What Went Wrong in Iraq - The Definitive Account, Part 5

This is part five of a series. Read part one here, part two here, part three here, and part four here.

Stuart Bowen’s IG operation has thus far convicted 35 Americans on charges of fraud.

Yet as appalling as fraud is, it occurs in all wars. What most sapped American resources in Iraq was the waste that occurred as a result of the all-pervading insecurity.

[S]ecurity costs could increase a typical project’s price tag by up to 22 percent. The need to guard Coalition advisors as they worked within Iraqi ministries drove security costs for capacity-building projects higher still, ranging from 24 to 53 percent. Because contracts … assigned responsibility for security to the contractor, expenses for guards and hardening facilities were taken directly from funds that would otherwise have been used for brick-and-mortar work. To make up the difference, mangers had to de-scope projects or provide additional funds.

The insurgency had a powerful second-order effect. By restricting most reconstruction personnel to the Green Zone, the violence disrupted the oversight of relationships necessary to ensure a project’s successful completion. Program managers, contracting officers, contractors, and the engineers who conduct quality assurance normally work together in the field, but insurgent activity made such face-to-face collaboration impossible. Oversight ordinarily done on site was now done via email, sometimes through hired Iraqi surveyors using digital cameras to take picturesÑor not done at all. (233-234)

Heading the list of projects gone bad: the new notorious Khan Bani Sa’ad prison project.

In May 2004, the CPA awarded a task order for $73 million to Parsons to build a maximum-security prison in Diyala Province. The project, scheduled to … be finished by November 2005, had problems from the start. Construction did not begin until November 2004 and progressed very slowly, chiefly because of poor security conditions and weak subcontractor performance.

In the spring of 2006, Parsons notified [US authorities] that the prison would not be completed until September 2008, three years late. The U.S. government promptly terminated the contract for default, noting that “Parsons has endangered completion both by continued schedule slips and by incurring massive cost overruns that cannot be sustained by the Government… The circumstances that have caused the vast majority of the schedule slips have, in fact, been within Parsons’ control.”

Parsons attributed the many delays to poor security, contending that when the contract was awarded the U.S. government indicated that Iraq would be relatively stable. The U.S government disagreed, pointing out that neither the original contract nor the task order suggested that Parsons would be working in a permissive environment.39

The government continued work on the prison, awarding a fixed-price bridging contract to an Iraqi subcontractor of Parsons. … In March 2007, [the government] sent the Iraqi company a list of items it had failed to deliver and, in June 2007 … terminated the contract.

At this point, the U.S. government stopped all work, having spent three years and approximately $40 million on the project, with just 52 percent of it finished. Moreover, the completed work had major structural problems, including improperly laid concrete floors and poorly built walls…

When SIGIR inspectors visited Khan Bani Sa’ad in June 2008, they found an unoccupied, unsecured site with numerous construction problems; $1.2 million worth of material was missing. Ultimately, the U.S. program spent $40 million on the project, terminating it in 2007Ñwithout any prospect of return on the investment. Khan Bani Sa’ad will probably never house an inmate. The Iraqis in Diyala derisively referred to the skeletal, half-built prison on the flatlands north of Baghdad as “the whale.” (208-209)

MORE TO COME