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Monday, July 28, 2008
Waste in Iraqi Reconstruction Continues...
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| | Kahn Bani Sa'ad Corrections Facility, Iraq |
The Special Inspector General for Iraqi Reconstruction (SIGIR) has released a new audit report today concerning the work (or lack thereof) of Parsons Delaware, Inc., a contractor who was doing design and construction work on Iraqi prisons and civil justice infrastructure. Parsons is a major U.S. contractor, having received over $4.1 billion in contracts since 2000, according to the latest data from FedSpending.org.
The SIGIR report was picked up by the Associated Press, so hopefully the disturbing findings will gain wide attention. Here's the breakdown of what the taxpayer received from the $333 million that Parsons and other subcontractors received through May 21, 2008 on the contract, according to the SIGIR report:
Far less was accomplished under this contract than originally planned; only about one-third of the planned projects were completed. Although the failure to complete some of the work is understandable because of its complex nature and the unstable security environment in Iraq, millions of dollars in waste are likely associated with incomplete, terminated and abandoned projects under this contract. However, precise amounts of funds expended for projects that have not been completed are not easily aggregated because of the uncertain future of incomplete projects. Some measure of the funds expended for which there was not a usable facility is suggested by the fact that slightly more than $142 million, or almost 43% of the contract's disbursed funds, were spent on projects that were either terminated or canceled, although a number of projects were subsequently completed. Contract management weaknesses also played a key role in the contract outcomes.
Parsons isn't the only place to lay blame. The SIGIR report cites that at least four different government authorities had responsibility for oversight of the contract between March, 2004 and May, 2008 and that the extent of SIGIR's findings was severely limited by lack of government documents related to the contract. SIGIR reports that files related to the contract bid and award process, as well as inventory records for items purchased by Parsons to aid in the construction process still have not been found. In fact, SIGIR could not track down anyone who even worked on the contract during the construction period in Iraq.
One particular project funded under this contract was the Kahn Bani Sa'ad Corrections Facility, in Diyala Province (pictured above). The U.S. government canceled Parsons' funding for this project after repeated delays in construction and then attempted to finish the prison by using two separate subcontractors in Iraq. When security became too difficult to complete construction in June, 2007, the government walked away, having spent $40 million on a half finished prison that the Iraqi government has no plans to use. The efficiencies of the free market at work.
SIGIR sums up the problems pretty succinctly - not enough oversight and management of the contractors:
The reconstruction projects under this contract were executed in unstable security conditions and were beset by insufficient contract management and oversight personnel. Because of poor security conditions and limited personnel resources, it was difficult for responsible government officials to visit project sites, plan and define project requirements, and oversee contractor performance once construction began. These conditions created a high-risk contracting environment and approaches that ultimately led to a high level of project failure and waste.
Posted by Adam Hughes
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