Report to Congressional Committees

United States Government Accountability Office

GAO

September 2005 REBUILDING IRAQ

U.S. Water and 

Sanitation Efforts 

Need Improved 

Measures for 

Assessing Impact and 

Sustained Resources 

for Maintaining 

Facilities 

GAO-05-872 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-872.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Joseph 

Christoff at (202) 512-8979 or 

christoffj@gao.gov. 

Highlights of GAO-05-872, a report to 

Congressional Committees 

September 2005

REBUILDING IRAQ

U.S. Water and Sanitation Efforts Need 

Improved Measures for Assessing Impact 

and Sustained Resources for Maintaining 

Facilities 

The United States has made some progress in rebuilding Iraq’s water and 

sanitation sector. As of July 2005, State had allocated $2.6 billion; of this 

amount, agencies had obligated $1.8 billion and disbursed an estimated $450 

million, mostly to support large-scale water and wastewater treatment 

projects. In addition, about $384 million in Iraqi and international funds had 

been obligated for the sector—about 21 percent of U.S. obligations. As of 

June 2005, 18 of 54 task orders for projects under five major U.S. contracts 

had been completed. For example, USAID’s contractor repaired six sewage 

treatment plants, two water treatment plants, and an urban water supply in 

southern Iraq. 

State has set broad goals for providing essential services in Iraq, but the lack 

of sound performance data and measures for the water and sanitation sector 

present challenges in determining the impact of U.S. projects. State’s ability 

to measure the provision of essential services, such as access to water and 

sanitation, is limited by a lack of water metering and measures of water 

quality in Iraq. In the absence of such measures, State tracks the number of 

projects started and completed, but State was unable to substantiate which 

projects were included in its reported numbers. Moreover, because these 

data do not measure the availability or quality of water and sanitation 

services, it is difficult to determine how U.S. efforts are contributing to the 

goal of improving access to essential services. However, USAID-funded 

surveys report that Iraqis experience low levels of access and satisfaction 

with water and sanitation services. These surveys demonstrate the potential 

for gathering data over time that could be used to gauge the progress of U.S. 

reconstruction efforts. 

Poor security and management challenges have adversely affected the U.S. 

water and sanitation reconstruction program, leading to project delays and 

increased costs. One U.S. agency estimated that the security environment 

has added an average of about 7 percent to its water sector project costs. 

Initial cost estimates of 25 to 50 percent below actual costs and delays in 

funding and awarding task orders also led to a reduced program scope and 

delays in starting projects. Other factors that impede progress and increase 

cost include lack of agreement on project scope, staffing turnover, inflation, 

unanticipated site conditions, and uncertain ownership of project sites. 

As of June 2005, projects costing about $52 million and turned over to Iraqi 

management were not operating as intended due to looting, unreliable 

electricity, or inadequate Iraqi staff and supplies. In March 2005, State 

reallocated $25 million for additional support at USAID’s completed 

projects, and agencies have begun risk forecasting and planning to address 

sustainability issues. However, these efforts are in their early stages, and it is 

unclear if they will address the long-term ability of the Iraqi government to 

support, staff, and equip remaining large-scale water and sanitation projects 

for which the United States has obligated more than a billion dollars. 

After security conditions in Iraq 

began to deteriorate in June 2003, 

the U.S.-led Coalition Provisional 

Authority (CPA) included restoring 

essential services in Iraq, such as 

water and sanitation, as part of its 

strategy for establishing a secure, 

peaceful, and democratic Iraq. 

From 1991 to 2003, a decreasing 

number of Iraqis had access to safe 

drinking water and sanitation 

services, and water-borne disease 

rates rose. The United States has 

made available $2.6 billion for 

rebuilding the water and sanitation 

sector. 

As part of GAO’s review of Iraq 

reconstruction under the 

Comptroller General’s authority, 

we assessed U.S. activities in the 

water and sanitation sector, 

including (1) the funding and status 

of U.S. activities, (2) U.S. efforts to 

measure progress, (3) the factors 

affecting the implementation of 

reconstruction activities, and (4) 

the sustainability of U.S.-funded 

projects. 

What GAO Recommends

We recommend that the Secretary 

of State (1) establish and monitor 

improved indicators and measures 

that assess how U.S. efforts are 

improving water and sanitation 

services in Iraq and (2) work with 

Iraqi ministries to assess and 

obtain the resources needed to 

operate and maintain facilities. 

State agreed with our findings and 

recommendations and stated that it 

has begun taking steps to 

implement them. 
Page i GAO-05-872 Iraq Water and Sanitation 

Letter 1

Results in Brief 2 

Background 4 

The United States Has Completed Some Projects, but Many Large 

Scale Efforts Were Delayed 7 

Limited Performance Data and Measurements Make It Difficult to 

Determine Impact 13 

Security and Management Challenges Have Adversely Affected 

Implementation of Water and Sanitation Projects 19 

Iraq’s Lack of Capacity to Operate and Maintain U.S.-Funded 

Projects Led to Inoperable Facilities and Greater U.S. Focus on 

Improving Project Sustainability 25 

Conclusion 29 

Recommendations for Executive Action 29 

Agency Comments 30 

Appendix I Objectives, Scope & Methodology 35 

Appendix II Comments from the Department of State 38 

Appendix III Comments from the U.S. Agency for International 

Development 41 

Appendix IV GAO Contact and Staff Acknowledgments 42 

Table 

Table 1. Status of Major Contractors’ Water and Sanitation Task 

Orders, June 2005 11 

Figures 

Figure 1. Available Fiscal Year 2004 IRRF Funds Allocated for 

Water and Sanitation 9 

Contents 
Page ii GAO-05-872 Iraq Water and Sanitation 

Figure 2. Iraqi Satisfaction with Water Supply by Governorate, 

February 2005 17 

Figure 3. Iraqi Satisfaction with Adequacy of Sewerage and 

Wastewater Disposal by Governorate, February 2005 18 

Abbreviations 

AIRP Accelerated Iraq Reconstruction Program 

CERP Commanders’ Emergency Response Program 

CH2M Hill/PWI CH2M Hill and Parsons Water Infrastructure 

CHRRP Commanders’ Humanitarian Relief and 

 Reconstruction Program 

CPA Coalition Provisional Authority 

DFI Development Fund for Iraq 

DOD Department of Defense 

FluorAMEC Fluor (U.S. company) and AMEC (British company) 

IRMO Iraq Reconstruction and Management Office 

IRRF Iraq Relief and Reconstruction Fund 

IRFFI International Reconstruction Fund Facility for Iraq 

PCO Project and Contracting Office 

PMO Project Management Office 

UN United Nations 

USAID U.S. Agency for International Development 

WGI/B&V Washington Group International/Black & Veatch 

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Page 1 GAO-05-872 Iraq Water and Sanitation 

September 7, 2005 

Congressional Committees: 

After security conditions in Iraq began to deteriorate in June 2003, the 

U.S.-led Coalition Provisional Authority (CPA) included restoring essential 

services, such as water and sanitation, as part of their strategy for 

establishing a secure, peaceful, and democratic Iraq. According to a 2003 

UN/World Bank assessment,1

 years of conflict, international sanctions, and 

mismanagement by the prior regime led to deterioration in the 

infrastructure providing essential services. From 1991 to 2003, a 

decreasing number of Iraqis had access to safe drinking water and 

sanitation, and water-borne disease rates rose. As of July 2005, the United 

States had appropriated about $24 billion for relief and reconstruction in 

Iraq, including nearly $2.6 billion for rebuilding the water and sanitation 

sector. 

As part of GAO’s review of reconstruction efforts in Iraq initiated under 

the Comptroller General’s authority, we examined U.S. activities directed 

at rebuilding the water and sanitation sector. Specifically, we assessed (1) 

the funding and status of U.S. activities, (2) U.S. efforts to measure 

progress, (3) the factors affecting the implementation of reconstruction 

activities, and (4) the sustainability of U.S.-funded projects. 

To accomplish our objectives, we reviewed and analyzed U.S. government 

agency documents and contractor reports. We also met with officials from 

the Department of State, the U.S. Agency for International Development 

(USAID), the Department of Defense (DOD) Project and Contracting 

Office (PCO), and contractors undertaking reconstruction efforts. 

Although we did not travel to Iraq due to security concerns, we 

interviewed U.S. officials based in Iraq by telephone and exchanged 

information through e-mail. We also met with officials from contractors 

and U.S. agencies in the United States who had returned after tours of duty 

in Iraq. In addition, we reviewed U.S. government-funded surveys that 

document Iraqi perceptions of the quality and quantity of water and 

 1

United Nations Development Group and World Bank Group, United Nations/World Bank 

Joint Iraq Needs Assessment (October 2003). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-872 Iraq Water and Sanitation 

sanitation services. Appendix I contains a more detailed description of our 

scope and methodology. 

We conducted our review from September 2004 through August 2005 in 

accordance with generally accepted government auditing standards. 

The United States has allocated resources and made some progress in 

undertaking and completing activities to rebuild Iraq’s water and 

sanitation infrastructure. U.S. appropriations for this sector were as high 

as $4.6 billion in 2004, but this level was subsequently reduced to $2.6 

billion to address other priorities, such as improving security and 

increasing employment. Of this amount, U.S. agencies had obligated $1.8 

billion and disbursed an estimated $450 million as of June 2005. U.S. 

funding was not sufficient—nor was it intended—to address all of Iraq’s 

water and sanitation needs as identified in 2003 condition assessments. As 

of June 2005, about $251 million in Iraqi funds and $133 million in 

international funds had been obligated for the sector—about 21 percent of 

U.S. obligations. USAID had awarded 30 task orders for project activities 

and PCO had awarded 24 task orders.2

 USAID’s contractor had completed 

18 task orders, including the repair of six sewage treatment plants, two 

water treatment plants, and a primary urban water supply in southern Iraq. 

