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Q: Why is KBR testifying before the Congressional Committee on Government Reform?

A: KBR was invited and is pleased to have the opportunity to appear before the Committee on Government Reform on Thursday, July 22, so we may describe our efforts in Iraq to support our troops in a very difficult, demanding and dangerous mission. We look forward to sharing our accomplishments and discussing the challenges we face as we manage the largest civilian force ever assembled to help the military and look forward to the opportunity to discuss this mission with the committee. We also welcome the opportunity to assist the Committee as it continues to fulfill its oversight responsibilities.

KBR is proud to offer its global resources at this critical time in the Middle East and is resolved to support the military while also carrying out the important responsibility to maintain oversight in the expenditure of funds. Our employees have had a significant and positive impact on the quality of life for troops and are risking their lives everyday, while providing troops housing, meals, mail and other vital services.

Q: Who is testifying on KBR's behalf before the Congressional Committee on Government Reform?

•  Alfred (Al) Neffgen, P.E. – Chief Operating Officer for KBR's Government Operations unit, Americas Region. Mr. Neffgen provides executive oversight of the company's work for the U.S. government, including the LOGCAP III and RIO projects. Mr. Neffgen has more than 20 years of experience in engineering, design, construction, facilities operations and maintenance, and project management.
Click here to read Mr. Neffgen's written testimony for the Congressional Committee on Government Reform.

•  William (Bill) Walter – Director of Government Compliance for KBR's Government Operations unit. Mr. Walter has overall responsibility for all U.S. government compliance functions, including Defense Contract Audit Agency (DCAA) audits and government interface, Federal Acquisition Regulation (FAR) compliance, cost accounting standards, pricing compliance, training and compliance policy. Mr. Walter has more than 15 years as a leading defense industry compliance consultant.

•  Charles S. (Stoney) Cox – Vice President and Former RIO Project Director for KBR's Government Operations unit. Mr. Cox most recently led KBR's RIO project, coordinating with Iraq's Minister of Oil and directors of related oil operating companies to assist in the reconstruction of Iraq's oil infrastructure following the war. Mr. Cox has more than 30 years of experience leading engineering and construction organizations in engineering design, construction management, operations and maintenance, and environmental services for domestic and international clients.

•  Keith Richard – Regional Project Manager for the Theater Transportation Mission, KBR's LOGCAP III Contract. Mr. Richard is directly responsible for the implementation and execution of logistics, transportation, movement control, maintenance and heavy lift operations in support of the U.S. and Coalition forces in Kuwait and Iraq – a mission that entails more than 700 trucks on the roads at any given time. Mr. Richard has more than 20 years experience in the transportation, logistics and shipping industries.

Q: What is the company's Code of Business Conduct?

A: The Code of Business Conduct consists of the policies relating to the ethical and legal standards of conduct to be followed by employees and agents of the Company in the conduct of its business. It is the policy of the company to comply with applicable law. Some company policies are based on the requirements of applicable law and others are just good ethics and business sense.

Q: What happens when issues are raised that question an employee's compliance with the Code of Business Conduct?

A: On those rare occasions where our employees act improperly, we discover it, we get to the bottom of it, we hold people accountable for their actions, and we do the right thing by our shareholders, our customers, and our host governments around the world.

Q: Does the company's Code of Business Conduct address/apply to government contracting?

A: Absolutely. The Code of Business Conduct applies to all of our personnel, all of our business practices in all our working locations. The Code of Business Conduct further requires employees working in the government contracting arena to receive specific training on government contracting regulations and procedures. We encourage any and all employees throughout the business to promptly report any violations of our company’s Code of Business Conduct.

Q: Why are there whistleblowers testifying in front of the Congressional Committee on Government Reform? Why didn't the company uncover or solve these alleged issues on its own?

A: KBR questions the factual nature of many of these assertions – but because we take all allegations seriously, we are continuing to look into them. It's important to note that many of these issues were not legitimate claims or the issues had been resolved long before the former employees provided statements to the committee. We have a rigorous system of auditing checks and balances for precisely this purpose. In addition, our Code of Business Conduct specifically requires employees to conduct business honestly and ethically.

KBR's priority is to make certain that the troops have the food, shelter, and tolerable living conditions they need while fighting in Iraq.

Q: Does the company protect employees who raise concerns that require a review of Code of Business Conduct policies and procedures?

A: Our Code of Business Conduct strictly prohibits retribution against any employee for making a good faith report of a concern or issue. The company must, however, act accordingly towards an employee who reports an issue and also is involved in a violation of the Code of Business Conduct.

Q: As the whistleblower allegations surfaced about a month ago, what has been done since then?

A: The company immediately began reviewing the allegations. In fact, KBR independently discovered and resolved some of these issues before the allegations ever surfaced publicly to the committee. If these inquiries find that any employee acted improperly, we will address the matter promptly and directly. We will act – but only once all the facts are collected.

Q: Why are there questions about procurement practices?

A: Our operations have been subjected to extremely demanding Government scrutiny, which is important and appropriate. We welcome a thorough review of any and all of our government contracts. We have followed all government approved processes.

Q: What is KBR's procurement system?

A: KBR has a comprehensive set of instructions, procedures and policies, and our employees get training in those policies. The policies are regularly updated to stay current with Government requirements. Our procurement and subcontract administration systems include numerous checks and balances to prevent and detect procurement abuses. It was KBR’s own internal audit system, for instance, that disclosed the much-publicized situation of the two employees receiving improper payments. We disclosed that situation, made a repayment, and took appropriate action.

Q: Is KBR's procurement system approved by the government?

A: Yes. Our procurement system is regularly reviewed and approved by the DCMA for compliance with federal law and regulation. Our most recent approval was received in May 2003 and is valid for a period of three years. This validates that we operate in compliance with the guidelines set by the US government for government contractors in the procurement area.

Q: Why has the company been accused of not being forthcoming with providing documents or other requests related to audits of its government contracts?

A: The company is exceptionally forthcoming with requests for information and has complied with all government reviews of its business. We have always worked with the DCAA and we will continue to work with them in the future. At times, KBR and DCAA have disagreed on issues that were subject to audit, but we have always been able to work through these issues. We have a 60 year history of working with the government. Halliburton helped build U.S. war ships in World War II, as well as projects in Somalia, Rwanda and the Balkans.

We will continue to work with all government agencies to establish that our contracts are not only good for the United States, but also the company is the best and most qualified contractor to perform these difficult and dangerous tasks. We welcome a thorough review of any and all of our government contracts. We have followed all government approved processes.

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