In dismissing the lawsuit last year, U.S. District Judge Nora Barry Fischer found that "As a contractor, KBR had no authority to order military personnel to do anything, including to direct soldiers where to live or shower." She found that Maseth's death was the result of a decision by the military, which she also ruled the court has no power so second-guess under the constitutional separation of powers.

But the contractor had "significant discretion" over how to implement the military's orders, a three-judge panel of the 3rd U.S. Circuit Court of Appeals ruled in Thursday's 55-page opinion reviving the lawsuit. As such, the lawsuit doesn't involve second-guessing the military, but rather assessing the type and quality of KBR's work.

"Military control over KBR's relevant activities therefore does not introduce an unreviewable military decision into the case," the court found.

KBR may appeal by asking the entire appeals court to re-hear the case, or try to get the U.S. Supreme Court to overturn Thursday's ruling. Barring a successful appeal, the decision means the case must go back to Fischer for an eventual trial, unless it is settled, said William Stickman, an attorney representing Maseth's mother, Cheryl Harris.

"We will finally have our day in court for Ryan Maseth," he said. "We're just very pleased."

Daniel Russell, a Washington, D.C.-based attorney for KBR, referred questions to KBR spokesman John Elolf, who did not immediately issue a statement.

The building in which Maseth died was looted by locals and left with "no electrical power, electrical components, internal plumbing, doors or windows" before the military decided to renovate it, Fischer found last year. Local contractors were hired to do that work but didn't work up to American building code standards, the judge wrote.

Stickman contends KBR signed off on work orders to repair electrical problems in the building, which should have prevented Maseth's death had the work been done properly.

But Fischer found the Army's contract required KBR to maintain the "existing electrical systems" — substandard though they were — not to improve them.

Tens of billions of taxpayer dollars have been wasted through poor planning, vague and shifting requirements, inadequate competition, substandard contract management and oversight, lax accountability, weak interagency coordination, and subpar performance or outright misconduct by some contractors and federal employees. Both government and contractors need to do better.Our final report shows that the costs of contracting waste and fraud extend beyond the disservice to taxpayers. The costs include diminishing for U.S. military, diplomatic and development efforts; fostering corruption in host countries; and undermining U.S. standing and influence overseas.

The contractor workforce in Iraq and Afghanistan has at times exceeded 260,000 people and has sometimes outnumbered U.S. military forces in theater. The roughly 1-to-1 ratio sustained over the years reflects a basic operating truth that Defense Department officials expressed in testimony to the commission: The United States cannot conduct large or prolonged military operations without contractor support.

Defense doctrine has for more than 20 years held that contractors are part of the “total force” to be deployed in contingency operations. Nonetheless, the United States embarked on operations in Afghanistan in 2001 and in Iraq in 2003 without adequate planning or contract-management personnel to handle the enormous scale and numbers of contracts. In that sense and in others, America is over-relying on contractors.

Poor planning, federal understaffing and over-reliance led to billions of dollars of contracts awarded without effective competition, legions of foreign subcontractors not subject to U.S. laws, private security guards performing tasks that can easily escalate into combat, unprosecuted instances of apparent fraud, and projects that are unlikely to be sustained by the governments of Iraq and Afghanistan.

Projects that are or may be unsustainable are a serious problem. For instance, U.S. taxpayers spent $40 million on a prison that Iraq did not want and that was never finished. U.S. taxpayers poured $300 million into a Kabul power plant that requires funding and technical expertise beyond the Afghan government’s capabilities. Meanwhile, a federal official testified to the commission that an $11.4 billion program of facilities for the Afghan National Security Forces is “at risk” of unsustainability.