New KBR chief envisions a new path for company(Army may extend contracts to help with the 'surge')

Source: Houston Chronicle

New KBR chief envisions a new path for company
CEO says despite criticisms, company is ready to emerge from Halliburton's shadow


By BRETT CLANTON
Copyright 2007 Houston Chronicle

William Utt is the first to admit he has a big job ahead of him.

As chief executive of KBR, the former unit of Halliburton Co., he must not only prove the engineering and construction firm and largest U.S. contractor Iraq can stand on its own, despite years of inconsistent financial results, but answer for problems that followed it out Halliburton's door.

Those include everything from nagging questions about overbilling for military support work in Iraq to ballooning costs at a project in Nigeria that could cut into profits during its first year as a stand-alone company.

~snip~

We've had fewer issues in the 2005-2006 time frame because we were able to develop our systems and the Army also," he said Tuesday, two days before lawmakers revived the issue."And the expectations are more clear about how we're supposed to perform that work."

KBR, now the sole contractor on the more than $20 billion contract with the U.S. Army known as Logcap, will have to compete with other companies on the next package of work, expected to be awarded in July and spread among several firms. To help fill in a hole left from having less Logcap work, KBR will raise its fees under any new contract, Utt said.

But the Army has told KBR it may extend the current contract until year's end to help support President Bush's surge of 21,000 troops in Iraq, he said.





Read more: http://www.chron.com/disp/story.mpl/chronicle/4738431.html

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Army Contracting Criticized
Senate Committee Faults Delay in Replacing KBR

By Renae Merle
Washington Post Staff Writer
Friday, April 20, 2007; Page D02

A Senate panel chastised the Army yesterday for not moving faster to award a new contract to provide logistical support to U.S. troops worldwide, even as the current contractor continued to receive critical reports from auditors, including allegations of overcharging.

The Army has said it would end the current contract with KBR early and award a new contract this summer that would divide the work among three competitors. But Sen. Carl M. Levin (D-Mich.), chairman of the Senate Armed Services Committee, asked during a hearing yesterday: "Why didn't you do it in 2004 when we first brought this to you?"

"I don't have a good answer for you," responded Claude M. Bolton Jr., assistant Army secretary for acquisitions, logistics and technology.

The panel also challenged the Army on whether the military could assume the task of providing services now provided by KBR, which is based in Houston. But Bolton said KBR's more-than-50,000 contractors in Iraq would have to be replaced with a larger contingent of soldiers. "Right now, I don't know of a better way," he said.

more:http://www.washingtonpost.com/wp-dyn/content/article/2007/04/19/AR2007041902637.html

so which is it? KBR's report that they are likely to have extended contracts to help with Jrs "surge"? Or the testimony before the senate asserting that the contracts will end early and be redistributed among other contractors?