OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

April 28, 2008 

MEMORANDUM FOR U.S. AMBASSADOR TO IRAQ 

 DIRECTOR, OFFICE OF IRAQ RECONSTRUCTION, 

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT 

COMMANDING GENERAL, U.S. ARMY CORPS OF ENGINEERS 

COMMANDING GENERAL, GULF REGION DIVISION, 

U.S. ARMY CORPS OF ENGINEERS 

COMMANDER, JOINT CONTRACTING COMMANDIRAQ/AFGHANISTAN 

DIRECTOR, AIR FORCE CENTER FOR ENGINEERING AND THE 

ENVIRONMENT 

DIRECTOR, IRAQ TRANSITION ASSISTANCE OFFICE 

SUBJECT: Interim Report on Iraq Reconstruction Contract Terminations 

(SIGIR-08-013) 

We are providing this audit report for your information and use. We performed this audit in 

accordance with our statutory responsibilities contained in Public Law 108-106, as amended. 

This law provides for independent and objective audits of policies designed to promote economy, 

efficiency, and effectiveness of programs and operations and to prevent and detect fraud, waste, 

and abuse. This report discusses the results of our review of Iraq reconstruction contract 

terminations. This review was conducted as SIGIR project 7029. 

We considered written comments from the U.S. Army Corps of Engineers Gulf Region Division, 

and the Iraq Transition Assistance Office when preparing this report. The comments are 

addressed in the report, where applicable, and copies are included in appendix C of this report. 

We also received technical comments from the U.S. Agency for International Development, 

which we included in the report where appropriate. 

We appreciate the courtesies extended to our staff. For additional information on this report, 

please contact Glenn Furbish (glenn.furbish@sigir.mil/703-428-1058); or Walt Keays 

(walt.keays@iraq.centcom.mil.mil/703-343-7926). 

Stuart W. Bowen, Jr. 

Inspector General 
Table of Contents 

Introduction 1

Terminating Contracts 4

Aggregate Data on Contract Terminations Has Important Limitations 7 

Future Issues to Be Addressed Regarding Terminations 

for Convenience and Default 10 

Management Comments and Audit Response 11

Appendices 

A. Scope and Methodology 12 

B. Acronyms 14 

C. Management Comments 15 

D. MOU Between IRMO PCO-GRD, MNC-I, MNSTC-I, and USAID 21 

E. Audit Team Members 27 
Interim Report on Iraq Reconstruction Contract 

Terminations 

SIGIR-08-013 April 28, 2008

Introduction

Rebuilding Iraq is a U.S. national security and foreign policy priority, and constitutes the largest 

U.S. assistance program since World War II. Since the beginning of Iraq reconstruction 

activities in 2003, approximately $42.23 billion has been appropriated for Iraq reconstruction 

activities and, as of January 2008, approximately $35.30 billion of this amount has been 

obligated, much of it under contractual arrangements. 

The Special Inspector General for Iraq Reconstruction (SIGIR) has often been asked about 

problems in the U.S. reconstruction program, including the extent to which contracts have been 

terminated because of poor performance. Government contracts generally contain clauses 

allowing the U.S. government to end a contract when the need for the supplies or services no 

longer exists, the contractor’s performance becomes unsatisfactory, or some other situation 

develops that warrants closure. To address this issue, SIGIR assessed the availability of 

aggregate information on such contract actions involving Iraq reconstruction. This interim report 

provides an overview of the termination for convenience and default processes and available 

information regarding contract terminations. A follow-on review will provide additional insights 

on factors and circumstances related to such decisions for selected contracts and the reasons for 

ending them. 

Interim Results 

Although information on contract terminations is incomplete, available data show that 

approximately 855 Iraq reconstruction contracts–or task orders within individual contracts–have 

been terminated for the convenience of the U.S government or because of default on the part of 

the contractor.1

 This information comes from the Iraq Reconstruction Management System 

(IRMS), which as of March 20, 2008, contained information on 47,321 projects. IRMS was 

intended to be the repository and archive for storing all reconstruction and non-reconstruction 

project data from the various U.S. implementing agencies operating in Iraq. However, it does 

not provide a complete or consistent picture of reconstruction activities and contract changes 

because not all executing agencies use IRMS on a regular basis. 