However, 12 of the completed task orders had been delayed by 6 months 

or more. PCO’s contractors had not completed any task orders, but they 

plan to complete 9 task orders by the end of 2005 and the remaining 15 by 

2008. PCO task orders include the repair of municipal water supplies, 

sewage collection systems, dams, and a major irrigation project. 

It is difficult to determine the overall progress and impact of U.S. efforts 

because of inadequate performance data and measures. According to State 

officials, the CPA’s April 2004 goal to increase potable water to 90 percent 

of the population was unrealistic because it was set without baseline data. 

A senior State official expects U.S. efforts to increase water service access 

to about 50 or 60 percent. U.S. agencies track progress through the 

numbers of projects under way and completed and expected gains in 

water and sewage treatment capacity. However, these measurements are 

limited in providing a complete picture of progress and the impact of U.S. 

projects in improving access to water and sanitation services. For 

 2

Task orders are placed against established contracts for the performance of tasks during 

the period of the contracts. 

Results in Brief 
Page 3 GAO-05-872 Iraq Water and Sanitation 

example, although State reported that 143 projects3 were complete as of 

early July 2005, it could not document the location, scope, and cost of 

these projects. Moreover, reporting only the number of projects completed 

or under way provides little information on how U.S. efforts are improving 

the amount and quality of water reaching Iraqi households or their access 

to sanitation services. The availability of data is limited by the lack of 

water metering and water quality measurements. For example, due to 

problems in the distribution network, water that is potable at the 

treatment plant may be lost through leakage or contaminated by the time it 

reaches users. However, a recent USAID survey found that just under half 

of respondents rated their water supply as good to very good and fewer 

than 20 percent rated their sewerage and wastewater disposal as good to 

very good. These surveys demonstrate the potential for gathering data to 

gauge the progress of U.S. reconstruction efforts. 

Poor security and a variety of management challenges have affected U.S. 

efforts to improve the water and sanitation sector in Iraq. Security 

conditions have led to project delays and increased costs for security 

services. For example, work was suspended at a sewer repair project in 

central Iraq for 4 months in 2004 due to security concerns. PCO has 

estimated that the deteriorated security environment has increased water 

and sanitation project costs by 7 percent. In addition, PCO found initial 

CPA cost estimates to be 25 to 50 percent below actual costs, contributing 

to a reduced scope for the water and sanitation program. Agency and 

contractor officials cited other factors that impeded progress and 

increased program cost, including a lack of agreement among U.S. 

agencies, contractors, and Iraqi authorities on project issues; staffing 

turnover; an inflationary environment that made it difficult for contractors 

to submit accurate cost estimates; unanticipated project site conditions; 

and uncertain ownership of project sites. 

As of June 2005, U.S.-funded water and sanitation projects representing 

about $52 million of the $200 million in completed projects were either not 

operating or were operating at lower capacity. One repaired wastewater 

plant was partially shut down due to the looting of key electrical 

equipment. In addition, two projects lacked a reliable power supply, one 

lacked sufficient staff to operate properly, and one lacked both adequate 

power supply and staff. Repaired water plants in one southern governorate 

 3

We could not determine which of these projects were included in the task orders reported 

by contractors. 
Page 4 GAO-05-872 Iraq Water and Sanitation 

lacked adequate electricity and necessary water treatment chemicals. In 

late August 2004, USAID’s contractor began to identify potential 

sustainability problems, such as poor operations and maintenance 

procedures. In late March 2005, nearly 7 months after the initial report of 

these concerns, State reallocated $25 million to USAID for up to 1 year of 

additional on-site operating assistance and supplies at USAID’s completed 

projects. In proposing the reallocation, the U.S. embassy in Iraq stated that 

it was moving from the previous model of building and turning over 

projects to Iraqi management toward a “build-train-turnover” system to 

protect the U.S. investment in Iraq’s infrastructure. In March 2005, PCO 

provided $10.3 million for a 12-month capacity development initiative that 

includes baseline service assessments, operations and maintenance 

planning and other efforts in eight governorates. However, U.S. assistance 

efforts do not address the long-term ability of the Iraqi government to 

support, staff, and equip these facilities. Iraqi ministry capacity remains an 

obstacle to the success of more than $1 billion in U.S. projects expected to 

be complete between mid-2005 and 2008. 

This report recommends that the Secretary of State should, within the 

limitations and difficulties of working in an unstable security environment, 

establish and implement improved indicators and measures that assess 

how U.S. efforts are improving the quality and quantity of water and 

sanitation services in Iraq. The report also recommends that the Secretary 

work with Iraqi ministries to assess the resources needed to operate and 

maintain new and repaired water and sanitation facilities after they are 

turned over to Iraqi management and work with the Iraqi government to 

ensure that Iraq has these resources. 

In commenting on a draft of this report, the Department of State and 

USAID agreed with our findings and conclusions. State concurred with our 

recommendations and stated that it is taking steps to begin implementing 

them. The Departments of Defense and State also provided technical 

comments, which we incorporated where appropriate. 

Water and sanitation services in Iraq deteriorated after the 1991 Gulf War 

due to lack of maintenance, inadequate skilled manpower, international 

sanctions, and war damage. In 2003, looting at the outbreak of Operation 

Iraqi Freedom destroyed the equipment and materials needed to operate 

Background 
Page 5 GAO-05-872 Iraq Water and Sanitation 

water treatment and sewerage facilities.4 According to the 2003 UN/World 

Bank Joint Iraq Needs Assessment, Iraq produced enough water before 

the 1991 Gulf War to supply more than 95 percent of urban Iraqis and 75 

percent of rural Iraqis. By 2003, these production levels had fallen to about 

60 percent and 50 percent, respectively. At both times, however, the 

percentage of Iraqis actually receiving an adequate amount of potable 

water was much lower due to heavy leakage and contamination from the 

delivery network. The assessment also found that, although 80 percent of 

Baghdad’s population had sewerage access, power outages caused 

shutdowns and blockages of the sewage system, leading to backups of raw 

sewage in the streets. Less than 10 percent of the urban population outside 

Baghdad was served by sewage systems, and rural areas and northern Iraq 

had no access to piped sewerage. Diseases related to unsafe water and 

poor sanitation increased significantly between 1990 and 2000. At the time 

of the 2003 assessment, no sewage treatment plants were operational, and 

raw sewage was discharged into rivers and waterways. Furthermore, 

sewage leaked into the water network, which was too damaged to keep 

contaminants out. These sources of contamination caused levels of waterrelated diseases to escalate. According to a UN Children’s Fund report, the 

number of typhoid cases rose from 2,240 in the pre-1991 period to 27,000 

in 1996.5

According to the official who led the 2003 UN/World Bank assessment, 

steady attrition of human and physical capital was the principal cause of 

the decline in Iraq’s water and sanitation services. Through most of the 

1990s, Iraq’s water and sanitation sector lacked the funding, staff, 

equipment, and spare parts needed to keep facilities running. The sector 

did not have a steady source of operating funds, and salaries were too low 

to retain trained and educated staff, many of whom left the country. 

International isolation prevented exposure to outside knowledge and the 

development of necessary skills and led to spare parts shortages that made 

routine maintenance difficult. 

 4

United Nations Development Group and World Bank Group, United Nations/World Bank 

Joint Iraq Needs Assessment (October 2003). Operation Iraqi Freedom largely spared 

water and wastewater treatment plants; however, water networks were seriously damaged. 

Baghdad’s water network in particular was subject to severe bomb damage, causing acute 

water shortages that led residents to tap the network illegally. 

5

UN Children’s Fund, The Situation of Children in Iraq: An Assessment Based on the 

United Nations Convention on the Rights of the Child (New York: Reprinted March 2003). 
Page 6 GAO-05-872 Iraq Water and Sanitation 

Two 2003 studies, based on limited assessments extrapolated to cover the 

entire country, provided cost estimates for repairing Iraq’s deteriorated 

water and sanitation infrastructure. The UN/World Bank assessment 

estimated that more than $4 billion would be needed through 2007 to 

restore and expand the water and sanitation infrastructure past pre-1991 

levels. Additional capital investments of nearly $2.8 billion would be 

required to increase service coverage and reduce water losses. A USAIDfunded assessment by Bechtel National, Inc., identified short-, 

intermediate-, and long-term projects that could address Iraq’s water and 

sanitation needs at a potential cost of $6.5 billion over the next 10 to 20 

years. 

From May 2003 until the end of June 2004, the CPA was the UN-recognized 

coalition authority led by the United States and United Kingdom that was 

responsible for the temporary governance of Iraq and for overseeing, 

directing, and coordinating the reconstruction effort. Within the CPA, the 

Project Management Office (PMO) was established to provide project 

management, prioritizing, and contract support for U.S.-funded 

reconstruction projects. The CPA identified the initial U.S. efforts for 

rebuilding Iraq’s water and sanitation, which USAID managed and 

executed with fiscal year 2003 funds. In May 2004, the President issued a 

National Security Presidential Directive which stated that after the 

transition of power to the Iraqi government, the State Department would 

be responsible for all U.S. activities in Iraq, except for U.S. efforts relating 

to security and military operations. These efforts would be DOD’s 

responsibility. On June 28, 2004, the CPA transferred power to a sovereign 

Iraqi interim government, and the CPA was officially dissolved. 

To replace the CPA’s PMO, the Presidential Directive established two 

temporary offices: (1) the Iraq Reconstruction and Management Office 

(IRMO) to facilitate the transition of reconstruction projects to Iraq and 

(2) PCO to facilitate acquisition and project management support for U.S.-

funded reconstruction projects in various sectors, including water and 

sanitation. IRMO is a State Department organization responsible for 

strategic planning and for prioritizing requirements, monitoring spending, 

and coordinating with the military commander. Iraq-based personnel from 

both offices are under the authority of the U.S. chief of mission in 

Baghdad, although the U.S. Department of the Army funds, staffs, and 

oversees the operations of the PCO. 

