Thursday, November 5, 2009

Houston-Based Contractors in Iraq Face Cutbacks


When President Obama won the presidency at about this time last year, he did so in part by declaring his consistent opposition to the war in Iraq and his promise that as president he would bring an end to American military conflict in Iraq as quickly as would be considered responsible. The President seems to be moving in this direction, with the current plan to have all American forces out of that country by December 2011. The gradual withdrawal of troops affects not only members of the military but also the thousands of civilian contractors who are currently working in Iraq. There is no need for a support service to be present in order to clean soldiers' laundry if there are no soldiers around. With that in mind, an audit just completed by the Defense Department shows that a Houston-based company did not seem to get the memo about the policy change.

KBR Inc. is a private company that contracts with the United States military to provide a wide variety of services. They have a ten-year deal worth $33.8 billion that was signed in 2001. This figure amounts to $8425 a month in salary and benefits for each full-time employee. The Pentagon is charging that the KBR Inc. may be unnecessarily increasing the number of employees in the war zone as a way of earning more profit. The company has been ordered to cut more than 2000 jobs or face $200 million in penalties.

As an excerpt from the audit states, "Each day that passes without taking action results in continued overstaffing and inefficiency." KBR Inc. argues that they have been waiting to make staff cuts until the administration's plans for drawdown of its forces.

You may not be facing an audit and financial repercussions from the Defense Department, but there may be another instance in which the reputation of your business is being threatened. If this is the case, you should seek legal representation. There are attorneys at Bertolino LLP who are experienced in the area of business litigation. Please contact our Austin, Houston, and San Antonio office today to discuss your case.

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