A limitation of IRMS is that it does not contain complete information on projects done by the 

U.S. Agency for International Development (USAID) or the Department of State (DoS), projects 

completed before 2006, or projects funded by appropriations other than the Iraq Relief and 

Reconstruction Fund. Adding contract terminations from these sources would certainly raise the 

 

1

 In this report, we use the term contract to refer to both contracts and task orders. 

1
number of terminated projects. Nonetheless, our review found that contract termination data 

from the IRMS provides the most complete data available on contract terminations. Table 1 

shows the number of terminations identified in IRMS as of March 20, 2008. 

Table 1—Contract Terminations in the IRMS Database as of March 20, 2008 

DoD 

GRD JCC-I/A MNC-I AFCEE 

USAID DoS Total

Terminated for Convenience 145 402 128 68 0 0 743

Terminated for Default 87 14 11 0 0 0 112

Total Terminations 232 416 139 68 0 0 855

Acronym Key: (1) the U.S. Army Corps of Engineers Gulf Region Division (GRD), (2) the Joint Contracting CommandIraq/Afghanistan (JCC-I/A), (3) the Multi-National Corp-Iraq (MNC-I), (4) the Air Force Center for Engineering and the 

Environment (AFCEE), (5) the U.S. Agency for International Development (USAID), and (6) the U.S. Department of State (DoS) 

It is important to note that contracts that incur problems are sometimes modified to change or 

reduce the scope of work to be performed, rather than terminated. This practice is referred to as 

descoping, and in some cases is effectively a partial termination. When applied to contracts with 

problems, it has the effect of ending the contract without the need to terminate for convenience 

or default. SIGIR’s work has identified numerous instances in which contract modifications are 

used to reduce contract work, but data are not available that show the frequency of these actions. 

Descoping is an appropriate process but does mask problem projects to the extent they occur. 

Nevertheless, given the level of interest in the issue of contract terminations, SIGIR plans to 

conduct a follow-on review, relying to some extent on a series of case studies to examine more 

closely the basis for those decisions, the percentage of work completed at the time of termination 

for each contract, and the costs related to those actions. We will also address, in the next report, 

whether any of the defaulted contractors were awarded follow-on contracts and whether the 

contracting officers considered the contractor’s performance on prior contracts before awarding a 

new one. 

Background 

Since 2003, Congress has appropriated approximately $42.23 billion to four Iraq reconstruction 

funds: $20.91 billion to the Iraq Relief and Reconstruction Fund (IRRF); $15.44 billion to the 

Iraq Security Forces Fund (ISFF); $3.21 billion to the Economic Support Fund (ESF); and $2.66 

billion to the Commander’s Emergency Response Program (CERP). These four funds account 

for about 89 percent of all the money appropriated for Iraq reconstruction through January 2008. 

Table 2 shows the appropriations, as well as their obligations and expenditures, as of early 

January 2008. 

2
Table 2—U.S. Support for Iraq Reconstruction ($ billions) 

U.S. Fund Appropriated1 Obligated Expended 

IRRF $20.91 $20.06 $18.85 

ISFF 15.44 10.70 8.10 

ESF 3.21 2.38 0.61 

CERP 2.66 2.17 1.48 

Total $42.23 $35.30 $29.04 

1

 Total U.S. funds appropriated for Iraq reconstruction since 2003 is $47.48 billion. 

Note: Numbers are affected by rounding. 

Sources: IRRF 1 and 2: obligated and expended figures from Department of State, Iraq Weekly Status (1/3/2008). ISFF: 

obligated and expended figures from Corps of Engineers Financial Management System, ISFF Funds Execution Report 

(1/8/2008); Department of Defense, Secretary of the Army Update ((9/30/2007). CERP: obligated and expended figures all from 

Multi-National Corps-Iraq, response to SIGIR data call (1/4/2008). ESF: obligated and expended figures from Iraq Transition 

Assistance Office, response to SIGIR data call (1/4/2008). 

In seeking to support Iraq relief and reconstruction efforts, the U.S government has entered into 

numerous contracts for thousands of projects, involving both construction and non-construction 

activities. Since 2003, there have been multiple Department of Defense (DoD), DoS, and 

USAID organizations engaged in awarding reconstruction contracts for Iraq. Over time, 

contracting responsibilities have evolved and merged into a smaller number of organizations. 