USAID and PCO administer the large-scale projects funded in fiscal year 

2004. USAID and PMO awarded five contracts representing the majority of 

U.S. funds obligated for water and sanitation reconstruction to three firms. 
Page 7 GAO-05-872 Iraq Water and Sanitation 

USAID awarded the first of these contracts to Bechtel National, Inc. in 

April 2003 with fiscal year 2003 funds for work across multiple 

reconstruction sectors. In January 2004, USAID awarded a second, 

competitively bid, multi-sector reconstruction contract to Bechtel with 

fiscal year 2004 funds. In March 2004, PMO used fiscal year 2004 

appropriated funds to competitively award three contracts for water and 

sanitation reconstruction. PMO awarded one contract for improving water 

resources nationwide to a joint venture between the U.S. companies 

Washington Group International and Black & Veatch (WGI/B&V). PMO 

awarded two other contracts to a joint venture between the U.S. firm 

Fluor and the British company AMEC (FluorAMEC), one each for public 

works projects in northern and southern Iraq. PMO also awarded a 

contract in March 2004 to a joint venture between CH2M Hill and Parsons 

Water Infrastructure (CH2M Hill/PWI) for program management services 

for water sector activities. For PCO activities, CH2M Hill/PWI performs 

such duties as developing project task orders, preparing government cost 

estimates, and preparing reports on water sector status. 

As of July 2005, State Department reallocations to other priorities in Iraq 

had reduced funding designated for water and sanitation by almost half, to 

about $2.6 billion, of which U.S. agencies had obligated about $1.8 billion 

and disbursed an estimated $450 million. International and Iraqi funds 

allocated for this sector totaled at least $384 million. Most U.S. obligations 

have gone to long-term, large-scale water and wastewater treatment 

projects that can take months or years to complete. As of June 2005, 

USAID’s contractor had completed 18 task orders, although with many 

delays. USAID and PCO expect to complete an additional 36 task orders 

from 2005 through 2008. 

At its highest level, total U.S. appropriated funding for reconstruction of 

Iraq’s water and sanitation sector was about $4.6 billion; however, by July 

2005, State Department reallocations had reduced funding to about $2.6 

billion, a 44 percent decrease. As of the end of June 2005, agencies had 

obligated $1.8 billion and disbursed an estimated $450 million.6

 Even at the 

level of $4.6 billion, U.S. funding would not have been sufficient—nor was 

 6

The disbursement figure for water and sanitation activities is estimated due to limitations 

in agency reporting. For example, water and other reconstruction activities under USAID’s 

Local Governance Program are reported in the democracy category, and DOD’s reporting 

on some smaller programs stops at the obligation level. 

The United States Has 

Completed Some 

Projects, but Many 

Large Scale Efforts 

Were Delayed 

State Reallocated a Portion 

of Its Water and Sanitation 

Funds to Address Other 

Iraq Needs 
Page 8 GAO-05-872 Iraq Water and Sanitation 

it intended—to address all of Iraq’s water and sanitation needs as 

identified by the UN/World Bank and Bechtel assessments. After State’s 

reallocations, U.S. obligations are almost five times greater than Iraqi and 

international obligations for rebuilding Iraq’s water and sanitation sector. 

Congress initially appropriated funding for Iraq reconstruction in fiscal 

year 2003, and in fiscal year 2004, appropriated an additional, larger 

amount. In April 2003, Congress passed the Emergency Wartime 

Supplemental Appropriations Act.7

 This legislation created the Iraq Relief 

and Reconstruction Fund (IRRF) and appropriated about $2.48 billion in 

fiscal year 2003 funds to the Fund for reconstruction activities in multiple 

sectors. Of this amount, as of June 2005, USAID had obligated 

approximately $270 million to water and sanitation projects. In November 

2003, Congress enacted an additional emergency wartime supplemental 

act, in which $18.4 billion was provided for the IRRF.8

 From this $18.4 

billion, Congress specifically allocated about $4.33 billion for 

reconstruction of Iraq’s water and sanitation sector. However, the Act also 

permitted limited reallocation of fiscal year 2004 IRRF funds with 

congressional notification. This $270 million in fiscal year 2003 funds and 

$4.33 billion in fiscal year 2004 funds total the peak U.S. appropriation for 

the water and sanitation sector of $4.6 billion. 

As of July 5, 2005, the State Department had conducted a series of fiscal 

year 2004 IRRF reallocations to address other priorities, thereby reducing 

total IRRF funding for water and sanitation by about 44 percent, from $4.6 

billion to $2.6 billion. The single largest reduction occurred in September 

2004, when State shifted $1.9 billion in fiscal year 2004 IRRF funds from 

water and sanitation to increase support for security and law enforcement, 

oil infrastructure enhancements, economic development, debt forgiveness, 

Iraqi employment, and democracy and governance. Although State’s 

September 2004 reallocation did not cause cancellation of any water 

sector projects already in progress, PCO cancelled some projects—most of 

which were planned to start in mid-2005. Over the next 9 months, State 

made additional reallocations, transferring a total of $160 million in fiscal 

year 2004 IRRF water and sanitation funds to support efforts such as job 

creation and electrical distribution. Figure 1 shows the overall reduction in 

 7

Congress enacted Public Law 108-11, the Emergency Wartime Supplemental 

Appropriations Act, 2003 on April 16, 2003. 

8

Congress enacted Public Law 108-106, the Emergency Supplemental Appropriations Act 

for Defense and for the Reconstruction of Iraq and Afghanistan, 2004, on November 6, 2003. 
Page 9 GAO-05-872 Iraq Water and Sanitation 

available fiscal year 2004 IRRF funds allocated for water and sanitation. As 

of June 2005, U.S. agencies had obligated $1.8 billion of the reduced total 

of $2.6 billion. Of the allocated amount, about $450 million—17 percent—

had been disbursed. 

Figure 1. Available Fiscal Year 2004 IRRF Funds Allocated for Water and Sanitation 

According to a senior PCO official, U.S. funding was not meant to rebuild 

Iraq’s entire infrastructure but to lay the groundwork for a longer-term 

reconstruction effort with anticipated significant assistance from 

international donors. As of the end of June 2005, at least $384 million in 

Iraqi and international funds had been obligated for rebuilding Iraq’s water 

and sanitation sector, slightly more than 21 percent of the $1.8 billion in 

U.S. obligations. Iraqi funding includes at least $239 million from the 

Development Fund for Iraq (DFI) and about $12 million in seized assets 

from the former regime.9

 In addition, the International Reconstruction 

 9

According to UN Security Council Resolution 1483, the funds deposited into the DFI were 

to be used to meet the costs of Iraqi civilian administration, humanitarian needs, 

infrastructure repairs, economic reconstruction, and other purposes benefiting the people 

of Iraq. The CPA used the term “allocation” to reflect DFI obligations. We used the term 

“obligations” for consistency of reporting. The 2005 budgets for the Iraqi Ministries of 

Municipalities and Public Works, and of Water Resources also included funding for capital 

project costs; however, we were unable to determine the extent to which these funds have 

been made available. 
Page 10 GAO-05-872 Iraq Water and Sanitation 

Fund Facility for Iraq obligated about $133 million in international 

donations for water and sanitation projects as of May 2005. 10

Water and sanitation construction projects funded by U.S. agencies in Iraq 

generally fall into two categories: large-scale projects and smaller-scale, 

quick-impact projects.11 As of June 2005, five contracts issued by USAID 

and PCO, representing about 73 percent of all U.S. water and sanitation 

obligations, supported a variety of large-scale efforts that mostly remain in 

progress. By the end of June, USAID and PCO contractors had completed 

18 of their 54 task orders for large-scale projects; however, these 

completed projects experienced delays. Smaller-scale, quick-impact efforts 

are typically less complex, less costly, and have received a smaller share of 

available U.S. funds. These projects are designed to address local needs 

and create employment. Iraqi funds have also been used for other water 

and sanitation projects. 

As of June 2005, U.S. agencies had obligated about $1.3 billion of the total 

$1.8 billion in available U.S. appropriated funding for large-scale water and 

sanitation projects performed by USAID contractor Bechtel and PCO 

contractors WGI/B&V and FluorAMEC. Some task orders have been 

completed, but most work is still in progress. Table 1 shows the status of 

these contracts as of June 2005. 

 10The International Reconstruction Fund Facility for Iraq comprises two trust funds into 

which donors can make contributions—the World Bank Iraq Trust Fund and the UN 

Development Group Iraq Trust Fund. Members of the international community have also 

made bilateral donations for rebuilding Iraq. As we reported in June 2004, the United States 

had been working with the Iraqis to develop a database for tracking all bilateral 

commitments made to reconstruction activities in Iraq. One year later, this database for 

tracking all donor assistance projects in Iraq remains under development with U.S. and UN 

assistance and has been transferred to the Iraqis. 

11According to PCO reporting, in addition to obligating funds to water and sanitation 

construction projects, PCO has obligated about $127 million to nonconstruction activities 

in the sector as of June 26, 2005. These activities include procurement of trash trailers, 

sewage trucks, and generators. 

