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The greatest risk for Staff Sergeant Ryan Maseth in Iraq didn’t come from enemy fire. Maseth was electrocuted to death due to U.S. private military contractor KBR Inc.’s shoddy electrical work. Now, for the first time, KBR is losing millions of dollars as a consequence. The Army decided to deny KBR bonuses, which were routinely awarded to the firm for “excellent” work.

According to KBR’s Security and Exchange Commission 8-K filing, they have been denied $20 million so far. Barry Piatt, press secretary for Senator Byron Dorgan (D-ND), said, “The AP reported the figure at $25 million, but we are not sure where they got that figure.” If KBR’s SEC filing is accurate, $20 million could be just the beginning. If this review process continues, they’re expecting to lose $132 million in award fees for their work from January 2008 through December 2009.  A press release from the Democratic Policy Committee on Thursday said that this is the “right call,” but only a “first step.” Senator Dorgan, the soon to retire chairman of the DPC, sat through 21 hearings about waste, fraud and corruption in military contracting since 2003. His countless hours listening to accounts of KBR’s “widespread sloppy contracting work that killed soldiers,” impacted KBR little, until now.  Dorgan said that the Army’s decision “will send a long overdue message to military contractors that they will be held accountable for their performance, but the Army needs to send that message much more powerfully.”

He isn’t satisfied with the $20 million. The Army previously paid KBR $34 million for its past electrical work, and Dorgan thinks the army should get a refund. If the Army takes Dorgan’s advice, it will review the $34 million and potentially take away KBR’s bonus. This $34 million payback would be on top of KBR’s projected loss of $132 million.

How does KBR feel about this?  KBR Director of Communications, Heather Browne, did not return our phone call or e-mail. KBR did say in their SEC filing that the firm had to take a second look at their projected earnings. In the SEC report, KBR says, “[Due to] our inability to obtain assurances to the contrary, we concluded that we can no longer estimate the fees to be awarded.”

The safety review began after Dorgan and Senator Robert Casey (D-PA) formally requested that the Army review KBR’s work following the electrocution death of Staff Sgt. Ryan Maseth. Task Force SAFE found KBR exposed soldiers to life-threatening risks with their electrical work.  According to Piatt, separate independent inspection teams from the U.S. Army Corps of Engineers and the U.S. Army Combat Safety Center faulted KBR’s “gross incompetence,” including a Level III CAR – a serious action just one step below the possibility of suspension or termination of a contract – from the Defense Contract Management Agency in September 2008.  Dorgan says that KBR’s electrical workers were “often unqualified, poorly trained and poorly supervised.”

When DCBureau asked Piatt about other KBR negligence issues, he named a number of government organizations currently inspecting KBR. DCBureau’s investigations involving sodium dichromate at Qarmat Ali and the use of burn pits at Joint Base Balad are two of the issues under review. Piatt tells us that the U.S. Government Accountability Office is investigating the use of burn pits. The Department of Defense Inspector General is looking into the sodium dichromate issue.

What will these investigations mean for the KBR? Piatt says that Senator Dorgan “certainly expects the Army to continue to hold KBR accountable but believes it will take continued and aggressive oversight by Congress to ensure that it happens.” It remains to be seen whether or not denying KBR bonuses will improve their safety standards in Iraq and Afghanistan. At least it seems to have gotten their attention.