Pentagon to KBR: Cut workforce in Iraq

The Iraq war is getting too expensive, according to Defense Department auditors, and KBR is part of the problem. The contractor faces close to $200 million in penalties for keeping too many bodies on its payroll in Iraq, and it is being pressured to cut back.

For six years, KBR has increased its staff, even as troop levels have declined. "Each day that passes without taking action results in continued overstaffing and inefficiency," says a report from the Defense Contract Audit Agency quoted by The Associated Press. On the other side of the issue, though, is a $33.8 billion, 10-year contract with KBR signed in 2001.

The recent flare-up over billing and management practices isn't new. KBR and Defense Department auditors have battled over billions for several years, with critics of the contractor claiming its inefficiency has risen to the level of price-gouging and even fraud.