Funding Has Been 

Directed Primarily to 

Large-Scale Efforts that 

Are in Progress 

Some Large-Scale Water and 

Sanitation Projects Have Been 

Completed but Delayed; Others 

Are Under Way 
Page 11 GAO-05-872 Iraq Water and Sanitation 

Table 1. Status of Major Contractors’ Water and Sanitation Task Orders, June 2005 

Contract 

Date of 

Contract 

Total 

Task 

Ordersa

Task Orders 

in Progressa

Completed 

Task Orders

Obligations for 

Task Orders in 

Progress 

Obligations for 

Completed Task 

Orders 

USAID 

Bechtel Phase I 4/17/03 17 0 17 $0 $199 million

Bechtel Phase II 1/05/04 13 12 1 $365 million $0.7 million

PCO 

WGI/B&V 3/11/04 10 10 0 $234 millionb $0

FluorAMEC – North and 

South Contracts 3/23/04 14 14 0 $639 millionc

 $0

Totals 54 36 18 $1.2 billion $200 million

Sources: USAID, PCO, and contractor reporting. 

a

Excludes 2 cancelled USAID Phase I task orders, 3 USAID Phase I task orders that were combined 

with other task orders in Phase I or Phase II, 2 cancelled PCO task orders and 3 PCO mobilization 

task orders. 

b

Includes task orders awarded with both U.S. appropriations ($169 million) and DFI funds ($65 

million). 

c

Includes task orders awarded with both U.S. appropriations ($566 million) and DFI funds ($73 

million). 

Note: Numbers may not add due to rounding. Status information is as of the end of June 2005; 

funding information is as of the end of March 2005 for USAID and end of June for PCO. 

As of June 2005, Bechtel had completed 18 of its total 30 task orders, but 

most of these completed task orders experienced delays. Large-scale 

efforts completed by Bechtel included the repair of six sewage treatment 

plants, two water treatment plants, and the primary water supply for a city 

in southern Iraq. Bechtel has completed one task order under its Phase II 

contract, a design task costing about $700,000. Twelve task orders remain 

under the second Bechtel contract, including water treatment plants, 

sewer line construction, and a rural water supply project. Six of these task 

orders are expected to be completed in 2005 and six in 2006. Although 

USAID/Bechtel has completed 18 task orders, all 17 completed Phase I 

task orders were delayed beyond the original completion date by between 

1 and 13 months. Twelve were delayed by 6 months or more. 

PCO contractors WGI/B&V and FluorAMEC were awarded contracts 

nearly 1 year after the initial Bechtel contract, and they had not completed 

any of their 24 task orders as of June 2005. The contractors expect to 

complete 9 task orders by the end of 2005, 10 in 2006, 4 in 2007, and 1 in 

2008. WGI/B&V’s task orders include four dam facilities and a major 

irrigation project; FluorAMEC’s include several municipal water supplies 
Page 12 GAO-05-872 Iraq Water and Sanitation 

and three sewage collection systems. PCO contractors have also faced 

some delays in completing work under the task orders. 

U.S. agencies have also undertaken small-scale, quick-impact water and 

sanitation projects. DOD, State, and PCO have conducted this work under 

the following three programs: 

• Under the Commanders’ Emergency Response Program (CERP), military 

commanders have undertaken urgent humanitarian relief and 

reconstruction projects in Iraqi communities in their areas of 

responsibility. Agency data as of June 30, 2005 indicated that about $56.1 

million in Iraqi and fiscal year 2004 U.S. funds had been obligated to more 

than 2,800 CERP water and sanitation projects. CERP projects have 

helped to repair and augment water and sanitation systems and include 

canal cleanups, well construction, and water purification. 

• State established the Commanders’ Humanitarian Relief and 

Reconstruction Program (CHRRP) in September 2004 with $86 million in 

response to the perceived effectiveness of the CERP, according to a senior 

State official. A major CHRRP initiative was to connect large water and 

sewer infrastructure projects to homes in central Iraq. Agency data as of 

June 30, 2005 indicated that about $74.3 million in fiscal year 2004 U.S. 

funds had been obligated for 60 CHRRP water and sanitation projects in 

central Iraq. Other planned projects include rehabilitation of irrigation 

canals and procurement of landfill equipment. 

• PCO has provided funds for contracting directly with Iraqi construction 

firms to conduct small water system repairs. According to PCO reporting 

from April 2005, PCO has budgeted about $70 million for this effort and 

plans to undertake 145 projects. 

USAID also has funded small-scale, quick-impact water and sanitation 

projects. According to our analysis of USAID and contractor data, more 

than 1,900 projects with an average value of about $100,000 had been 

funded as of May 2005. These projects include neighborhood trash 

cleanups, provision of irrigation pumps, sewer cleanouts, and installation 

of potable water networks. USAID has implemented this work through 

contracting partners and nongovernmental organizations. The goals of 

USAID’s quick-impact projects include employing Iraqis and satisfying 

local needs as identified by community members. 

U.S. Funds Small-Scale, QuickImpact Projects 
Page 13 GAO-05-872 Iraq Water and Sanitation 

In April 2004, the CPA created the Accelerated Iraq Reconstruction 

Program (AIRP), which, as of mid-June 2005, included 125 quick-impact 

and large-scale projects funded with a total of $211 million in Iraqi DFI 

funds. The AIRP is a “legacy” program of DFI-funded projects that CPA 

had awarded but not completed before its dissolution in June 2004. PCO 

administers the AIRP on behalf of the State Department. Although AIRP 

includes nearly 25 times as many quick-impact water sector projects as it 

does large-scale water sector projects, the larger projects have received 

nearly twice as much funding.12 As of June 2005, Iraqi contractors had 

received about $73 million in DFI obligations for 120 water and sanitation 

projects under the AIRP, and PCO contractors WGI/B&V and FluorAMEC 

had received about $139 million for 5 projects. The cost of AIRP projects 

done by Iraqi contractors ranges considerably, with the lowest at $5,000, 

the highest at $5.6 million, and the median at $250,000. AIRP projects were 

developed through consultations with Iraqi governors, engineering teams, 

and members of local councils, who were asked to identify quick-impact 

projects that would benefit the local population. 

State has set broad goals for providing essential services in Iraq, but the 

lack of sound performance data and measures for the water and sanitation 

sector present challenges in determining the impact of U.S. projects. 

State’s ability to measure the provision of essential services, such as 

access to water and sanitation, is limited by a lack of water metering and 

measures of water quality in Iraq. In the absence of such measures, State 

tracks the number of projects started and completed, but State was unable 

to substantiate which projects were included in its reported numbers. 

Moreover, because these data do not measure the availability or quality of 

water and sanitation services, it is difficult to determine how U.S. efforts 

are contributing to the goal of improving access to essential services. 

However, USAID-funded surveys demonstrate the potential for gathering 

data over time that could be used to gauge progress of U.S. reconstruction 

efforts. These surveys report that Iraqis experience low levels of access 

and satisfaction with water and sanitation services. 

 12According to a PCO official, after the dissolution of the CPA, the United States, per 

agreement with the Iraqi Finance Minister, manages the AIRP projects but may not award 

new ones. 

Additional Water and 

Sanitation Projects Have Been 

Funded from Iraqi Revenues 

Limited Performance 

Data and 

Measurements Make 

It Difficult to 

Determine Impact 
Page 14 GAO-05-872 Iraq Water and Sanitation 

In April 2004, the CPA strategic plan quantified targets for increasing Iraqi 

access to water and sanitation services. The CPA’s goals at that time were 

to increase potable water access to 90 percent of Iraqis, to increase 

sewerage access to 15 percent of Iraqis, and to reduce water losses from 

60 percent to 40 percent. The CPA expected that these targets would be 

met at the completion of PMO projects in 2 to 3 years. According to State 

and IRMO officials, however, the CPA goals were unrealistic because they 

were set without having baseline data on the condition of Iraq’s water and 

sanitation infrastructure and the lack of water metering. According to a 

State official, the baseline data is not reliable, even if it is available. 

State assumed responsibility for managing the U.S. reconstruction effort 

following the CPA’s dissolution and the transfer of power to an interim 

Iraqi government. The Iraq Reconstruction and Management Office 

(IRMO), a temporary office within the State Department, is responsible for 

strategic planning, setting priorities, and monitoring spending. State has 

set forth seven strategic objectives for Iraq reconstruction in the national 

security strategy for Iraq. One of these objectives is providing essential 

services, such as water and sanitation, but details of the water and 

sanitation objectives are classified. A senior IRMO official expected 

completion of the U.S. program to increase water access to about 50 or 60 

percent of the Iraqi population, far less than the 90 percent CPA initially 

outlined. 

The absence of water metering in Iraq greatly hinders the ability of the 

United States to assess progress toward the broader goal of providing 

essential services and improving Iraq’s water and sanitation sector. Iraq 

does not have a comprehensive system of area meters or residential 

meters that would help determine how much water in the distribution 

network reaches intended users. Water distribution networks are subject 

to some water loss or undocumented water usage, which can occur 

through leakage, unmetered but legitimate use such as in government 

buildings, or illegal connections. PCO and State officials have estimated 

water losses in Iraq to be about 60 percent for the country as a whole. By 

comparison, a 1991 survey cited by the World Health Organization found 

losses of 25 to 45 percent in developing countries. In the absence of 

metering, it is difficult to quantify the amount of water reaching users. 

Data on treatment capacity and sanitation access do not encompass 

quality measures and also hinder U.S. ability to gauge progress toward its 

goal of providing essential services. For example, because of problems 

with the distribution network, water that is potable at the treatment plants 

U.S. Goals for Improving 

Iraq’s Water and Sanitation 

Sector Are Broad 

Challenges in Measuring 

Water and Sanitation 

Access and Quality 
Page 15 GAO-05-872 Iraq Water and Sanitation 

may be contaminated by the time it reaches users. According to the PCO 

water sector lead, potable water and sewage lines in Iraq are sometimes 

adjacent to each other, allowing leaking sewage to enter the water mains 

when there is insufficient pressure in the lines. Furthermore, while Iraqis 

in some urban areas may be connected to a public sewer, according to a 

recent report,13 the sewage network may not be sufficient to safely 

transport waste away from the home and streets. 

In the absence of metering and quality measures, State and other U.S. 

agencies track reconstruction progress using other performance data, but 

these data have limitations. State tracks and reports the number of 

projects in progress and the number of projects completed. As of July 3, 

2005, State reported that 143 projects were complete. However, State 

could not document the location, scope, or cost of the projects included in 

this reporting, thereby limiting an evaluation of the significance of 

completed projects. We also could not reconcile State’s figures with other 

data from PCO and USAID. For example, as of June 28, 2005, PCO 

reported that it had completed 43 small projects, and USAID reported the 

completion of 18 larger-scale task orders and many more small projects. It 

is unclear how many projects may be included in these task orders. 