Currently, six U.S. government organizations are primarily responsible for Iraq reconstruction 

contracts: four within DoD— the Corps of Engineers Gulf Region Division (GRD), the Joint 

Contracting Command-Iraq/Afghanistan (JCC-I/A), the Multi-National Corps-Iraq (MNC-I), and 

the Air Force Center for Engineering and the Environment (AFCEE); USAID; and DoS. 

Reconstruction projects have been undertaken in specific sectors of Iraqi governance and society, 

including security and law enforcement, justice and public safety, electric infrastructure, oil 

infrastructure, water and sanitation, transportation and telecommunications, health care, private 

sector development, and education. 

3
Terminating Contracts 

The government may end a contract when the need for the supplies or the services no longer 

exists, the contractor’s performance has become unsatisfactory, or some other situation develops 

that warrants ending the contract. In a war zone, these other situations could be changes in 

strategies or plans, unforeseen security conditions, or the inability of the government and the 

contractor to come to terms on the cost of the work to be performed, among other things. The 

Federal Acquisition Regulation (FAR), Part 49, contains the procedures for terminating 

contracts, and identifies two general types of contract terminations: those for convenience and 

those for default. It is important to note that, beyond terminations for convenience or default, 

contract modifications to change or reduce the scope of work to be performed are sometimes 

used to deal with contract problems or changing conditions or requirements. 

Terminations for Convenience 

The government has the right to cancel work under a contract whenever it determines that 

cancellation is in its best interest; that is, it can cancel at its convenience. This right to cancel 

work is one of the most unique provisions of government contracting, with no counterpart in 

common law contracting. The government needs no particular reason to terminate a contract for 

convenience other than “best interest.” Terminations can occur 

• when funds are not available for continued contract performance 

• there is no longer a need for the items or services under the contract 

• it is impossible to perform the contract, for example, when, the government created 

specifications that are impossible to fulfill 

When a change in requirements results in terminating the contract, the government must pay the 

contractor for the efforts it has expended in its behalf. By issuing a termination for convenience, 

the government limits its liability only to work completed at the time of termination. 

SIGIR has identified a number of examples where the government terminated contracts for 

convenience. Some examples are 

• GRD terminated task orders 4, 5, 9, 10 and 11 under its design-build contract with the 

Perini Corporation for the construction of electrical substations and other electrical 

infrastructure because it deemed Perini’s cost proposals for the work to be too high, and 

because it was dissatisfied with delays in executing the work on other task orders. (GRD 

contract W914NS-04-D-0011) 

• GRD terminated task orders 4 and 5 under its design-build contract with Flour/AMC 

Corporation for the construction of a water purification facility in Diwaniyah and Najaf 

because funds were not available. (GRD contract W914NS-04-D-0022) 

• GRD terminated contract W917BG-05-C-0068 with an Iraqi contractor for construction 

of a police station because the building was blown up prior to completion. 

4
• GRD terminated contract W917BK-05-P-0120 with the Torch Light Company for 

construction of classrooms at two schools because the contractor failed to make timely 

progress. 

• GRD terminated contract W91GXY-06-D-0003 with an Iraqi contractor for construction 

of power lines because the contractor was killed. 

Terminations for Default 

Terminations for default means the exercise of the government’s right to completely or partially 

terminate a contract because of the contractor’s actual or anticipated failure to perform its 

contractual obligations. Termination for default typically occur when the government believes a 

contractor has not fulfilled its obligation; thus a termination for default is generally the exercise 

of the government’s contractual right to terminate a contract or tasks within a contract because of 

the contractor’s actual or anticipated failure to perform its contractual obligations. Under a 

termination for default the government is not liable for the contractor’s costs on undelivered 

work and is entitled to the repayment of advance and progress payments, if any, applicable to 

that work. 

SIGIR’s work identified a number of examples where the government terminated contracts for 

default: 

• GRD terminated its firm-fixed price contract with Sima International for the construction 

of a school in Al Jaafer Mansure because the contractor failed to perform the work. 

