Wyden measure bolsters defense-contractor liability

With the passage of the National Defense Authorization Act, the Pentagon will not be able to sign agreements freeing defense contractors from liability for their actions without justifying such an agreement to Congress.

The provision, authored by Sen. Ron Wyden (D-Ore.), was maintained in the House-Senate Defense Authorization Conference report and agreed to by the Senate Friday. The House agreed to the report Thursday. The bill now goes to the president for signature.

The provision was written in response to revelations that a previously classified contract between defense contractor Kellogg, Brown and Root (KBR) and the Defense Department absolved KBR of all legal liability for their actions, even those found to be willful and negligent.

KBR was recently found to have been negligent and knowingly exposed Oregon National Guard troops and others to toxic levels of sodium dichromate, a known carcinogen.

The jury ordered KBR to pay $85 million in damages to troops exposed to the potentially deadly carcinogen – a sum that KBR is legally allowed to pass along to the federal government due to their indemnification agreement.

“We have seen that without accountability, companies like KBR are willing to needlessly put the lives of our soldiers at risk,” Wyden said. “This contractor got a get out of jail free card at the taxpayer’s expense with Congress and the public left completely in the dark.

‘From now on, contractors and the DoD will have to justify to Congress the need for indemnification. We can’t change what happened to Oregon’s citizen soldiers, but we can prevent it from happening again.”

In the run-up to the Iraq war, the engineering firm KBR secured a contract with the Department of Defense containing a classified clause freeing the contractors from all financial liability for misconduct on the job and allowing KBR to pass on all of their legal costs to the U.S. government.

The firm was found liable last month in Portland for negligently exposing Oregon guard troops to toxic levels of sodium dichromate at the Qarmat Ali water treatment facility in Iraq.

Kellogg, Brown and Root filed suit against the federal government shortly thereafter to recoup the cost of the damages and all their legal fees as allowed under their contract with the defense department.