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Contracting problems have hamstrung reconstruction efforts in Iraq, raising questions about how the government can adapt its procurement system to effectively address unforeseen circumstances, according to a panel that examined the role procurement has played in the Iraq reconstruction effort.

T. Christian Miller, author of Blood Money: Wasted Billions, Lost Lives, and Corporate Greed in Iraq, Special Inspector General for Iraq Reconstruction Stuart Bowen and Katherine Schinasi, Government Accountability Office managing director for acquisition and sourcing management, spoke at a Friday event on the reconstruction effort. The panel was organized by the George Washington University Government Procurement Law Program.

Miller said he started his work in Iraq with an expectation for the story he would encounter there: the government procurement system meets the Wild West in Iraq, and the government procurement system wins. But he said he quickly realized that the reconstruction was not working.

The first U.S. government project Miller saw was a water treatment plant that, on the day of his visit, was out of chlorine and short on generator power because the machines had seized up for lack of antifreeze in the cold climate. Worse, when the plant eventually began to pump out clean water, what flowed from the taps of Iraqi homes was tainted with sewage and other contaminants because the old, leaky pipes between the facility and the homes had not been replaced.

Neither the engineers nor the project managers, Miller said, had considered the delivery aspect of the infrastructure project they had signed on to complete.

Miller described contracting staff shortages as central to the problems he encountered. He said David Nash, the first director of the Coalition Provisional Authority's Project Management Office, framed the issue as one of bodies and budgets: the Army Corps of Engineers had about 30,000 employees in the United States with a $13 billion budget for construction projects and contracts like the ones in Iraq, Nash told Miller. In Iraq, the Corps had 50 employees for the $18 billion budget it was allocated in late 2003.

"People were blowing cash around Iraq like they had leaf-blowers," Miller said.

Helping to manage that money and the projects it funded were layers and layers of contractors, Miller said. There sometimes were as many as nine tiers of contractors between the person ordering work done and a worker laying the bricks.

The CPA started out with only three contracting officers, Miller said. While the staff eventually grew, the office remained short-handed, sometimes having just one or two days to analyze and award large, complex contracts.

With government contracting officers working three-month tours of duty, contractors became the experts who had the knowledge needed to manage projects, Miller said, creating a situation vulnerable to manipulation.

"I really can't blame [the contractors] -- it's a business, that's how it's set up. They're supposed to make money. The person that's supposed to be the ... regulation on that is the U.S. government, and it was just never, never there."

GAO's Schinasi and IG Bowen echoed several of Miller's concerns with staffing and oversight levels, though in less certain tones, drawing on a recent GAO forum on procurement and an IG report on Iraq contracting.

Procurement policy tries to strike a balance between the flexibility to allow agencies to respond quickly to circumstances, and the application of complex rules intended to minimize fraud, waste and abuse. But, Schinasi said, "The lesson so far is, what we have isn't good enough."

COMMENTS

• Why is anyone surprised that there are less than honest contractors out there? Ever since the Revolutionary War there have been a few contractors who have provided shoddy work, inflated costs, and substitute parts to the U.S. government. What is surprising, is that our acquisition officials are not properly staffed, and do not have the proper tools to provide oversight of these government contracts. In situations where contractors are left to oversee their own work, there is a temptation to cut corners for profit. And with federal acquisition officials ever more dependent on contractors to oversee their own work – stories like this will be more common in the future. QA Specialist Posted October 17, 2006 9:27 AM
• Where have integrity, honesty, and good work ethics gone? What has happened to people that they cannot do an honest day’s job for their pay without the government looking over their shoulder to ensure they are doing what they are being paid to do? Have Americans become that greedy and without a conscience? If so, this is a horrible state our great country has fallen into. Why have nine layers/tiers of contractors doing the work? It seems the wrong people were hired to complete a contract. There are too many bosses and not enough workers. This is a farce and fraud to the extreme. These contractors and individuals should never be allowed to work on a government contract again and should be required to perform two years of community service to regain their dignity and learn humility. Is this the picture America wants to show the world? Is it any wonder that Americans are hated by so many foreign countries? We are a great country but we should never lose sight of honesty, integrity, humility, and dignity; all of these qualities built our great country. When America loses these we lose God's grace and our strength. America is not strong because of dishonesty and fraud, but unfortunately the image the world sees is prejudiced by these few greedy and dishonest people. GovExec.com reader Posted October 16, 2006 9:11 AM
• There's no reason to be surprised about the following statement, “There sometimes were as many as nine tiers of contractors between the person ordering work done and a worker laying the bricks.” It’s a reflection of our government and how it operates. Like the article said, the contractors are supposed to make money, and in doing so, they’re ripping off the American taxpayer. Patricia Posted October 16, 2006 9:49 AM