sentenced to one year and one day in prison followed by two years of supervised release and was required to pay $200,504 in restitution. (p 14)

Bid rigging

Mr. Jeff Mazon, a materials and property procurement manager for Kellogg Brown & Root Services, Inc., the prime contractor for the government under the Logistics Capabilities contract, inflated the bid from one subcontractor and then inflated the bid from a second subcontractor by a greater amount to make the first subcontractor appear to be the lower bidder. Kellogg Brown & Root Services subsequently awarded the contract to the lower cost first subcontractor. The scheme resulted in Kellogg Brown & Root Services paying an excess of $5.5 million to the subcontractor. Mr. Mazon was sentenced to 1 year probation and 6 months of home confinement and was required to pay a $5,000 fine. (p13)

 

We found weaknesses in Kellogg Brown & Root Services, Inc.’s fuel receiving, distribution, and accountability processes of such magnitude that we were unable to determine an accurate measurement of the fuel services provided under the task order. These were material weaknesses that could result in the improper use of fuel. (p7)

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