United States v. Kellogg Brown & Root Services, Inc.
2011 U.S. Dist. LEXIS 85019
| D.D.C. | 2011Background
- LOGCAP III contract: indefinite-delivery/indefinite-quantity logistics services with cost-plus fee; government reimburses costs plus small fees.
- Clause framework: H-13 (management), H-16 (force protection), H-21 (weapons) govern contractor conduct and entitlement to payment; CENTCOM General Orders influence weapon possession.
- Regulatory backdrop: CPA Order 3 and Memorials; Iraqi MOI licensing and arming requirements; DFARS Modification 00012 (Nov. 2005) ties arming to Combatant Commander approval.
- Allegations: KBR charged government for private armed security in Iraq despite restrictions; claimed costs allegedly not allowable under LOGCAP III.
- Procedural posture: Government filed FCA suit; KBR moved to dismiss under Rule 9(b), Rule 12(b)(6), and Rule 12(b)(1); court reserved ruling on liability issues pending addressing contract interpretation.
- Court’s path: Denies motion to dismiss FCA and breach claim; grants dismissal of unjust enrichment and payment-by-mistake claims; case proceeds to discovery to resolve contract interpretation and materiality.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FCA claim is pled with particularity under Rule 9(b). | United States; sufficient notice given to KBR with specifics and internal emails. | KBR argues Rule 9(b) not satisfied due to lack of granular claim-level detail. | Rule 9(b) satisfied; allegations provide time, place, content, and context to prepare defense. |
| Whether the FCA claim states a factually false or legally false (implied certification) theory. | United States asserts legally false or implied false certification based on contract terms about allowable costs. | KBR contends contract does not expressly condition payment on compliance; liability hinges on materiality. | SAIC II standard governs implied certification; contract interpretation remains key; court declines dismissal on the factual falsity theory. |
| Whether implied false certification can survive without explicit payment conditioning language. | Certification of compliance with contract terms was prerequisite to payment. | No explicit prerequisites; not a basis for FCA. | SAIC II controls; materiality and scienter must be shown; not dismissed on this theory at this stage. |
| Whether the breach-of-contract claim remains in this Court or should proceed via ASBCA. | CDA exception allows fraud-related claims to stay; FCA claim keeps case in district court. | If FCA dismissed, breach claim should go to ASBCA. | FCA not dismissed; breach claim retained in district court. |
| Whether unjust enrichment and payment-by-mistake claims survive given an express LOGCAP III contract. | Federal pleading allows alternatives; contract governs remedies. | Express contract precludes quasi-contract claims. | Dismissed; no basis to infer absence of an express contract. |
Key Cases Cited
- SAIC, Inc. v. United States, 626 F.3d 1257 (D.C. Cir. 2010) (implied certification requires materiality; not express conditioning necessary)
- Siewick v. Jamieson Sci. & Eng'g, Inc., 214 F.3d 1372 (D.C. Cir. 2000) (implied false certification doctrine; prerequisite payment context)
- Mikes v. Straus, 274 F.3d 687 (2d Cir. 2001) (factually false vs legally false claims; conceptual framework for FCA pleading)
- KBR, Inc. v. United States, 525 F.3d 370 (4th Cir. 2008) (context of LOGCAP; discussion of contract interpretation vs FCA liability)