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Investigators: Millions in Iraq contracts never finished
By HOPE YEN, Associated Press Writer
Sun Apr 27, 6:42 PM ET
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 U.S.
government as complete, federal investigators say.
The audit released Sunday by Stuart Bowen Jr., the special inspector
general for Iraq reconstruction, provides the latest snapshot of an uneven
reconstruction effort that has cost U.S. taxpayers more than $100 billion.
It also comes as several lawmakers have said they want the Iraqis to pick
up more of the cost of reconstruction.
The special IG's review of 47,321 reconstruction projects worth billions
of dollars found that at least 855 contracts were terminated by U.S.
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 U.S. 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, U.S. officials modified the
contract to change the scope of the work. As a result, a U.S. 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 in describing the practice of "descoping" as frequent.
"Descoping is an appropriate process but does mask problem projects to the
extent they occur," the audit states.
Responding, USAID in the report said it disagreed that 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
responded that the database the IG's office reviewed of Iraq
reconstruction contracts was incomplete.
Bowen's office said its review was preliminary and that it planned
follow-up reviews to investigate descoping more closely. Investigators
said they were also looking into whether contractors whose projects were
terminated by the U.S. government due to inadequate performance might have
been awarded new contracts later despite their poor records.
Investigators said 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 reconstruction 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 in recent months on potential abuse in
contracting government-wide, such as Iraq reconstruction. Last year,
congressional investigators said as much as $10 billion — or one in six
dollars — charged by U.S. contractors for Iraq reconstruction were
questionable or unsupported, and warned that significantly more taxpayer
money was at risk.
In recent weeks, Sen. Ben Nelson, D-Neb., has been working with Sen. Evan
Bayh, D-Ind., and Susan Collins, R-Maine, on legislation that would
restrict future reconstruction dollars to loans instead of grants; require
that Baghdad pay for fuel used by American troops and take over U.S.
payments to predominantly Sunni fighters in the Awakening movement.
Danielle Brian, executive director of the watchdog group Project on
Government Oversight, said the latest audit report points to significant
U.S. taxpayer waste in current reconstruction efforts.
"The report paints a depressing picture of money being poured into failed
Iraq reconstruction projects — contractors are killed, projects are blown
up just before being completed, or the contractor just stops doing the
work," she said.
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Alamaine, IVe
Grand Forks, ND, US of A
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