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Army Gives KBR Rare Ultimatum for Fixed Price Contract Revision; Tension Mount
Federal Times has reported on the mounting tensions between contractor KBR Inc. and the US Army over an ultimatum to provide a firm, fixed price on remaining work to close out the $38 billion Logistics Civil Augmentation Program (LOGCAP) III.
LOGCAP III is the 12-year-old logistics contract that has supported US military logistics operations in Iraq. The Army awarded the contract in 2001 and issued 160 tasks for everything from dining services to delivery of housing for civilian and military personnel. The original contract was considered a “cost plus” contract, which means KBR was paid its costs plus a guaranteed profit; the Army seeks to revise the pricing terms on the final work to be done on the contract to be firm, fixed pricing. KBR filed a lawsuit in response seeking to keep the “cost plus” nature of the contract.
The dispute started in July 2012, at that time the Army decided contract closeout activities must be performed on a fixed-price basis meaning KBR would need to provide a fixed dollar figure for the remaining work and absorb any excess costs. KBR responded they were unwilling to accept that due to the lack of scope or duration of work that needs to be completed.
KBR filed a case with the Government Accountability Office that was thrown out on jurisdictional grounds. The case was refiled in the US Court of Federal Claims and accused the Army of using the wrong type of contract, acting in bad faith and violating procurement regulations.
In emails submitted as part of the lawsuit, Army contracting officer Robert Egan told KBR he would not “enter further communication exchanges with” KBR’s contract team until he saw the FFP deliverable. KBR responded they were unwilling to accept such a proposal. KBR responded to Federal Times with a statement noting the company enjoys “frank, open and continuous communications with the Army.”
KBR has been paid enormous amounts for well
NPR Releases Online Series Examining the Dangers of the Texas Construction Industry
NPR released two articles this past week examining the dangers of the Texas construction industry and the too-common practices that often lead to wage theft, poor work conditions and injuries.
Commercial construction and homebuilding are staples of the state’s economy. Years of illegal immigration have driven down wages of construction workers. The economic crash of 2008 brought its own issues besides the decrease in construction. Many workers make far less than minimum wage and often take home $4 or $5 an hour. The workers cheated out of their wages or paid very low wages continue working because of the promise of pay from one week to another. These workers are often classified as independent contractors rather than employees. The classification of independent workers makes them responsible for their state and federal taxes.
The issue of pay is coupled with the dangerous nature of the job. According to the Worker’s Defense Project, there were 10.7 deaths per 100,000 Texas construction workers in 2010. In comparison, California had a rate of 5.2 deaths per 100,000 construction workers. The study also revealed one in every five Texas construction workers will require hospitalization due to injuries sustained on the job.
Doyle Raizner has represented many clients over the years whose injuries were a result of poor work conditions and an employer’s failure to honor their obligation to safety. The construction industry in a dangerous field in Texas and regulation is the ultimate route to safety.
Doyle Raizner Files Negligence Suit on Behalf of Worker Injured on Grounded Vessel off Coast of Chile
Doyle Raizner has filed a negligence lawsuit against T&T Marine Salvage and Titan Maritime on behalf of a worker who was thrown 30 feet in the air and dropped on the beach landing on his back.
The plaintiff was an employee of T&T Salvage in Texas and the company sent him to Chile to work on the salvage of a grounded vessel offshore Puerto San Antonio. While on the shore operating a winch to unload cargo from the ship, the line on the winch broke. A cable from the vessel en-wrapped the plaintiff’s leg and body and launched him into the air.
After landing on the beach, he was rushed to the hospital where a pain shot was administered and the plaintiff was released. He was taken to a motel for three days without pain medication while waiting for a flight back to Texas. The plaintiff was taken directly from the airport to an urgent care clinic chosen by T&T Salvage where a pulled muscle was diagnosed, light duty and painkillers were prescribed. The plaintiff sought an independent physician who diagnosed two protruding discs in his back after review of a MRI.
T&T Salvage negligently failed to provide safe, properly maintained equipment and work facilities for the plaintiff’s use to carry out his job duties. The company also failed to provide proper training and supervision. Managers of T&T Salvage and Titan Maritime had obligations to safety they failed to uphold by proceeding with conscious indifference to the rights, safety and welfare of the plaintiff despite having awareness of the risk involved.
Doyle Raizner stands behind this client in their fight for justice and accountability for his injury and inability to work.
