Article:Investigators: Millions in Iraq contracts never
finishe:/n/a/2008/04/27/national/w151423D23.DTL
Article:Investigators: Millions in Iraq contracts never
finishe:/n/a/2008/04/27/national/w151423D23.DTL
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Investigators: Millions in Iraq contracts never finished
By HOPE YEN, Associated Press Writer
Monday, April 28, 2008
(04-28) 01:28 PDT WASHINGTON, (AP) --
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.
___
On the Net:
Special Inspector General for Iraq Reconstruction:
<http://www.sigir.mil/Default.aspx> www.sigir.mil/Default.aspx
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