Furthermore, even if these data could be substantiated and reconciled, 

this type of reporting does not provide information on how U.S. efforts are 

improving Iraqi access to water and sanitation services or the quality of 

those services. 

Increases in water treatment capacity may help gauge progress, but this 

measure also has limitations when it comes to understanding the level of 

access provided. Currently, PCO expects to provide just over a million 

cubic meters per day of additional water treatment capacity as part of the 

PCO reconstruction program. PCO has estimated the number of expected 

beneficiaries from the added capacity by dividing the increased capacity 

by the estimated volume of water used by the average Iraqi. Although PCO 

uses what it believes is a conservative demand estimate that attempts to 

take into account water losses, plant efficiency, and industrial usage, the 

actual ultimate benefit to Iraqis is uncertain. 

 13Iraq Ministry of Planning and Development Cooperation and UN Development Program, 

Iraq Living Conditions Survey 2004 (Baghdad, Iraq: April 2005). 
Page 16 GAO-05-872 Iraq Water and Sanitation 

USAID has funded four Iraq Quality of Life Survey Reports through its 

Local Governance Program that provide important information about the 

level of access to water and sanitation services and Iraqi satisfaction with 

those services.14 Contractors, working with local Iraqis as survey 

enumerators, surveyed Iraqis about a number of issues, including their 

access to and satisfaction with essential services. Although certain areas 

could not be surveyed due to security constraints, the survey reports 

provide data for each of Iraq’s 18 governorates, as well as nationwide data. 

The most recent survey report, completed in February 2005, found that 

just under half of respondents rated their level of water supply as good to 

very good. Fewer than 20 percent of respondents rated the quality of 

sewerage and wastewater disposal as good to very good. Governorates in 

southern Iraq in particular showed particularly low levels of satisfaction 

with the water supply. See figures 2 and 3 for the most recent survey data 

on satisfaction with water supply and adequacy of sewerage and 

wastewater disposal at the governorate level.15

 14Survey reports are dated October-November 2003, June 2004, September 2004, and 

February 2005. 

15The USAID contractor reported a good overall response rate to the survey. However, 

response rates per governorate and per question were not provided, and sampling errors 

were not calculated, so the margin of error for the responses is unknown. In addition, the 

responses were not weighted by governorate, although the samples by governorate were 

not strictly proportional. For example, while Baghdad contains about a third of Iraq’s urban 

population, its sample represented only about a quarter of the entire sample for Iraq. As a 

result, it is possible that responses from some governorates are more influential than 

responses from others. 

Surveys Can Provide 

Information on Access to 

Water and Sanitation 

Services and Satisfaction 

with Service Quality 
Page 17 GAO-05-872 Iraq Water and Sanitation 

Figure 2. Iraqi Satisfaction with Water Supply by Governorate, February 2005 
Page 18 GAO-05-872 Iraq Water and Sanitation 

Figure 3. Iraqi Satisfaction with Adequacy of Sewerage and Wastewater Disposal by 

Governorate, February 2005 

These data provide insight into Iraqi satisfaction with the level of access to 

water and sanitation services and demonstrate the potential for gathering 

data over time that could be used to gauge progress of U.S. reconstruction 

efforts. In commenting on our July 2005 report on Iraq reconstruction, the 

State Department stated that it has not allocated money for satisfaction 

surveys because the surveys are expensive and difficult and dangerous to 

complete in a wartime environment.16 In contrast, USAID has included 

surveys as part of the agency’s efforts to assess the quality of a variety of 

essential services provided to the Iraqi people. USAID has completed four 

surveys since October 2003 and intends to continue periodic surveys. 

 16GAO, Rebuilding Iraq: Status of Funding and Reconstruction Efforts, GAO-05-876

(Washington, D.C.: July 28, 2005). 
Page 19 GAO-05-872 Iraq Water and Sanitation 

Poor security and a variety of management challenges have adversely 

affected the implementation of the U.S. water and sanitation 

reconstruction program in Iraq. Security conditions have led to project 

delays and increased costs for security services. Management challenges 

such as low initial cost estimates and delays in funding and awarding task 

orders have also led to the reduced scope of the water and sanitation 

program and delays in starting projects. In addition, U.S. agency and 

contractor officials have cited difficulties in initially defining project 

scope, schedule, and cost, as well as concerns with project execution, as 

further impeding progress and increasing program costs. These difficulties 

include lack of agreement among U.S. agencies, contractors, and Iraqi 

authorities; high staffing turnover; an inflationary environment that makes 

it difficult to submit accurate pricing; unanticipated project site 

conditions; and uncertain ownership of project sites. 

According to agency officials and documentation, the ongoing insurgency 

in Iraq has delayed the U.S. water and sanitation reconstruction program 

and increased its cost. Attacks, threats, and intimidation against project 

contractors and subcontractors have led to temporary project shutdowns 

and disrupted the movement of materials and personnel to and from 

project sites. The amount of work included in some projects has also 

decreased due to the poor security conditions. 

Although it is difficult to quantify the costs in time and money resulting 

from poor security conditions, agency and contractor documents and 

interviews with agency officials cite numerous security-related issues that 

have resulted in delays in the design and execution of projects and 

reduced scopes of work.17 For example: 

• Security conditions have limited the ability of contractors to get to 

project sites and perform site assessments, thus delaying project 

design. At one project site in northern Iraq, for instance, the contractor 

cancelled its assessment when its convoy came under attack. 

 17While it is apparent from these and other examples that security has affected the progress 

of reconstruction, it is not always possible to separate delays and cost increases caused by 

poor security conditions from delays and cost increases caused by other factors. For 

example, USAID task order amendments list the reasons why a job’s schedule is being 

extended, but several factors may be cited as part of the same extension request. One 

project in southern Iraq received a 75-day extension due to delays in awarding subcontracts 

and receiving permits from highway department, issues with relocating illegal roadside 

markets, as well as deterioration in the overall security situation. 

Security and 

Management 

Challenges Have 

Adversely Affected 

Implementation of 

Water and Sanitation 

Projects 

Poor Security Conditions 

Have Slowed 

Reconstruction and 

Increased Costs 
Page 20 GAO-05-872 Iraq Water and Sanitation 

• Work at a wastewater plant in central Iraq was halted for 

approximately 2 months in early 2005 because insurgent threats drove 

subcontractors away and made the work too hazardous to perform. 

• Work was suspended at another sewer repair project in central Iraq 

from early August to early November 2004, and PCO reported that a 

sanitation project in central Iraq was halted for the entire month of 

March 2005 due to poor security conditions. 

• At the time of the Iraqi national election in January, project sites in Iraq 

were shut down for at least 3 days. 

• Iraqi employees and subcontractors working on water and sanitation 

projects countrywide have been subject to hostility, violence, and 

intimidation. At one project, a lead employee received a life-threatening 

e-mail. The employee was subsequently chased by two armed men and 

fled the country. The balance of the 12-member team refused to go 

back to the site for some time. At another location in northern Iraq, a 

subcontractor withdrew from the job site after receiving threats. It 

took nearly 2 months for a qualified replacement subcontractor to 

begin work. 

• A wastewater plant project in central Iraq was subject to looting and to 

attacks with improvised explosive devices. Iraqi employees sabotaged 

this plant in November 2004 to protest U.S. operations in Fallujah by 

walking off the job and leaving the plant running. The untended plant 

stagnated, leading to damaged equipment and the need for a substantial 

clean-up operation. As of July 2005, this plant remains closed. 

• Insurgents have destroyed deliveries of needed materials to job sites. 

At one water project in southern Iraq, death threats against key 

employees have delayed construction and deliveries to the project site. 

The same site was subjected to threats of violence and extortion 

attempts by local tribesmen. 

• USAID greatly reduced the scope of work for two pump station 

projects due to security concerns and lack of site access permission 

from the Iraqi ministry. In April 2005, the contractor reported that these 

projects would be limited to design work, minor repairs, and delivery 

of equipment, instead of the originally planned full construction. U.S 

officials stated that Iraqi ministries would complete construction using 

materials provided by the United States. 
Page 21 GAO-05-872 Iraq Water and Sanitation 

Poor security conditions also have increased the cost of providing security 

services for contractors and sites. For example, when a project is shut 

down or delayed due to security conditions, the fixed costs of contractor 

camps and salaries continue to accrue even though contractors in the field 

are unable to continue their work. USAID, PCO, and GAO have each 

quantified some aspect of increased security requirements affecting 

reconstruction costs; however, none has quantified a cost estimate for the 

water sector as a whole. The USAID Inspector General found that costs for 

security subcontractors as a percentage of the costs for USAID’s 

reconstruction effort in multiple sectors went from 4.2 percent of 

contractor billings between March 2003 and February 2004 to 22.3 percent 

between March and December 2004. Based on an analysis of a sample of 

water projects, PCO estimated that the deteriorated security environment 

added about 7 percent to project costs in the water sector. We have also 

analyzed the security expenses of multiple reconstruction contracts and 

found that cost to obtain private security providers and security-related 

equipment accounted for more than 15 percent of contract costs on 8 of 

the 15 reconstruction contracts analyzed.18

Several management challenges in executing water and sanitation projects 

have resulted in reduced scopes of work, project delays, and increased 

costs. Factors affecting the scope and pace of reconstruction have 

included understated initial cost estimates and delays in receiving 

allocated funding and awarding task orders. U.S. agencies and contractors 

have also faced difficulties in completing scopes of work, finalizing 

associated costs, and executing projects in an unpredictable environment. 

