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Rebuilding Iraq: Final report card on US efforts highlights massive waste

Here are five of the most wasteful projects uncovered by the Inspector General for Iraq Reconstruction. Its final report paints a 'very grim picture' of America's ability to plan and carry out large-scale nation-building operations.

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The CERP contracts amounted to 780 separate agreements calling for the stationing of 100,000 Sunnis across Iraq, for a total of $370 million in CERP funds. The workers were supposed to take jobs “providing security for buildings, checkpoints and battlefield.”

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Yet the contracting process “was far from transparent,” SIGIR noted. “Program managers could not tell whether SOI members received their US-funded salaries, and Defense was unable to provide any evaluations of the program’s outcomes.”

In short, it concluded, “Financial controls were weak.”

Children's hospital

This was the largest individual health-care construction project, which USAID awarded to the defense contractor Bechtel in 2004 for $50 million. The hospital was supposed to be a state-of-the-art pediatric cancer-treatment facility.

“Work moved slowly,” however, according to the SIGIR report. “Deteriorating security, bad site conditions, and poor contractor performance pushed up costs and pushed out the completion date.”

By 2008 the contract had been terminated. The hospital was completed with new funds in 2010 and opened for “limited treatment,” with standards far below the original state-of-the-art visions for a project that would eventually cost the US government $165 million.

First responder network

In March 2004, the US government decided to help contribute to an “advanced first responder network” in Iraq, and ultimately spent more than $192 million to do it.

A 2006 SIGIR audit found, however, that the project had “failed to produce a reliable” system, largely because the “network’s command and control system did not provide an effective means for dispatching and directing first responders.”

The good news was that a SIGIR audit helped encourage the contractor to remedy many deficiencies of the system, and a 2012 whistle-blower lawsuit meant that the contractor reimbursed the US government $4 million after it was found guilty of submitting false testing certifications designed to mislead the US Army about the effectiveness of the system.

Building Iraqi security forces

In examining contracts awarded to build the Iraqi Army, totaling $628 million, SIGIR found that several of them had been modified 161 times, “which added $420 million to the contracts’ cost,” the report noted.

SIGIR auditors also found that many contractors never provided documentation to support their reported costs, and that when they did, the “financial data on purchases did not reconcile.”

Although some contracts provided logistics support to the Iraqi Army, “the effort fell well short of achieving the goal of training Iraqi Army personnel to maintain their equipment," SIGIR found. Today, it concludes, the culture of “Use it ‘til it breaks’ lives on.”


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