The $45 million receivable had been included in KBR’s prior years’ financial statements and this ruling will not have a material impact on earnings in 2014. The company will seek immediate payment.

“We are not surprised by the ASBCA’s decision as they had previously ruled in April 2012 that the Logistics Civil Augmentation Program contract did not prohibit the use of private security contractors,” said Andrew Farley, KBR Executive Vice President and General Counsel. “It is unfortunate that it took five years and significant legal expense to KBR and U.S. taxpayers to confirm that KBR acted prudently in protecting our employees and subcontractors who were supporting our troops during very challenging war-time conditions.”

The ASBCA opinion noted that the use of armed private security contractors “was both reasonable and necessary given the dangerous, life-threatening conditions under which KBR and its subcontractors were asked to perform.” It also stated that the U.S. government lacked adequate force protection for U.S. contractors and that this was a “constant problem and the commanding generals testified they did not have the resources to provide it.”

Work will be performed in Djibouti, Africa (95 percent), and Manda Bay, Kenya (5 percent); work is expected to be completed June 2015. Fiscal 2014 operation and maintenance (Navy) contract funds in the amount of $53,201,122 are being obligated on this award and will expire at the end of the current fiscal year. The Naval Facilities Engineering Command, Atlantic, Norfolk, Virginia, is the contracting activity.

ABOUT Kellogg, Brown and Root Services, Inc.

KBR is headquartered in Houston, Texas, also known as the energy capital of the world. The Company employs over 27,000 people worldwide in locations that include the U.S., Australia, Africa, the U.K., Asia and the Middle East. KBR delivers a wide range of services through its Downstream; Gas Monetization; Infrastructure; Minerals; International Government, Defense and Support Services; North American Government and Logistics; Oil and Gas; Power and Industrial; Services; Technology; and Ventures business segments, and differentiates itself as a technology-driven engineering, procurement and construction (EPC) company.

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