These difficulties include lack of agreement among U.S. agencies, 

contractors, and Iraqi authorities; staff turnover; an inflationary 

environment that makes it difficult to submit accurate pricing; 

unanticipated project site conditions; and uncertain ownership of project 

sites. 

According to PCO, initial assessments prepared by the CPA 

underestimated project costs and contributed to reductions in the scope of 

U.S. reconstruction efforts. These initial assessments gave rough budget 

estimates for repairing or constructing water and sanitation facilities and, 

according to PCO, assumed more benign operating conditions. The CPA 

 18GAO, Rebuilding Iraq: Actions Needed to Improve Use of Private Security Providers, 

GAO-05-737 (Washington, D.C.: July 28, 2005). 

Management Challenges 

Have Adversely Affected 

Project Implementation 

Underestimated Costs and 

Funding Delays 
Page 22 GAO-05-872 Iraq Water and Sanitation 

relied on these estimates in putting together its proposed list of 137 

projects to be executed with the original fiscal year 2004 IRRF allocation 

of $4.33 billion. Because the estimates were low, the $4.33 billion 

allocation was never sufficient to complete the original CPA list of 

projects. According to a senior PCO official, these estimates were usually 

very low in comparison to the estimates that contractors developed after 

more thorough field assessments of project sites. In general, PCO found 

these initial estimates to be 25 to 50 percent below actual costs. According 

to a PCO water sector official, the low estimates meant that the PCO 

construction program was underfunded from the start. 

Contractors and agency officials cited delays in receiving funding as 

challenges to awarding and completing task orders and staying within 

budgets. PCO reported that the receipt of fiscal year 2005 funding for the 

sector was delayed by at least 3 months, affecting its ability to award 

projects in a timely manner. In addition, according to a PCO official, as of 

June 2005, PCO had not yet received the apportionment for two task 

orders awarded in January 2005. These task orders are not only delayed 

and limited in the amount of work that can be done, but they are still 

accruing overhead costs that may put the projects over budget. One 

contractor stated that increased overhead costs resulted from delays in 

receiving task orders from the government immediately after contract 

award and again following the June 2004 dissolution of the CPA. PCO 

contractors WGI/B&V and FluorAMEC stated that they began mobilizing 

staff after receiving their contracts in March 2004 based on the 

expectation that they would receive close to their maximum contract 

awards totaling $1.7 billion.19 As of June 2005, PCO had obligated about 

$873 million in task orders to these contractors.20 Because of the lower 

amount of funding, mobilized staff who were no longer needed were 

withdrawn from Iraq. 

Following the award of task orders, PCO projects have been subject to 

delays in the process of developing a final cost, schedule, and scope of 

work, a process called definitization, and in overall project execution. For 

18 of the 24 PCO task orders, the time from initial issuance of a task order 

to definitization has ranged from 6 to 10 months, with the scope of one 

task issued in June 2004 for work in Al Anbar province still not finalized as 

of June 2005. The Federal Acquisition Regulation states that the process 

 19The three PCO contracts had ceiling values of $500 million, $600 million, and $600 million. 

20This figure includes obligations from appropriated funds and from the DFI. 

Challenges in Finalizing Work 

Terms and Costs and Executing 

Projects 
Page 23 GAO-05-872 Iraq Water and Sanitation 

should be completed within 6 months of signing the contract, or before 

completion of 40 percent of the work to be performed, although a 

contracting officer may extend this time in extreme cases and according to 

agency procedures.21 Without a definitized task order, DOD may generally 

obligate only up to 50 percent of the project’s negotiated overall ceiling 

price.22 PCO has made some funds available to its contractors prior to 

definitization, enabling limited efforts such as planning and defining the 

scope of work. However, if the definitization process does not keep pace 

with the cost of these preliminary efforts, a project may come to a halt 

once these limited funds are exhausted. Agency and contractor officials 

cited the following factors as affecting both the definitization process and 

the overall pace and cost of the U.S. water and sanitation reconstruction 

effort: 

• Lack of agreement between U.S. agencies and Iraqi authorities: 

Agency and contractor officials and reports have cited difficulty in 

getting agreement among Iraqi authorities, U.S. agencies, and 

contractors on scopes of work and construction details. For example, 

at one site, Iraqi officials wanted to repair a water treatment plant 

whereas the U.S. agency had planned to replace it. At another site, local 

authorities disagreed with the pipe specified for a particular project. 

Another project was delayed when local Iraqi officials insisted on using 

brick instead of concrete block for construction. At a wastewater 

project, local officials wanted a certain type of sewer design that 

increased the project’s cost. In addition, U.S. agencies and Iraqi staff 

have had to overcome security and communication constraints to 

coordinate agreement on the scope of work. For example, one PCO 

official stated that only half of the Iraqis invited to a scheduled project 

meeting were able to attend—the others were absent due to the danger 

of traveling, being stopped in traffic, or for other reasons. 

• Frequent Staff Turnover: One PCO contractor cited discontinuity in 

key U.S. government contacts, such as new contracting officers 

rotating in and out of Iraq, as disrupting both cost and schedule. New 

 21Federal Acquisition Regulations 16.603-2. To meet urgent operational needs, as is the case 

in Iraq’s reconstruction, agencies may authorize contractors to begin work before contracts 

or task orders have been definitized—that is, before key terms and conditions, including 

price, have been defined and agreed upon. While this approach allows agencies to initiate 

work quickly, it also can result in potentially significant additional costs and risks for the 

government. 

22See 10 U.S.C. § 2326; Defense Federal Acquisition Regulations Supplement subpart 217.74. 
Page 24 GAO-05-872 Iraq Water and Sanitation 

contracting officers had to be brought up to speed on work and issues 

and would sometimes ask the contractor to resubmit information in 

formats different from those previously required. A PCO official agreed 

that turnover in contract staff impacted project progress, and another 

noted that the contracting office in Iraq lacked sufficient staff and 

equipment, including computers, contract-writing software, and filing 

cabinets. This official also noted that some of the staff assigned as 

contracting officers lacked experience with the type of projects PCO 

awarded. 

• Unpredictable costs: According to PCO officials, inflation in Iraq has 

led to a situation where local labor and materials are in high demand 

and short supply. Contractors have stated that the number of qualified 

Iraqi contractors capable of undertaking some reconstruction work is 

limited. Additionally, PCO officials noted that inflation in the cost of 

labor and basic materials such as concrete and pipe had raised 

projected project costs. For example, a U.S. contractor cited increases 

in the cost of camps, transportation, and specialized labor such as 

experts in unexploded ordnance investigation and disposal. The 

contractor expected costs to increase because the demand for these 

specialized services likely exceeded the supply. 

• Poor site conditions: Contractors found some project sites inadequate 

or unusable. For example, one proposed site in northern Iraq for a new 

water treatment plant was flooded as a result of a break in a nearby 

irrigation dike. The project was delayed while the site was drained. One 

contractor had to redesign a proposed project when it found newly 

constructed houses and a school near the proposed project’s right of 

way. Contractors also encountered unanticipated sewer blockages and 

additional treatment equipment requiring repair. 

• Unclear site ownership: Unclear ownership has delayed projects. In 

some cases, Iraqi ministries have proposed sites where contractors 

subsequently found squatters with competing property claims. In these 

situations, U.S. contractors halted work until the ministry could 

provide a usable site. For example, a water treatment plant in central 

Iraq was delayed until a junkyard and squatters were removed. In 

southern Iraq in March 2005, a PCO contractor was working to relocate 

families living in water pump stations. A landfill project in central Iraq 

encountered site selection difficulties stemming from both unclear land 

ownership and environmental concerns. Two proposed sites had 

ownership issues, and the third proposed site was environmentally 

infeasible due to a high groundwater level. USAID cancelled the 

project, estimated to cost $20 million if completed, as a result of these 
Page 25 GAO-05-872 Iraq Water and Sanitation 

site issues. In all, about $4.1 million was budgeted for this project as of 

June 2005. These funds include costs to design the landfill for the 

ultimately unusable site, but were also used for equipment that will be 

stored and used at other projects. 

As of June 2005, U.S.-funded water and sanitation projects representing 

about $52 million of the approximately $200 million in completed projects 

were either not operating or were operating at lower capacity. In late 

August 2004, U.S. contractors and agencies identified several areas in 

which Iraqi capacity to maintain and operate reconstructed facilities 

needed improvement. U.S. concerns included problems with staffing, 

unreliable power to run treatment plants, insufficient spare parts, and 

poor operations and maintenance procedures. In late March 2005, State 

allocated $25 million for up to 1 year of additional on site operations 

assistance and supply procurement at USAID’s completed projects. In 

addition, U.S. agencies have begun risk forecasting and interagency 

planning efforts to address current and potential problem areas. However, 

the large-scale construction projects yet to be completed remain at risk 

due to staff and resource shortages. 

As of June 2005, USAID’s contractor Bechtel had completed approximately 

$200 million in projects under its two contracts; however, projects costing 

about $52 million could not be commissioned or their capacity had been 

diminished due to the theft of key equipment, inadequate Iraqi staff, or 

inadequate supplies of electricity and treatment chemicals. For example, 

one wastewater plant repaired at a cost of $5.8 million was partially shut 

down due to the theft of key electrical equipment from the plant. Two 

wastewater treatment plants costing about $11 million lacked reliable 

supplies of electricity and diesel fuel for generators. These two plants had 

lacked these supplies since December 2004. An additional two wastewater 

plants, for which about $24 million had been obligated, lacked adequate 

Iraqi staff to function continuously or had inadequate supplies of reliable 

electricity. Finally, all the water plants repaired in one southern Iraq 

governorate lacked the water treatment chemicals and supplies needed for 

proper operation. The United States obligated $10.4 million for repairs to 

these plants in southern Iraq. 