(W917BG-05-A-0011) 

• GRD terminated task orders 7 and 8 under its design-build contract with Parsons 

Delaware, Inc. for the construction of jails and detention facilities because the contractor 

failed to make progress. (W914NS-04-D-0009) 

• GRD terminated contract W917BK-06-C-0014 with The New Millennium Company for 

road paving because the contractor failed to perform the work. 

• JCC-I/A terminated contracts W91GXY-06-C-0082 and W91GXY-06-C-0096 with an 

Iraqi contractor for electrical substation work because the contractor failed to perform the 

work. 

Contract Modifications 

Aside from officially terminating for convenience or default, contracting officers sometime 

modify contracts to reduce or eliminate contracted work. This is referred to as contract 

descoping. When applied to contracts with changing conditions or requirements, such as lack of 

funding or contract problems, it can have the effect of ending the contract (or task order) without 

the need to terminate for convenience or default. An example of this practice was the Basrah 

Children’s Hospital project. The hospital was a USAID project under its contract with Bechtel 

Corporation. USAID issued a job order to Bechtel to construct the hospital in August 2004, at an 

5
estimated cost of $50 million, and an estimated completion date of December 31, 2005.2

 In June 

2006, with the job order 18 months behind schedule, the job order was essentially terminated 

although the official contract action was a descoping of the project with the contract management 

turned over to the GRD. The January 2008 Section 2207 report3

 shows that USAID obligated 

$45.7 million on the project. The GRD assigned a new project number and they allocated an 

additional $41.1 million to the project. Consequently, IRMS does not list the USAID project as 

terminated; rather it identifies the hospital as a completed project. 

In technical comments on a draft of this report, USAID did not agree that the descoping of the 

Basrah Children’s Hospital project was effectively a contract termination. According to USAID, 

the project was stopped because the funds provided for the hospital were insufficient due to 

changes in scope of the project, differing site conditions, cost escalations, and security issues. 

SIGIR agrees that all of these factors affected the project. SIGIR’s point is that the IRMS system 

shows this as a completed project when in fact the hospital was only 35 percent complete when 

work was stopped. SIGIR believes this illustrates our point that in some cases unsuccessful 

construction projects are not terminated for convenience or default. Rather, the work is ended by 

contracting officers modifying contracts. 

In its technical comments, USAID also expressed concern that SIGIR was implying that 

contracting officers are hiding what should have been terminations for poor performance by 

using the descoping technique. SIGIR did not state nor intend to imply that contracting officers 

were engaging in any inappropriate activities. SIGIR is simply providing information that shows 

the actual practices that are used to manage contracts. 

 

2

 USAID sometimes uses job orders to carry out work under a contract. According to a USAID contracting officer, 

a job order is not a legal document; rather it is a letter or other written communication signed by the contracting 

officer authorizing the contractor to proceed to implement an identified project. 

3

 This report refers to the DoS’s quarterly report to the Congress on Iraq Relief and Reconstruction Projects. 

6
Aggregate Data on Contract Terminations Has 

Important Limitations 

The FAR details a number of actions that must be taken to document terminated contracts, 

including sending written notice to the contractor and maintaining a case file that includes 

memoranda and records of all actions relative to the settlement of the contract.4

 However, the 

FAR does not require that contracting agencies maintain a consolidated record of their 

termination actions. Consequently, the degree to which Iraq reconstruction agencies maintain 

such listings varies. IRMS is the primary database for tracking Iraq reconstruction projects, and 

it contains some data on terminations. Without a requirement to report contract terminations, 

however, IRMS data is also incomplete. 

The Iraq Reconstruction Management System 

IRMS was initiated by the Project and Contracting Office in mid-2004 and was intended to be 

the repository and archive for storing all reconstruction and non-reconstruction project data from 

the U.S. implementing agencies. IRMS was to communicate a consistent measurement of 

progress at the organizational and interagency levels. DoS is among the many agencies that 

contribute data into IRMS as agreed to in an inter-agency Memorandum of Understanding. 

Maintenance and administration of IRMS is performed by GRD. 

Our review of IRMS data found that it does not provide a complete or consistent picture of 

reconstruction activities. For example, the Memorandum of Understanding was not instituted 

until the end of 2005. At that time, data from prior years was brought into the system. However, 

the DoS acknowledges that information prior to 2006 is incomplete. Additional limitations of 

the system include the following: 

• Neither DoS nor USAID regularly enters project data into the IRMS database. DoS 

submitted some data over a year ago, and USAID submits data on a quarterly basis. As of 

March 2008, neither agency has reported a contract termination to IRMS. 

