Iraq Water Treatment Contract is "Plagued with Problems" - SIGIR

The Special Inspector General for Iraq Reconstruction (SIGIR)  just issued a site inspection report of a 3 year water treatment system contract in Fallujah and said it is late, costs more and doesn't serve as many people as planned. Kudos to SIGIR for going into a conflict zone like this to get details for the report.  I REALLY recommend you read the first 10 pages of the inspection report at the link at the bottom of this post.

Site inspection reports are different than SIGIR audits.  The SIR's meant SIGIR construction engineers and investigators actually fly to a construction site, take pictures, evaluate quality of construction, and compare actual physical progress to status reports filed with the US Government.  You can see their site inspection reports at their website at www.SIGIR.mil , and they include pictures to get a good feel of what actually was done.   After you look at a few of the inspection reports, you might get even madder at the US State Dept. for not ensuring competent construction using US funds.  However, in the case of Fallujah, I will cut them some slack since it was a heavy conflict area and most sane people (except that Sr. Advisor mentioned below) would send in Iraqi Nationals to "verify" construction progress.  But, since this contract has been ongoing for 3 years, you would think somone from USAID or State would have found out about the lack of progress and halted the work earlier.  It would not surprise me to learn they were given pictures by the Iraqi Nationals that were not actually of the intended work site.

I remember in 2004 & 2005 when the US Advisor for Trade (or Industry) volunteered to manage reconstruction projects in demolished areas like Fallujah (and later Ramadi, etc).  He had to fly into the conflict area right after the US military finished a shock and awe campaign and work with local tribal leaders and residents to rebuild the area.

During this same time, there was lots of pressure on the US to start reducing the use of large US contractors, and contract out to local Iraqi firms.  However, those guys didn't think like US contractors, and half were corrupt and the other half didn't actually know how to meet construction standards.  Thus, conditions were set up in 2004 and 2005 to fail because neither the advisor, or the primary contractors could easily monitor work activities to see what was actually done at the work site in conflict area. 

 

Untreated sewage in streets of Iraq - a common sight - SIGIR picture

Just remember, the US State Dept. took over responsibility for all this reconstruction via IRMO (Iraq Reconstruction Management Office) in mid-2004 and later through their separate group ITAO.  State had no clue how to manage construction projects, and the only progress was due to work by IRMO staff, who WERE subject matter experts.

The article below mentions the contractor Fluor, but not which agency "supervised" Fluor's work.  It might have been IRMO, or USAID, since they had many water projects.  USAID is REALLY good at deniability, so remember they are the ones "managing" most foreign aid projects in other countries, and they are run by ex-Peace Corps workers, not subject matter experts who actually know a technical field like construction.  I once tried to locate Fluor managers to ask about their controls over some construction, and I wanted to "network" with their site controller or auditors.  I tracked down their compound in the Green Zone, and found mostly foreign national field construction managers.  They said all their administration and accounting functions were out of country (Amman, Jordan, I think).   Thus, if all your oversight people are not in Iraq, how can you easily determine if your sub-contractors are doing acceptable work???  However, I had once designed software for Fluor, both in California, and in South Carolina (Greenville), and they are better managed than some other engineering firms, so I am guessing once they discovered the security problems with monitoring projects in conflict areas, they were happy to cancel the contract.

Since Fluor lost the contract after awhile, and the article says the work was given to 45 Iraqi contractors, I am guessing responsibility for field work was transferred to the US Corps of Engineers (USACE) and since they had a HUGE turnover, I could speculate they just didn't know how to control or monitor all the Iraqi national firms.   I haven't read ALL of the 90 page SIGIR inspection report yet, but it might contain details at http://www.sigir.mil/inspections/Default.aspx .

Now, if you aren't YET mad enough at the State Dept. Iraq reconstruction mismanagement, read these quotes from the actual SIGIR report where the Iraqi Ministry changed the project spec to allow homeowners to damage the sewer system, AND the project was planned without ensuring anyone had a budget for the fuel needed to actually run the sewer system pumps.  At some point, maybe we can embarrass State enough to actually hire highly experienced technical experts who can design and monitor these systems.  SIGIR's cover letter does mention State's ITAO and USACE as the ones responsible for the project.  Note:  We should mention that State's Ambassador to Iraq, Ryan Crocker, requested this investigation, and everything we read is that this guy is really professional - the problem is with the other 90% of State managers.  We noticed that Crocker asked SIGIR, rather than the State Dept. IG to do this report.  I REALLY recommend you read the first 10 page summary in the report to understand how mis-managed a reconstruction project can be.  Part of the blame lies with the USACE for letting the Iraqi Water Ministry demand changes, then not commit to the resources needed to maintain or run the more sophisticated system.