Iraq’s Lack of 

Capacity to Operate 

and Maintain U.S.-

Funded Projects Led 

to Inoperable 

Facilities and Greater 

U.S. Focus on 

Improving Project 

Sustainability 

Completed Projects Lack 

the Resources to Operate 

at Intended Capacity 
Page 26 GAO-05-872 Iraq Water and Sanitation 

The United States incorporated training programs and capacity 

development into its reconstruction program beginning in 2003. USAID’s 

Phase I reconstruction contract required Bechtel to involve government 

ministries in implementing reconstruction projects and to provide 

technical assistance and training to build Iraqi capacity. In addition, PCO 

contract provisions require WGI/B&V and FluorAMEC to provide 

operations and maintenance training and manuals and be available for 

additional support for 90 days following project completion. PCO also 

awarded two task orders that more explicitly include capacity 

development efforts. In July 2004, PCO awarded a task order for water 

conservation and network repair to address the numerous leaks in Iraq’s 

water mains. As part of this effort, the contractor is surveying training 

needs, providing on-the-job and classroom training to Iraqi ministry staff, 

and improving management tools and systems. In January 2005, PCO 

awarded another task order to provide systems development, professional 

mentoring, and technical training to the Iraqi Ministry of Municipalities 

and Public Works in eight governorates. 

Bechtel began to report concerns about institutional strengthening in Iraq 

beginning in August 2004 and provided a detailed assessment of the issue 

in December 2004. In August 2004, Bechtel noted to USAID that the 

sustainability of water projects was a critical concern in its reconstruction 

efforts. In December 2004, Bechtel submitted a paper to USAID that 

provided detailed information on areas it considered crucial to ensuring 

the sustainability of water and sanitation projects being completed under 

its Phase I contract. These include: 

• Staffing: Bechtel estimated that water and wastewater plants had only 

about one third of the staff needed. These plants lacked the staff to 

operate 24 hours per day and were shut down at night. Day staff included a 

significant number of temporary employees and “day laborers.” 

• Lack of electrical power and diesel fuel: The unreliable Iraqi electrical grid 

required some plants to run on backup generators. However, generators 

needed diesel fuel to power them, and the fuel was not always available. 

• Spare parts: Bechtel’s Phase I contract with USAID did not provide 

funding for spare parts for rehabilitated plants. Without these spares or the 

funds to buy them, Iraqi staff would likely have to cannibalize parts of the 

facility, borrowing parts from one machine to repair others. 

U.S. Agencies Included 

Training and Capacity 

Development 

Requirements in Contracts 

and Identified 

Sustainability Issues 
Page 27 GAO-05-872 Iraq Water and Sanitation 

• Poor operating practices: Equipment was not being operated or 

maintained correctly. For example, filters were not cleaned, and chlorine 

and alum dosing equipment was available but not used. 

• Lack of maintenance programs: Iraqi staff did not undertake repairs until 

a situation became critical. One facility, a key pumping station for a city in 

southern Iraq, had to be taken completely offline to allow for repairs. 

In early 2005, a working group of State, USAID, PCO, and U.S. Army Corps 

of Engineers officials assessed operations and maintenance problems in 

the water sector. According to the group, much of the Iraqi workforce was 

comprised of day laborers with little operations capability, and operations 

managers were often political appointees with little or no water sector 

experience. According to the working group’s assessment, most water and 

sewage treatment plants were the joint responsibility of the Ministry of 

Municipalities and Public Works and the local municipalities or 

governorates, which complicated the division of responsibility for the 

plants. Further, procurement and supply issues led to severe capacity 

limitations due to shortages of electricity, diesel fuel, and chemical 

supplies. 

In response to problems with completed water and sanitation projects, 

U.S. agencies undertook efforts to provide additional support for Iraqi 

operations and management. First, State increased funds to support the 

operation of water and sanitation facilities after their turnover to Iraqi 

authorities. In late March 2005, nearly 7 months after the initial USAID 

contractor report of sustainability concerns, State reallocated funding 

from an electrical generation project and provided $25 million to USAID to 

support the operations, maintenance, and logistics at USAID’s recently 

completed water and sanitation projects for up to 1 year. According to 

USAID, Bechtel will hire local Iraqi companies to provide these services. 

In proposing the reallocation, the U.S. embassy in Iraq noted that it was 

moving from the previous model of building projects and turning them 

over to Iraqi management toward a “build-train-turnover” system to 

protect the U.S. investment in Iraq’s infrastructure. State has not 

committed funds for similar support at other USAID and PCO water and 

sanitation projects. 

Second, in March 2005, PCO provided $10.3 million to CH2M Hill/PWI for a 

capacity development initiative, a 12-month effort in eight governorates 

that will include workshops, courses, and hands-on training. Areas 

addressed will include baseline service assessments, operations and 

U.S Agencies Have 

Increased Efforts to 

Support Iraqi Operations 

and Management, but 

Future Sustainability Is 

Unclear 
Page 28 GAO-05-872 Iraq Water and Sanitation 

maintenance planning and budgeting, project management, planning and 

design, finance and administration, water quality, and communications. 

The initiative also requires CH2M Hill/PWI to work with Iraqi ministry staff 

on management efforts such as strategic planning, facility design 

processes and standards, and international donor coordination. 

Third, in April 2005, PCO began using a formal risk matrix to evaluate the 

potential risk of failure for strategic and high-cost projects after their 

handover to Iraqi management and to direct support to where it is needed. 

Prior to project completion, PCO’s sector contractors will assess five 

factors and calculate a score that estimates the probability a 

reconstruction project will not function as intended. Two of the five 

factors are the quality of PCO’s construction activities and the completion 

of PCO’s required operations and maintenance training and 

documentation. PCO officials consider these factors to be under their 

direct influence and therefore the least susceptible to failure. According to 

PCO officials, the remaining three factors present the greater risks: (1) the 

ability and commitment of Iraqi facility operators and management to 

perform required operations and maintenance procedures, (2) 

management support of operations and maintenance efforts, and (3) 

adequate funding and direction from Iraqi ministries. PCO has not set a 

threshold score whereby a high risk factor would delay the handover. 

Finally, in May 2005, State/IRMO, USAID, PCO, and the U.S. Army Corps of 

Engineers formed an interagency working group to identify ways of 

addressing Iraq’s capacity development needs. The working group is in its 

early stages, and it is unknown what direction their recommendations may 

take. PCO has identified potential future steps: (1) provide a year of 

additional operations and maintenance support similar to what USAID will 

provide for its Phase I projects, (2) expand its training effort with the Iraqi 

Ministry of Municipalities and Public Works to all Iraqi governorates, and 

(3) extend the capacity development initiative beyond the 12 months 

currently planned. 

Despite these efforts, the long-term outlook for sustaining reconstructed 

Iraqi facilities remains unclear. USAID’s $25 million program provides 

initial support for capacity development, but many of these efforts are in 

their early stages. In addition, facilities at risk of failure could still be 

handed over to Iraqi management. The initial U.S. experience with projects 

completed under USAID’s Phase I contract and PCO’s risk assessment 

have shown that Iraqi ministry capacity remains an obstacle to program 

success. U.S. agencies have obligated about $1.2 billion in U.S. 

appropriated funds for projects they expect to complete between mid-2005 
Page 29 GAO-05-872 Iraq Water and Sanitation 

and 2008. These projects will require more trained staff, skilled managers, 

spare parts, and supplies to function effectively. 

The United States has obligated about $1.8 billion in appropriated funds to 

restore Iraq’s water and sanitation infrastructure and has made some 

progress in a challenging security environment. However, it is difficult to 

determine the overall progress and impact of U.S. efforts because of 

limited performance data and measurements. These limited performance 

data and measurements in turn make it difficult to assess the effectiveness 

of U.S. water and sanitation reconstruction efforts. State has primarily 

reported on the numbers of projects completed and the expected capacity 

of reconstructed treatment plants. However, these data do not provide 

information on the scope and cost of individual projects nor do they 

indicate how much clean water is reaching intended users as a result of 

these projects. Information on access to water and its quality is difficult to 

obtain in an insecure environment and without water metering facilities. 

However, opinion surveys assessing Iraqis’ access and satisfaction with 

water and sanitation services have the potential for providing important 

data to measure the impact of U.S. reconstruction efforts. Moreover, the 

United States has funded most water and sanitation reconstruction 

assistance in Iraq to date. As a result, progress and benefits measured 

through the use of surveys and other data collection methods are more 

easily attributed to U.S. efforts. 

Iraqis have been unable to operate and maintain U.S.-funded water and 

sanitation facilities due to a lack of reliable power, trained Iraqi staff, and 

required chemicals and supplies. In response, U.S. agencies have taken 

initial steps to improve Iraqi capacity to operate and maintain water and 

sanitation facilities. However, these efforts are just beginning. It is unclear 

whether the Iraqis will be able to maintain and operate both completed 

projects and projects expected to be completed through 2008 for which 

the U.S. has obligated more than a billion dollars. Without assurance that 

Iraqis have adequate resources to maintain and operate completed 

projects, the U.S. water and sanitation reconstruction program risks 

expending program funds on projects with limited long-term impact. 

To more accurately report the results of U.S. reconstruction efforts in 

water and sanitation, we recommend that the Secretary of State establish 

indicators and measures to assess how the U.S. efforts are improving the 

quality and quantity of water and sanitation services in Iraq. For example, 

State could include information on project scope and cost in its reporting 

Conclusion 

Recommendations for 

Executive Action 
Page 30 GAO-05-872 Iraq Water and Sanitation 

on numbers of projects under way and completed. State could also include 

surveys that measure Iraqis’ access to water and sanitation facilities and 

their satisfaction with these services in selected geographic areas that are 

served by larger-scale U.S. reconstruction efforts. Efforts to develop 

performance measures should take into account the challenges in 

collecting data in a difficult security environment. 