• IRMS does not contain complete information on contracts funded by the ISFF and the 

ESF. The Iraq Transition Assistance Office (ITAO) stated that it was never intended to 

track projects built with funds other than IRRF.5

 The limited data on non-IRRF funded 

projects in IRMS occurs because as other funding streams were appropriated, several 

agencies decided to use the system ad hoc and the data that were important to each 

agency were tracked according to the needs of that particular agency. 

• Contract terminations is a data field in IRMS under project status, but the implementing 

agencies are not required to use it. 

SIGIR also notes that, as of early January 2008, approximately $35.30 billion in IRRF, ISSF, 

ESF, and CERP funds were obligated. However, IRMS contains data on only $25.08 billion in 

projects, or 71 percent of the obligations as of January 2008. As a result, SIGIR intends to 

 

4

 FAR 49.102 Notice of Termination; and FAR 49.105-3, Termination Case File 

5

 ITAO, established in May 2007, is a temporary organization within DoS to facilitate reconstruction. 

7
review the extent that IRMS is providing a common operating picture of Iraq reconstruction 

projects and the system’s ability to provide current, accurate, and complete data.

Other Agency Systems 

In searching a number of data systems involving various U.S. activities in Iraq for contract 

termination information, SIGIR found the following: 

• USACE/GRD tracks project/contract information via a software package called the 

Resident Management System (RMS) and financial information through the Corps of 

Engineers Financial Management System (CEFMS). Although data from RMS and 

CEFMS are electronically updated in USACE/GRD project information in IRMS, the 

contract termination data found there do not agree with what is found in RMS. 

According to GRD officials, the data do not match because, until recently, the RMS 

software did not have a specific field that identified terminations for default. GRD stated 

that it is in the process of synchronizing the project termination data between the two 

systems. GRD officials also said that not all GRD projects are in RMS. For example, in 

cases in which JCC-I/A is the executing agent for GRD contracts, JCC-I/A enters the 

project information directly into IRMS, but not into RMS. 

• AFCEE manages most of the construction contracts for the Multi-National Security 

Transition Command–Iraq (MNSTC-I). According to AFCEE officials, it uses IRMS as 

its contract management information system. Because AFCEE enters its project data 

directly into IRMS the latter should accurately identify MNSTC-I’s terminations. 

However, AFCEE officials are uncertain if all project information prior to 2006 is in the 

IRMS database. 

• MNC-I enters information on its CERP projects into IRMS so contract termination on 

CERP projects should be complete. Similar to the other agencies, however, the accuracy 

of contract termination information prior to 2006 is uncertain. MNC-I currently is trying 

to ensure the completeness and integrity of its CERP data in IRMS. 

• JCC-I/A enters contract termination information into its own Joint Contingency 

Contracting System, which was developed in October 2006. Prior to that, data regarding 

contract termination identified only termination, not whether the contract was terminated 

for convenience or default. The Joint Contingency Contracting System does not 

electronically interface with IRMS, so JCC-I/A data is entered manually. 

• DoS officials reported that about 18 months ago, the department’s bureaus provided 

contract information to the Iraq Reconstruction Management Office (IRMO), now the 

ITAO for entry into IRMS, but have not provided any information since. In addition, 

when the protocols for IRMS data were established, contract termination information was 

not required, so it was not provided. Nonetheless, DoS officials in Washington, D.C. say 

they track contract termination information through their own systems. 

• USAID officials reported that it provides contract information to GRD for entry into 

IRMS on a quarterly basis. As with DoS, when the protocols for IRMS data were 

established, contract termination information was not required, and is thus not provided. 

8
Instead, USAID officials say, its Iraq Office of Acquisition and Assistance tracks contract 

termination information in a system called the USAID Iraq Data Base. 

Despite the limitations of the IRMS database, it still contains the most complete data available on 

contract termination. Table 3 shows the number of terminations identified in IRMS as of March 

20, 2008. Note that USAID and DoS have reported no contract terminations to IRMS. 

