2 reports

More on the report mentioned in the Washington Post.

"The Defense Department inspector general's report on contracting procedures in Iraq, issued in March, said "supplies and services were acquired quickly and contracting rules were either circumvented or liberally interpreted."

You can read the report, Contracts Awarded for the Coalition Provisional Authority by the Defense Contracting Command-Washington here: Report No. D-2004-057(PDF)

Pentagon oversight needed according to report

Meanwhile, GovExec has an article Democrats call on Pentagon to oversee Iraq reconstruction contracts which calls attention to a second report that highlights conflicts of interest and the waste of tax dollars.

A group of Democrats wants the Pentagon to assume responsibility for oversight of all reconstruction contracts in Iraq in order to prevent conflicts of interest and the waste of tax dollars.

The Coalition Provisional Authority in Iraq has awarded at least two oversight contracts that raise concern about possible conflicts of interest, four Democrats said Tuesday in a new report. Under the contracts, private companies have been given responsibility for managing projects being carried out by other companies with which they have business dealings in other countries.

The report, CONTRACTORS OVERSEEING CONTRACTORS: Conflicts of Interest Undermine Accountability in Iraq (PDF), by Democrats "examined two oversight agreements." From the Executive Summary of the report:

This report examines conflicts of interest in two oversight contracts issued by the Coalition Provisional Authority (CPA) in March 2004. It finds that the oversight contractors have close business relationships with the construction contractors that they have been hired to oversee.

On November 3, 2003, Congress appropriated $18.4 billion for the reconstruction effort in Iraq. In March 2004, CPA awarded ten large monopoly contracts for this reconstruction work. CPA also entered into seven other contracts with private companies to oversee the implementation of the ten reconstruction contracts.

This report examines two of the oversight contracts: (1) a $28.5 million contract awarded to a joint venture of Parsons and CH2M Hill to oversee $1.7 billion in public works and water projects by four other contractors (Fluor, Washington Group International, AMEC, and Black & Veatch); and (2) a $43 million contract awarded to a joint venture of Parsons and a separate company, ParsonsBrinckerhoff, to oversee $1.6 billion in power generation, transmission, and distribution projects by four other contractors (Fluor, Washington Group International, AMEC, and Perini).

The report finds that neither Parsons nor CH2M Hill is an independent watchdog. Each oversight contractor has significant conflicts of interest.

Parsons has close business ties to Fluor, one of the companies it is charged with overseeing under both of the oversight contracts. Parsons and Fluor are partners in a $2.6 billion joint venture to develop oil fields in Kazakhstan. In addition, actions that Parsons takes under the oversight contracts could directly affect its own reconstruction contracts. Parsons is teamed with Bechtel on USAID’s $1.8 billion Iraq Infrastructure II contract, which covers a range of sectors, including electricity and water projects. Parsons also has an $800 million contract for oilrelated work in northern Iraq. The prioritization and oversight of work under the CPA construction contracts could affect the work available for Parsons under the USAID contract, as well as Parson’s work in the northern oilfields.

CH2M Hill has similar conflicts of interest. It has ongoing domestic contractual relationships with three of the firms it is responsible for overseeing: Washington Group International, Fluor, and AMEC. CH2M Hill and Washington Group international are “integrated partners” on a $314 million Department of Energy cleanup project in Miamisburg, Ohio. In addition, AMEC, Fluor, and Washington Group International are all CH2M Hill subcontractors on a large Department of Energy cleanup project in Hanford, Washington.

Rumsfeld proposed shaving down the Department of Defense to eliminate waste of tax dollars in a speech he gave on September 10, 2001, DOD Acquisition and Logistics Excellence Week Kickoff—Bureaucracy to Battlefield.

Looks like the Rumsfeld program didn't work out.