To help ensure that projects funded by U.S. appropriations operate at their 

intended capacity and provide benefits to the Iraqi people after their 

completion, we recommend that the Secretary of State work with Iraqi 

ministries to assess the resources needed to operate and maintain new and 

repaired water and sanitation facilities before they are turned over to Iraqi 

management and, afterwards, work with the Iraqi government to ensure 

that Iraq has these resources. 

We provided a draft of this report to the Departments of Defense and State 

and the U.S. Agency for International Development. 

The Department of State provided written comments, which are reprinted 

in appendix II. State agreed with our recommendations and stated that it is 

refining its performance metrics and working with the Iraqi government to 

assess the resources needed to sustain water and sanitation facilities. 

State also endorsed our main findings and provided additional comments 

to elaborate on its water and sanitation efforts in Iraq. State also provided 

technical comments, which we incorporated where appropriate. 

The U.S. Agency for International Development also provided a written 

response, which is reprinted in appendix III. The agency stated that it is 

pleased that the report prominently mentions the importance of 

operations and maintenance in the water sector. USAID added that the 

report contributes to the discussion of next steps in Iraq reconstruction by 

clarifying the economic and social context of the management of public 

utilities in Iraq. 

The Department of Defense did not provide written comments on our 

report; however, it provided technical comments, which we incorporated 

where appropriate. 

We are sending copies of this report to interested congressional 

committees. We will also make copies available to others on request. In 

Agency Comments 
Page 31 GAO-05-872 Iraq Water and Sanitation 

addition, this report is available on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions, please contact me at (202) 512-8979 

or christoffj@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. 

Key contributors to this report are listed in appendix IV. 

Joseph A. Christoff 

Director, International Affairs and Trade 
Page 32 GAO-05-872 Iraq Water and Sanitation 

List of Committees 

The Honorable Thad Cochran 

Chairman 

The Honorable Robert C. Byrd 

Ranking Minority Member 

Committee on Appropriations 

United States Senate 

The Honorable Mitch McConnell 

Chairman 

The Honorable Patrick J. Leahy 

Ranking Minority Member 

Subcommittee on State, Foreign Operations, 

and Related Programs 

Committee on Appropriations 

United States Senate 

The Honorable Ted Stevens 

Chairman 

The Honorable Daniel K. Inouye 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

United States Senate 

The Honorable John Warner 

Chairman 

The Honorable Carl Levin 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Richard G. Lugar 

Chairman 

The Honorable Joseph R. Biden, Jr. 

Ranking Minority Member 

Committee on Foreign Relations 

United States Senate 
Page 33 GAO-05-872 Iraq Water and Sanitation 

The Honorable Susan M. Collins 

Chairman 

The Honorable Joseph I. Lieberman 

Ranking Minority Member 

Committee on Homeland Security 

and Governmental Affairs 

United States Senate 

The Honorable C. W. Bill Young 

Chairman 

The Honorable John P. Murtha 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 

The Honorable Jim Kolbe 

Chairman 

The Honorable Nita M. Lowey 

Ranking Minority Member 

Subcommittee on Foreign Operations, 

Export Financing, and Related Programs 

Committee on Appropriations 

House of Representatives 

The Honorable Duncan L. Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

The Honorable Tom Davis 

Chairman 

The Honorable Henry A. Waxman 

Ranking Minority Member 

Committee on Government Reform 

House of Representatives 
Page 34 GAO-05-872 Iraq Water and Sanitation 

The Honorable Christopher Shays 

Chairman 

Subcommittee on National Security, 

Emerging Threats, and International Relations 

Committee on Government Reform 

House of Representatives 

The Honorable Henry J. Hyde 

Chairman 

The Honorable Tom Lantos 

Ranking Minority Member 

Committee on International Relations 

House of Representatives 
Appendix I: Objectives, Scope & Methodology 

Page 35 GAO-05-872 Iraq Water and Sanitation 

As part of GAO’s review of reconstruction efforts in Iraq initiated under 

the Comptroller General’s authority, we examined U.S. activities directed 

at rebuilding the water and sanitation sector. Specifically, we assessed (1) 

the funding and status of U.S. activities, (2) U.S. efforts to measure 

progress, (3) the factors affecting the implementation of reconstruction 

activities, and (4) the sustainability of U.S.-funded projects. To accomplish 

our objectives, we relied primarily on U.S. agency and contractor 

reporting. We also met with agency and contractor officials in the United 

States. Although we did not travel to Iraq, we interviewed U.S. officials 

based in Iraq by telephone, exchanged information through email, and met 

with contractor officials in the United States who had spent time in Iraq. 

We also reviewed U.S. government-funded surveys that document Iraqi 

perceptions of the quality and quantity of water and sanitation services. 

In assessing resources supporting the reconstruction of Iraq, we focused 

on the sources and uses of U.S., Iraqi, and international funding. U.S. 

agencies provided us with electronic data files for appropriated funds, the 

Development Fund for Iraq (DFI), vested assets, and seized assets. These 

files generally included objective or project descriptions with allocated, 

obligated, and disbursed amounts. We assigned each of the funding line 

items to broad categories based on the descriptive information available in 

the data files. To assign the data to a category, we relied on project 

descriptions from agency data files. 

In addressing the amount of U.S. funds that have been appropriated, 

obligated, and disbursed for the Iraq reconstruction effort, we collected 

funding information from contractors, the Department of Defense (DOD), 

including the Project and Contracting Office (PCO); Department of State; 

and the U.S. Agency for International Development (USAID). Data for U.S. 

appropriated funds are as of end June 2005. We also reviewed Special 

Inspector General for Iraq Reconstruction reports, and Office of 

Management and Budget documents. Although we have not audited the 

funding data and are not expressing our opinion on them, we discussed 

the sources and limitations of the data with the appropriate officials and 

checked them, when possible, with other information sources. We 

determined that the data were sufficiently reliable for characterizing water 

and sanitation projects. To address international assistance for rebuilding 

Iraq, we collected and analyzed information provided by the State 

Department’s Bureau of Economic and Business Affairs. We also collected 

and reviewed reporting documents from the International Reconstruction 

Fund Facility for Iraq (IRFFI). To assess the reliability of the data on the 

pledges, commitments, and deposits made by international donors, we 

interviewed officials at State who are responsible for monitoring data 

Appendix I: Objectives, Scope & 

Methodology 
Appendix I: Objectives, Scope & Methodology 

Page 36 GAO-05-872 Iraq Water and Sanitation 

provided by the IRFFI and donor nations. We determined that the data on 

donor commitments and deposits made to the IRFFI were sufficiently 

reliable for the purposes of reporting at the aggregate level. 

To determine the status of U.S. activities in the water and sanitation 

sector, we reviewed documents obtained from the former CPA, the State 

Department, PCO, USAID, and agency contractors. Specifically, we 

reviewed contracts, task orders, status reports, and planning documents 

prepared by USAID, the former CPA, State, PCO, and contractors. We also 

interviewed USAID, State, and PCO officials and their contractor 

representatives. We focused on the five major USAID and PCO contracts 

for water and sanitation implemented by U.S. contractors because they 

received the majority of U.S. appropriated funds. We report progress data 

as of the end of June 2005. Funding data for the major contracts has been 

reported as of the end of March for USAID contracts and end of June for 

PCO contracts. 

To assess U.S. efforts to measure progress we reviewed planning 

documents from the CPA and State, and agency reporting documents from 

PCO, USAID, and State. We also contacted agency officials for clarification 

of some of this data and further information in evaluating its effectiveness 

in determining the impact of the U.S. program. We reviewed the 

methodology of the Iraq Quality of Life Survey and contacted contractor 

officials to review the methodology and survey limitations. The USAID 

contractor did not conduct cross-checks for the internal consistency of 

responses on water supply, but the satisfaction data reported in the survey 

are analogous to the findings on access reported in the earlier UN/World 

Bank and USAID/Bechtel assessments. We determined that the survey data 

was sufficiently reliable to report in the quartile bands used in this report. 

To determine the factors affecting the implementation of reconstruction 

activities, we reviewed contractor and agency reporting and interviewed 

agency officials in the United States and Iraq. Specifically, we reviewed 

agency and contractor reports, and we interviewed USAID, State, and PCO 

officials and contractor representatives in the United States and in Iraq. 

We reviewed the data for discrepancies, interviewed officials familiar with 

the data collection, and determined that the information from these 

sources was sufficiently reliable to meet our reporting objectives. 

To determine the sustainability of U.S.-funded projects, we reviewed 

agency contracts, contractor reporting, and agency reporting. Specifically, 

we reviewed USAID, PCO, and contractor reports, and we interviewed 

USAID, State, and PCO officials and contractor representatives in the 
Appendix I: Objectives, Scope & Methodology 

Page 37 GAO-05-872 Iraq Water and Sanitation 

United States and in Iraq. We determined that the information from these 

sources was sufficiently corroborated and reliable to meet our reporting 

objectives. 

We conducted our review from September 2004 through August 2005 in 

accordance with generally accepted government auditing standards. 
Appendix II: Comments from the Department 

of State 

Page 38 GAO-05-872 Iraq Water and Sanitation 

Appendix II: Comments from the Department 

of State 
Appendix II: Comments from the Department 

of State 

Page 39 GAO-05-872 Iraq Water and Sanitation 
Appendix II: Comments from the Department 

of State 

Page 40 GAO-05-872 Iraq Water and Sanitation 
Appendix III: Comments from the U.S. Agency 

for International Development 

Page 41 GAO-05-872 Iraq Water and Sanitation 

Appendix III: Comments from the U.S. 

Agency for International Development 
Joseph A. Christoff, Director (202) 512-8979 

John Hutton (Assistant Director), Monica Brym, Aniruddha Dasgupta, 

Charles D. Groves, B. Patrick Hickey, Sarah Lynch, Michael Simon, and 

Audrey Solis made key contributions to this report. Sharron Candon, Lynn 

Cothern, Martin De Alteriis, Judy McCloskey, and Judith Williams 

provided technical assistance. 

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(320316) 
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