Doyle Raizner Files Workers’ Comp Bad Faith Case in Arizona against Gallagher Bassett
Doyle Raizner has filed a workers’ comp bad faith case against Gallagher Bassett and Ace American Insurance on behalf of an injured worker whose claim for benefits was wrongfully denied and unreasonably delayed. Ace American Insurance issued the workers’ comp insurance coverage under the Arizona Workers’ Compensation Act. Gallagher Bassett adjusts insurance claims on behalf of Ace American under the same act.
The plaintiff was injured in the scope and course of his employment in 2011, when another vehicle hit at a high rate of speed the truck he was driving. The collision resulted in traumatic brain injury, post-traumatic headaches, post-concussion syndrome, chest injuries, cervical spine injuries, among other injuries.
The plaintiff’s claim for benefits was initially accepted by Ace American and Gallagher Bassett. However, Ace American and Gallagher Bassett began to ignore their obligation to timely and appropriately approve reasonable and necessary medical treatment recommended by the plaintiff’s treating physician. Due to the denial of timely benefit payments to which the plaintiff was entitled, an attorney was hired to help secure the workers’ compensation benefits. A final and binding order was issued by the Industrial Commission of Arizona and required Ace American and Gallagher Bassett to provide the treatments. The commission noted the carrier had no evidence to controvert the plaintiff’s right to treatment and had not even bothered to appear to attempt to justify its wrongful conduct.
Ace American, as the plaintiff’s workers’ compensation insurer, breached their duty of good faith and fair dealing by refusing to properly investigate and effectively denying necessary medical care and other benefits, without any reasonable basis to do so. Gallagher Bassett acts and omissions were performed by it in its individual capacity and as an agent for Ace American. Gallagher Bassett knew the claim was not fairly debatable and substantially assisted or encouraged Ace American in delaying or denying the claim without a reasonable basis.
Ace American and Gallagher Bassett placed unnecessary
Former VA Researcher Testifies Before House Committee about Burn Pit Research Cover-up
A former Veterans Affairs researcher testified before the House Committee on Veterans Affairs this week about the organization’s efforts to minimize research that supports claims of Gulf War Illness and illness from burn pit exposure.
Steven Coughlin was an epidemiologist in the VA’s public health department until he resigned over a request to retract his claims concerning the concealed information and admit he had made a mistake. Coughlin also said “if the studies produce results that do not support the office of public health’s unwritten policy, they do not release them. “ He also testified about a panel of outside experts hired to study neurological connections to Gulf War illness for the Institute of Medicine. Coughlin maintains the panel was stacked in favor of those who believe Gulf War illness is psychological rather than neurological. Coughlin added “anything that supports the position that Gulf War illness is a neurological condition is unlikely to ever be published.”
Coughlin’s allegations were countered by Victoria Davey, chief officer of VA’s office of public health and environmental hazards. Davey never directly addressed the accusations levied against the VA but talked about the “cutting-edge” research the VA has conducted.
Coughlin was backed by Lea Steele, a researcher at the Veterans Health Research Program at Baylor University who said the VA has not managed an effective program. Steele echoed Coughlin when she said “studies consistently show Gulf War illness is not due to war trauma.”
Steele referenced the panel Coughlin viewed as stacked in favor of Gulf War illness as a psychological illness. The panel studied veterans from the past 20 years rather than a segment of Gulf War veterans. The symptoms of this broad group were lumped together so that neither cause nor treatment for “chronic multisymptom illness” could be found. Steele likened this to “medical malpractice”.
A Gulf War veteran and appointed member of the Congressionally Directed Gulf War Illness Research Medical Program,
KBR’s Fourth-Quarter Profits Drop 67 Percent
KBR reported a net income of $30 million for the fourth-quarter of 2012. Chief Executive Officer Bill Utt called it “a disappointing year” but later stated 2013 would bring “a robust series of new opportunities across each of our business units.”
For the same period a year earlier, KBR reported profits of $90 million. Utt accredited the sharp decline in profits to difficulties in the company’s minerals and US construction businesses. The sector of the company that did perform well was the hydrocarbons arm. Its profits increased 76 percent from the same period a year earlier resulting in a $174 million net income.
Interestingly, the released statement made no mention of the current litigation against KBR. In November, a jury awarded $85 million to twelve Oregon Army National Guard soldiers for negligence due to the contamination of a water treatment plant in Iraq. KBR, in turn, sued the US government to honor a secret indemnity agreement signed by the secretary of the Army in 2001. The agreement purports to shield KBR from financial costs associated with unusually hazardous risks including “sudden or non-sudden release of hydrocarbons or other toxic or hazardous substances or contaminants into the environment.”
