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Faced with the prospect of missing out on the Army's most lucrative logistics contract in Iraq, a pair of teams of defense contractors is challenging the service's decision to award the work to three rival companies.

Last week, Contingency Management Group LLC, a team composed of AECOM Government Services, Shaw Group and PAE Government Services, filed a protest with the Government Accountability Office, claiming that the Army's Sustainment Command improperly evaluated the group's proposal for the Logistics Civil Augmentation Program (LOGCAP) IV contract. The team is seeking a stay of the new contract until GAO can review the July 11 protest.

Two days later, IAP Worldwide Services Inc., a Cape Canaveral, Fla., contractor, filed its own protest, also citing improper technical or price evaluations, according to Michael Golden, GAO's chief procurement attorney. IAP led a team of contractors that included industry giants Lockheed Martin, CACI and Blackwater. Officials with Contingency Management Group and IAP both declined to discuss the reasons for the protest.

The Army awarded its mammoth 10-year LOGCAP IV contract last month to three firms: the incumbent contractor, Kellogg, Brown and Root Services of Houston; former contract holder DynCorp International LLC of Fort Worth, Texas; and Fluor Intercontinental Inc. of Greenville, S.C. The three companies are each capped at $5 billion per year, although the Army does not expect the firms to reach the maximum value in any given year.

A fourth contractor, Serco Inc. of Vienna, Va., was awarded a $225 million support contract last February. The Army says Serco will assist in its planning and provide independent cost estimates, but will not play any oversight role or conduct any inherently governmental work.

In an e-mailed statement, KBR deferred questions about the protests to the Army, stating only that the company is "proud to have been chosen as one of three logistics support providers under the LOGCAP IV contract. We look forward to continuing our service to the U.S. forces deployed in the Middle East."

The three prime contractors will compete to deliver fuel, water and food, as well as field operations such as postal services, laundry and sanitation, to troops stationed in Iraq and Afghanistan. The indefinite quantity/indefinite delivery contract has a one-year base with nine option years and could be worth as much as $150 billion.

The use of multiple contractors is a departure from the sole-source strategy the Army has employed since the first LOGCAP contract was awarded in 1992. The change is "designed to enhance competition and reduce overall risk," said Daniel Carlson, a spokesman for the Army.

Previous incarnations of the logistics contract relied primarily on cost-plus task orders in which the Army and the contractor negotiated a price based on an estimate and adjusted the cost as needed. The government then paid the contractor a base reimbursement fee -- typically 1 percent -- on every task order and an additional 2 percent award fee if the work was done efficiently and honestly.

But watchdogs say the contract has been prone to abuse. KBR, which until recently was a subsidiary of Halliburton, was roundly criticized for its work on the 2001 LOGCAP III contract. Reports by GAO, the Defense Department inspector general and the Defense Contract Audit Agency found KBR overbilled the government for fuel and failed to justify $1.8 billion worth of work in Iraq and Kuwait.

And just days after the Army awarded the LOGCAP IV contract, the Special Inspector General for Iraq Reconstruction released a report alleging that KBR provided its employees with better housing than U.S. soldiers, overspent on food by $4.5 million and failed to provide accurate measurements of the fuel services it provided. KBR is in the process of reviewing the report, company spokeswoman Heather Browne said.

DynCorp, meanwhile, has been rapped for providing vague invoices on a State Department contract in Iraq, while Fluor was heavily criticized for its work on a temporary housing contract for Gulf Coast residents in the wake of Hurricane Katrina.

The Army plans to begin using its new LOGCAP IV contract in October, although the protests could delay its implementation. KBR's current LOGCAP contract expires in December, but the Army could exercise an option and extend it if needed.

COMMENTS

• Couldn't resist writing a comment, and very gladding that someone such as Milton Manaki is honestly expressed him in words he wrote against Bosnia. For his information and all of them didn't know, Bosnia has a Army contingent as part of coalition which proves our dedication in Operation of Iraq Freedom and our willing to help US Army as well. So this is our mission too. Macedonians are nothing but jealous chauvinist cowards. No more comments and come and post the when you get competent to do so. Term TCN has economy meaning which EUROPE has nothing to do with and Bosnia is European Country, so every treating of Bosnians as TCN is discrimination. Why most of the Americans hates Bosnians when it comes to the work and KBR. I'll tell you why. In the morning, we come to the work and say "Good morning to everybody" even we know that most of the American co-workers don't reply Next thing is review of Business mail while American co-workers check and write their personal emails and laughing as crazy without sharing fun. Phone calls are available to make 4 hours after the last American co-worker finish talking to his family. Due the client service we hang up the phone, get up the chair and say "How can we help you?" unless some High ranking client looking for a blank Form, then American co-workers stand up fighting each other to win and help the Boss. We go to lunch 11:00 and get back to work 11:30 while American co-workers are still in DFAC where talking to the incoming buddy ends up waiting so they together go to the PX. We continue to work while American co-workers are still in PX or they took a nap in their rooms. We work 12.5 hours and write 12 hours in timesheet (lunch time is not included in work time) while American co-workers work 12 (including 2 hours of personal phone calls, 2 hours of personal emails, 2 hour of lunch, 2 hours of nap, 2 hours of dinner and 2 hours of talking nonsense, and write 12 hours in timesheet. We leave the office with Good night to everyone even no reply come to us from American co-workers And on the end WE ARE HERE TO MAKE MONEY ONLY FOR OURSELVES. We are sick and tired of parasites expecting the Bosnians react and do every task ordered. If this has no sense, Recruiters would never get back to Bosnia for recruiting events. L.E.D Posted April 6, 2008 10:22 AM
• "Why do we employ Bosnians, why don't we pump money into our own economy?" Because it's the common business sense for every company on this planet to employ less paid workers. Why do you make shoes in China instead in US? 'Cause they are cheaper, right? And yes, Bosnians are way less paid than Americans, and yes, most of Bosnians do their jobs way better then most of Americans do. As a matter of fact, most of Bosnians are more qualified for their jobs than most of the Americans are. And to say how Bosnians are "very bad people" is ridiculous - American military and KBR were always more then welcome in Bosnia, and in fact, I can't remember any other country that welcomed US military in better way than Bosnians did. And if somebody has their own personal issue with some Bosnian, or can't recognize cultural and/or religious diversities - well, I'm sorry but that's only his personal problem, not a Government or tax related issue. JK Posted April 6, 2008 10:00 AM
• You people don't have a clue what country is Bosnia, Croatia or Macedonia. When Americans get there we ware so welcomed and yes Bosnians are paid so much less then American citizens and they are performing job much better then us. I witness new hires coming from US and they don’t know anything about computers, I mean they don’t have basic computer skills. I received help from Bosnian employees that I work with, they are lovely people and they are not rood as us. Come on people ask your self and you Jim Rock if you ware so good and dedicated to your work how come you was laid from your company?? I wish all of us can look up to Balkan people and be such a nice as they are. Tanja Posted April 2, 2008 5:00 AM