Favorite Quotes from SIGIR report (not article)

House connection pipes were to be placed within one meter of the property line, and the Ministry of Municipalities and Public Works would make the connections from each house to the collection system. In a cost-saving measure, the Ministry proposed that each homeowner make the connection to the collection system. The problem with this proposal is that homeowners may simply knock a hole through the manhole walls and damage the collection system. Without house connections to the collection systems, there is no method of transferring wastewater from individual houses to the wastewater treatment system. Because funding is not in place to perform the house connection work, Falluja residents will not benefit from the wastewater treatment system.

Currently, no contract exists to provide the fuel needed to operate the generators at the waste water treatment plant and pump stations. This sustainability issue presents a serious problem for both the U.S. government and the Government of Iraq. Specifically, if the Government of Iraq cannot provide an adequate amount of fuel to continuously operate the waste water treatment plant and pump stations, the Falluja Waste Water Treatment System will not operate, and the substantial investment by the U.S. government will be wasted.

FINALLY, from a separate source, I just received this notice that according to SIGIR, contractors cited for "poor performance" in Iraq were receiving more contracts from the Defense Dept.:

Defense awards more Iraq reconstruction work to contractors cited for poor performance
By Elizabeth Newell

The Defense Department has not taken steps to prevent companies whose Iraq reconstruction contracts were terminated for poor performance from receiving additional government work, the Special Inspector General for Iraq Reconstruction reported on Monday.

In a report on deficient Iraq reconstruction contracts, the SIGIR found that even when contracts were terminated for default due to poor performance, no action was taken to suspend or debar contractors from future contracts.

In several cases, poor performing contractors were awarded additional contracts. In two cases, contractors suspended for fraud and other criminal violations received new construction contracts after being placed on the Excluded Parties List System.

Full story: http://www.govexec.com/story_page.cfm?articleid=41285&dcn=e_gvet

 vj

U.S. Water Project in W. Iraq Plagued by Problems

By Ernesto Londoño
Washington Post Foreign Service
Monday, October 27, 2008; A10

BAGHDAD, Oct. 26 -- A U.S.-funded water-treatment system for the city of Fallujah will be completed at least three years late, cost more than three times as much as originally planned and serve only a fraction of the city, according to a report by the official monitoring Iraq's reconstruction.

The $32.5 million project was launched in July 2004 -- when insurgents largely controlled the city -- and U.S. officials expected it to be completed in January 2006, according to a report set for release Monday. Now, the main contractor assigned to the project has been let go, costs have ballooned to $98 million and the system, which is expected to be operational in April, will serve 38 percent of the city's 400,000 residents, inspector general Stuart W. Bowen Jr. concluded.

The Fallujah water-treatment system is the only U.S.-funded project of its kind. American officials made it a priority because they wanted to show their commitment to rebuilding a predominantly Sunni city that was nearly obliterated in 2004 during some of the war's fiercest urban combat.

The inspector general's office launched a probe in the summer after U.S. Ambassador Ryan C. Crocker expressed concern over the delays and cost overruns.

The multibillion-dollar U.S. effort to rebuild Iraq's ailing infrastructure has been stymied by violence, bureaucratic infighting, poor performance by contractors and disagreements between American and Iraqi officials. Oftentimes, U.S. officials have launched reconstruction projects in areas that remain volatile, said Brian Flynn, assistant inspector general for inspections.

"Of the more than 130 inspections we've done of projects in Iraq, this is the most dangerous we've seen for the people involved," Flynn said in a telephone interview Sunday night. "It boggles the mind as to what they were thinking."

Work started in the summer of 2004, a few months after the first battle of Fallujah. The second offensive, during which U.S. Marines wrested control of the city in late 2004, left Fallujah in a shambles.

South Carolina-based FluorAMEC began work in July 2004. By September 2005, amid concerns over delays and unforeseen costs, the contract was terminated. U.S. officials awarded 45 contracts to Iraqi companies to finish the work. The report does not allege that money was stolen and does not fault FluorAMEC.