Parsons Corporation in Iraq: Another Chapter in 'An Episodic Story of Waste'

Stuart Bowen, the special inspector general for Iraq reconstruction (SIGIR), told the Associated Press on Monday that his agency's 120 audits on Iraqi reconstruction projects "tell an episodic story of waste."  That day, SIGIR released two reports that assail the work of one contractor in particular, construction and engineering giant Parsons Corporation, the subject of a recent POGO blog post.

One report examines Parsons' work on the unfinished and abandoned prison facility in Kahn Bani Saad, located about 12 miles northeast of Baghdad.  The only "inmates" confined there today are the birds and small animals that have taken up residence in the concrete fortifications, many of which are in danger of imminent collapse.

The U.S. Army Corps of Engineers awarded Parsons the $40 million contract in March 2004.  Granted, the timing could have been better.  The Sunni insurgency was flaring up (although the report alleges that Parsons "understood the security environment" at the time and thereafter submitted "only infrequent reports of security threats"), and the U.S. government, rocked by the recent Abu Ghraib prison abuse scandal, was facing intense international pressure to improve conditions at detention facilities throughout the country.  In June 2006, after major delays and cost overruns, the U.S. government terminated the project for default on the part of Parsons, which was ultimately paid $31 million for its efforts.  The report notes that the U.S. government, in a final careless act of waste, left behind $1.2 million worth of unguarded construction supplies on the site, most of which are now missing.

Aside from a couple usable buildings, Bowen told the AP the prison is a failure.  "It's a bit of a monument in the desert right now because it's not going to be used as a prison," he said.  "Kahn Bani Saad is a microcosm of the shortfalls in the reconstruction program."  Bowen didn't pull any punches in this interview: Of the seven firms SIGIR has reviewed, he said Parsons "is the worst performing contractor that we have identified.”

The Kahn Bani Saad prison project was just a small part of Parsons' $900 million cost-plus award-fee construction contract, which is the subject of the second report SIGIR released on Monday.  According to this report, only one-third of the projects attempted under the contract were completed: "slightly more than $142 million, or almost 43% of the contract's disbursed funds, were spent on projects that were either terminated or canceled."  Again, SIGIR acknowledges the difficult security situation, but concludes that millions of taxpayer dollars were likely wasted.

In the nearly five years of its existence, SIGIR has conducted hundreds of investigations, audits and inspections that have shed light on instances of waste, fraud, abuse and corruption variously affecting the U.S. effort in Iraq.  But SIGIR has also been the subject of much negative attention, including from POGO.  However, even when the behavior of IG Bowen himself has raised concerns, the work of his office and his many hard-working employees continues.  While we are firmly of the belief that Inspectors General should themselves be held to the very highest of standards, we would be remiss in not noting when their office has produced exemplary work such as that involving Parsons.

-- Neil Gordon

(Pictures of the Parsons prison site are posted after the jump):

Comments

[Philadelphia Fraud Lawyer]

I wouldn't live in Iraq if they were offering to make me a millionaire.

[KSBR focus]

Ray Honc,

Have not heard or sensed that people thought the Parsons building site was safe or convenient.
The point for P and other contractors is: don't guess at security, supply chain, labor market, etc. Parsons could have no-bid the work. Were they just going to wing it and expect Uncle Sugar to bail them out?
Parsons evidently made this mistake over and over in Iraq--the police academy, all the health clinics that were botched or never built, etc.
If they lose money or find their reputation damaged, they were the cause, not the government or the Iraqis. If P were publicly owned, top management would have been sacked long ago.

[Ray Honc]

I really haven't heard of many people volunteering to go to work there. The pay is reportedly great. I was in the military in the late 60's, and I would not go overseas to work in Iraq no matter how much I was paid. You can tell from the photos the place is another isolated oasis without the water and palm trees. I guess everyone thinks Home Depot is just around the corner where hundreds of top notch construction workers are waiting for employment. Get real.