They also did not mention the lawsuit filed by the United States in November. In that civil complaint, the government accuses KBR of inflating claims for the delivery and installation of trailers to house troops in Iraq.
The jury verdict for the twelve plaintiffs in Oregon is significant for the role it will play in the future trials for the more than 150 soldiers awaiting their day in court. The financial impact for KBR potentially could be more than $1.1 billion if the current individual case value trend of $7 million continues. The case is currently being reviewed by the Department of Justice and the Department of Defense. We will continue to blog updates as they develop.
Mike Doyle Discusses the KBR Verdict on Current TV
Mike Doyle appeared on Current TV’s top rated show “The Young Turks with Cenk Uygur” to discuss the $85 million verdict against KBR and the secret indemnity agreement.
Click here to watch the segment.
Doyle Raizner Files Suit on Behalf of Injured Galveston Welder
Doyle Raizner has filed suit against Berry Scaffolding on behalf of a welder required to use scaffolding provided by the company while working on a moored rig. Berry Scaffolding was responsible for the safety of the welder while on the scaffolding. The scaffolding was not erected safely and fell causing the welder serious bodily injuries.
Due to negligence and gross negligence on behalf of Berry Scaffolding, the injured welder has a loss of earning capacity along with medical expenses now and in the future. Berry Scaffolding was remiss in its safety obligations under the general maritime law of the US. This case falls under admiralty jurisdiction of the court due to the incident in question occurring in the navigable waters of the US.
Doyle Raizner stands behind our injured client in pursuing justice for Berry Scaffolding’s gross discount viagra negligence and misconduct.
KBR’s Motion for Summary Judgment Denied by an Oregon Judge
In more legal maneuvering, KBR reacted to fraud and negligence claims concerning Qarmat Ali water treatment plant by filing a motion for summary judgment. The Honorable Paul Papak denied the motion.
KBR professed innocence concerning the fraud allegation by claiming it did not make misrepresentations and did not deceive the Oregon Guardsmen. KBR claimed they did not know sodium dichromate was in the soil at the site until July 2003. The Court found this false. The Court stated “[T]he record provides evidence from which a jury could conclude that KBR intentionally attempted to downplay when it became aware of the presence of sodium dichromate and also when it learned of the potential contamination and hazards associated with the contamination.”
As to negligence, KBR claimed that it owed no duty to inform the men of the risk of sodium dichromate poisoning. The Court found KBR did have a duty to protect members of the US Army and to uphold OSHA standards. The ruling stated “KBR failed to meet the standard of care set forth” thus causing the soldiers damages. The ruling brings the
Veterans claims closer to trial, which is set to begin in Portland, Oregon on October 9, 2012.
District of Oregon Continues to Reject KBR’s Efforts to Avoid Trial
On August 31, 2012, the United States District Court for the District of Oregon, Judge Papak presiding, issued its most recent ruling denying KBR’s efforts to avoid trial of the claims of Oregon Guard Veterans poisoned by sodium dichromate as a result of the misconduct of KBR at the Qarmat Ali Water Treatment Plant, near Basra, Iraq.
In its discussion of KBR’s conduct, the Court concluded that KBR failed to inform the Oregon Veterans of the sodium dichromate contamination at all and delayed informing the United States Army Corps of Engineers
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of the contamination until August 12, 2003, even though KBR knew of the contamination months before. The Court continued its decision by rejecting KBR’s argument that there was insufficient medical evidence to support the Oregon Veterans’ claims that they inhaled, ingested, and came into contact with sodium dichromate due to KBR’s wrongdoing. Among the evidence cited by the Court in refusing KBR’s request for summary judgment was the opinion of Dr. Arch Carson, M.D., of the University of Texas School of Public Health, the medical records of the Oregon Veterans, and the opinions of Dr. Herman Gibb, a world-renowned expert in the study of sodium dichromate. The Court held, “[Dr.] Carson, a qualified expert, has offered his opinion, based on reliable application of reliable principles and methods to sufficient data, that these damages were caused to a reasonable degree of medical probability by such exposure. This opinion is sufficient as a matter of Oregon law to permit the prayer for medical personal injury damages…”
The ruling brings the Veterans claims closer to trial, which is set to begin in Portland, Oregon on October 9, 2012.Rich Text Area
