Team Infidel
Forum Spin Doctor
Boston Globe
April 28, 2008 Projects funded, not built in Iraq
By Hope Yen, Associated Press
WASHINGTON -- Millions of dollars of lucrative Iraq reconstruction contracts were never finished because of excessive delays, poor performance, or other factors, including failed projects that are being falsely described by the US government as complete, federal investigators said.
An audit released yesterday by Stuart Bowen Jr., the special inspector general for Iraq reconstruction, provides the latest snapshot of an uneven reconstruction effort that has cost US taxpayers more than $100 billion. It also comes as several lawmakers have said they want the Iraqis to assume more of the cost of reconstruction.
The inspector's review of 47,321 reconstruction projects worth billions of dollars found that at least 855 contracts were terminated by US officials before their completion, primarily because of unforeseen factors such as violence and excessive costs.
About 112 of those agreements were ended specifically because of the contractors' actual or anticipated poor performance.
In addition, the audit said, many reconstruction projects were being described as complete or otherwise successful when they were not. In one case, the US Agency for International Development contracted with Bechtel Corp. in 2004 to construct a $50 million children's hospital in Basra, only to "essentially terminate" the project in 2006 because of monthslong delays.
But rather than terminate the project, US officials modified the contract to change the scope of the work. As a result, a US database of Iraq reconstruction contracts shows the project as complete "when in fact the hospital was only 35 percent complete when work was stopped," said investigators, who added that this practice known as "descoping" occurred frequently.
"Descoping is an appropriate process but does mask problem projects to the extent they occur," the audit states.
Responding, USAID in the report said that it disagreed its descoping of the hospital project was "effectively a contract termination" but that it had changed the work because of escalating costs and security problems. Mark Tokola, the director of the Iraq transition assistance office, also said the IG's office reviewed an incomplete database of reconstruction contracts.
Bowen's office said its review was preliminary and it planned additional reviews to more closely investigate descoping. Investigators said they were also examining whether contractors whose projects were terminated by the US government due to inadequate performance might have been awarded new contracts later.
Investigators acknowledged that the database they reviewed lacked full data on projects such as those done by USAID, the State Department, and those completed before 2006. But they said the figures cited in the report offered a baseline in terms of unfinished Iraq contracts.
"Adding contract terminations from these [other] sources would certainly raise the number of terminated projects," the report states.
The audit comes amid renewed focus on potential abuse in contracting government-wide. Last year, congressional investigators said as much as $10 billion - or one in six dollars - charged by US contractors for Iraq reconstruction were questionable or unsupported and warned that significantly more taxpayer money was at risk.
In recent weeks, Senator Ben Nelson, Democrat of Nebraska, has been working with Senator Evan Bayh, Democrat of Indiana, and Susan Collins, Republican of Maine, on legislation that would, among other limits, restrict future reconstruction dollars to loans instead of grants.
April 28, 2008 Projects funded, not built in Iraq
By Hope Yen, Associated Press
WASHINGTON -- Millions of dollars of lucrative Iraq reconstruction contracts were never finished because of excessive delays, poor performance, or other factors, including failed projects that are being falsely described by the US government as complete, federal investigators said.
An audit released yesterday by Stuart Bowen Jr., the special inspector general for Iraq reconstruction, provides the latest snapshot of an uneven reconstruction effort that has cost US taxpayers more than $100 billion. It also comes as several lawmakers have said they want the Iraqis to assume more of the cost of reconstruction.
The inspector's review of 47,321 reconstruction projects worth billions of dollars found that at least 855 contracts were terminated by US officials before their completion, primarily because of unforeseen factors such as violence and excessive costs.
About 112 of those agreements were ended specifically because of the contractors' actual or anticipated poor performance.
In addition, the audit said, many reconstruction projects were being described as complete or otherwise successful when they were not. In one case, the US Agency for International Development contracted with Bechtel Corp. in 2004 to construct a $50 million children's hospital in Basra, only to "essentially terminate" the project in 2006 because of monthslong delays.
But rather than terminate the project, US officials modified the contract to change the scope of the work. As a result, a US database of Iraq reconstruction contracts shows the project as complete "when in fact the hospital was only 35 percent complete when work was stopped," said investigators, who added that this practice known as "descoping" occurred frequently.
"Descoping is an appropriate process but does mask problem projects to the extent they occur," the audit states.
Responding, USAID in the report said that it disagreed its descoping of the hospital project was "effectively a contract termination" but that it had changed the work because of escalating costs and security problems. Mark Tokola, the director of the Iraq transition assistance office, also said the IG's office reviewed an incomplete database of reconstruction contracts.
Bowen's office said its review was preliminary and it planned additional reviews to more closely investigate descoping. Investigators said they were also examining whether contractors whose projects were terminated by the US government due to inadequate performance might have been awarded new contracts later.
Investigators acknowledged that the database they reviewed lacked full data on projects such as those done by USAID, the State Department, and those completed before 2006. But they said the figures cited in the report offered a baseline in terms of unfinished Iraq contracts.
"Adding contract terminations from these [other] sources would certainly raise the number of terminated projects," the report states.
The audit comes amid renewed focus on potential abuse in contracting government-wide. Last year, congressional investigators said as much as $10 billion - or one in six dollars - charged by US contractors for Iraq reconstruction were questionable or unsupported and warned that significantly more taxpayer money was at risk.
In recent weeks, Senator Ben Nelson, Democrat of Nebraska, has been working with Senator Evan Bayh, Democrat of Indiana, and Susan Collins, Republican of Maine, on legislation that would, among other limits, restrict future reconstruction dollars to loans instead of grants.