Stephenson called the number of referrals "unprecedented" for a single military contract or program. But she declined to give details on those reports or name the sources of the alleged improprieties.
The agency has conducted dozens of audits on the KBR contract and has challenged about $4.7 billion in costs charged by the company, she said.
KBR is the primary contractor for the so-called LOGCAP III contract, but the Houston-based company has hired an extensive network of subcontractors to help it provide US forces in Afghanistan, Iraq, and Kuwait with dining facilities, transportation, sanitation systems, warehouses and other critical services.
Armed with Stephenson's 66-page testimony, members of the commission pounded KBR, which was not invited to testify, for overcharging the government, and Army officials, who were invited, for failing to control contract costs.
Jeffrey Parsons, head of the Army Contracting Command, and Lee Thompson from the Army Materiel Command, were on the defensive throughout most of the hearing. They said the demands for KBR's services as the war in Iraq escalated stressed the contract and the accounting systems to manage it beyond planned capacities.
In a statement issued after the hearing began, KBR spokeswoman Heather Browne defended the company's record, saying the scope of the work has "changed significantly from what KBR was first expected to support."
To avoid relying on a single contractor, Parsons and Thompson said the Army rebid the contract two years ago. Now, under what's known as LOGCAP IV, KBR, along with DynCorp and Fluor, compete against one another. Costs should be reduced, they said, and government oversight increased.
But commission members said the Army continues to rely on KBR, defeating the purpose of expanding the number of contractors. They pointed to a letter sent Friday by two senators to Defense Secretary Robert Gates that says the Army hasn't done enough to make the logistics contracts more competitive.
Senators Claire McCaskill, Democrat of Missouri, and Susan Collins, Republican of Maine, also called on the Defense Department to do more to reclaim $100 million worth of overcharges paid to KBR subcontractors.
McCaskill and Collins, are, respectively, the chairwoman and ranking Republican on a contracting oversight subcommittee of the Senate Homeland Security and Governmental Affairs Committee.
