Moving On

After record-breaking spending, the Iraq Project and Contracting Office closes shop.

For years, Bush administration officials have been saying that Iraqis ultimately will be responsible for rebuilding their country. That message received powerful reinforcement last month when the Pentagon quietly closed down the bureaucracy that managed the bulk of reconstruction projects in Iraq. With budget analysts estimating that American taxpayers have spent more than $30 billion to restore or create infrastructure and public services in Iraq since the U.S. invasion in 2003, the dismantling of the machinery that administered much of that largesse is a concrete sign that the American role in reconstruction is winding down.

"Please be proud," Dean G. Popps, the Army's principal deputy to the assistant secretary who oversaw the Iraq Project and Contracting Office, told several dozen former employees assembled for a closing ceremony May 17 in the Pentagon auditorium. "No other nation of people has been able to accomplish what you've accomplished, regardless of what the naysayers, the media [and other] detractors wish to tell you."

In the hierarchy of federal bureaucracies, contracting shops don't get a lot of respect, and perhaps none less so than the one responsible for delivering services, supplies and infrastructure to beleaguered Iraq. The PCO was established by a presidential directive three years ago to provide the acquisition and management support services necessary to administer the $18.4 billion Iraq Relief and Reconstruction Fund authorized by Congress in November 2003. "Recall that there was no clear postwar reconstruction plan, despite the studies and think tanks and all the scholarly warnings," Popps said. The PCO, or more accurately the handful of individuals charged with creating the PCO, essentially inherited the task of managing reconstruction contracts from the Coalition Provisional Authority after it was disbanded in June 2004, when an Iraqi interim government was created. They had to assemble hundreds of specialists to let and manage contracts, oversee construction and create the administrative processes and computer systems necessary to track projects and spending as required by law.

One of those individuals was James M. Crum, the professional engineer and career senior executive who directed the PCO throughout its duration. Popps describes him as "the glue holding [the reconstruction program] together." Crum, who left for a job in the private sector following the PCO's closure, says the office initially was like a pickup team trying to play catch-up in a game under way. And the rules of that game changed daily as the insurgency gained strength.

Initially criticized for spending money too slowly ("In this town, a lot of measurement is in how much money you spend," Crum told this reporter in late 2005), the PCO made up for lost time in the summer of 2006 when, in one 45-day period, it spent more than $1 billion and ran hundreds of projects. By this spring, the PCO had allocated all the funds for which it was responsible, and the majority of projects were completed.

There's no question that the PCO shouldered an enormous, and largely thankless, burden with too few people to conduct adequate oversight and no time for advance planning. And as the security situation deteriorated in Iraq, so too did the tangible results of the reconstruction as many completed projects were destroyed or neglected, contractors were unable or unwilling to manage their subcontractors and some projects were canceled to pay for increased security costs on others.

Brig. Gen. Michael Walsh, commander of the Army Corps of Engineers Gulf Region, which monitors projects on the ground, told reporters at a Pentagon briefing on May 23 that more than 3,200 construction projects-everything from schools to police stations to fully equipped hospitals-have been completed and turned over to Iraqis. But deciphering what that means is almost impossible.

Stuart Bowen, the special inspector general for Iraq reconstruction, who returned from his 16th trip to Iraq in May, reported that many completed projects were no longer operating as intended, either because Iraqis were not adequately trained to operate and maintain them, or because they had been sabotaged by insurgents.

When asked at a House Foreign Affairs Committee hearing in May whether the reconstruction program in Iraq is failing, Bowen said, "The short answer is 'no.' " But it's the long answer that's so troubling. After four years of substantial investment of blood and treasure, oil and electricity production are well below the goals set by U.S. and Iraqi officials. According to Bowen's latest status report in April, Iraqis in Baghdad before the war received 16 to 24 hours of electricity per day; outside Baghdad, they received four to eight hours per day. The goal was to provide at least 12 hours of power per day to all Iraqis, but in Baghdad, the daily average for the last week in March was six and a half hours (outside Baghdad, it was 14 hours). Oil production also is dismal. Before the war, Iraq was producing about 2.58 million barrels per day; most recent quarterly data shows average daily production at 1.95 million barrels.

"The phase wherein the U.S. bears the burden for financing Iraq's reconstruction has passed," Bowen said. "The Iraqi government now must take responsibility for financing Iraq's national recovery."

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