Inspector General Report Highlights Challenges in Iraq Reconstruction

On April 28, the Special Inspector General for Iraq Reconstruction (SIGIR) provided an interim report on the progress being made in Iraq reconstruction projects.  The SIGIR report offers important insights into the difficulties that have been experienced in this unprecedented reconstruction and development effort in this unprecedented geographic location.  While poor performance is an issue in a small number of cases, and certainly unacceptable, the report’s most compelling findings revolve around the challenges associated with the security environment, expectations that exceed capabilities, conducting business in a shattered economy which bears little resemblance to a “traditional” market, and more.

The SIGIR’s “preliminary” assessment of the status of Iraq projects was taken only from a database maintained by the Army Corps of Engineers and covering only approximately 70 percent of the funds obligated in Iraq for reconstruction.

With those funds, more than 47,300 projects have been launched as part of the massive reconstruction and development effort, but the SIGIR report notes that only 855 of those projects (about 2 percent) were terminated and only 115 of those projects were terminated because of contractor default, including poor performance. The SIGIR found that security challenges and high costs (driven by requirements or other “unanticipated” factors) were the primary factors behind the termination of more than 80 percent of all the terminated projects. 

The report also demonstrates that the U.S. government has all the tools it needs to take appropriate action against contractors when the circumstances merit, including termination for default.

The full report can be viewed at: http://www.sigir.mil/reports/pdf/audits/08-013.pdf