Table 3—Contract Terminations in the IRMS Database as of March 20, 2008 

DoD 

GRD JCC-I/A MNC-I AFCEE 

USAID DoS Total

Terminated for Convenience 145 402 128 68 0 0 743

Terminated for Default 87 14 11 0 0 0 112

Total Terminations 232 416 139 68 0 0 855

Source: IRMS Data Base, March 20, 2008 

9
Future Issues to Be Addressed Regarding 

Terminations for Convenience and Default 

Despite the data limitations noted above, the available data support the view of many 

experienced contracting professionals who believe that terminations for the convenience of the 

government are more typical than terminations for default. Likewise, SIGIR has observed that 

descoping and contract modifications are frequently used. According to a GRD official, 

descoping and modifying are usually less cumbersome, less time consuming, and less costly than 

terminations for convenience or default. Data to determine the magnitude of these actions are 

not readily available. However, SIGIR will continue to focus on this issue as part of our ongoing 

broader body of work examining individual selected contracts in Iraq. 

At the same time, given the level of interest in the issue of terminations for default and for 

convenience, we plan to conduct a follow-on review. It will rely to some extent on a series of 

case studies to examine more closely the basis for those decisions, the percentage of completions 

at the time of termination for each contract or task order, and the costs related to those actions. 

SIGIR will also address in our final report the questions of whether any of the defaulted 

contractors were awarded follow-on contracts and whether the contracting officers considered 

the contractor’s prior performance before awarding such a contract. 

10
Management Comments and Audit Response 

SIGIR received written comments on a draft of this interim report from GRD and ITAO. GRD 

said that the failure of IRMS to provide a complete picture of Iraq reconstruction derives from 

the fact that not all of the executing agencies use IRMS on a regular basis. GRD also stated that 

the failure of these agencies to routinely input data impacts the system’s ability to provide 

current and accurate information. 

ITAO disagreed that IRMS was ever intended to be a repository and archive for storing 

reconstruction and non-reconstruction data from the various U.S. implementing agencies 

operating in Iraq. However, the memorandum of understanding identified this as the purpose for 

the system. We have included a copy of the memorandum of understanding for IRMS in 

appendix D. Nonetheless, as stated in this report and GRD’s official comments, not all agencies 

input data to IRMS on a regular basis. See appendix C for complete text of the agencies’ 

comments. 

Both GRD and ITAO also provided technical comments which were incorporated into this report 

as appropriate. We also received technical comments from USAID which we included in this 

report where appropriate. 

11
Appendix A—Scope and Methodology 

This audit was performed under the authority of Public Law 108-106, as amended, which also 

incorporates the duties and responsibilities of inspectors general under the Inspector General Act 

of 1978. The original purpose of the audit was to determine the extent to which the U. S. 

government has terminated Iraq reconstruction contracts funded by IRRF, CERP, ISFF, or ESF 

for the convenience of the government or due to a default by the contractor. The audit also 

sought to determine the basis for the government’s decisions, the percentage of completion at the 

time of terminating each contract, and additional termination costs incurred by the government. 

Because of the multiple sources of data on contract terminations, as well as limitations SIGIR 

found in obtaining aggregate data, we decided to provide this interim report–focusing on 

available data on terminations–and follow it with a subsequent review to more fully assess facts 

and circumstances of termination decisions on a case-study basis. 

We reviewed relevant policies and procedures and held discussions with officials from DoD, 

USAID, and DoS to identify the policies and procedures in place for terminating contracts. We 

also interviewed selected contracting officers in Baghdad and Washington, DC. The work was 

done at USAID, DoS, and DoD offices in the Washington, DC, area; and in Baghdad at the GRD 

Annex building, USAID offices, and the U.S. Embassy Annex. 

Use of Computer-Processed Data 

To perform this audit, we used data that originated in CEFMS, RMS, IRMS, USAID Iraq 

database, Joint Contingency Contracting System, and DoS accounting system. To achieve the 

assignment’s objective, we examined computer-processed data contained in the above databases. 

Our review of system controls casts doubt on the data’s completeness and accuracy. For 

purposes of this review, we relied primarily on the IRMS data system because we found that it 

contained the most complete data on contract terminations. SIGIR identified a number of 

concerns about the accuracy and completeness of the data system. These concerns are discussed 

in the report as well as the limitations to the relevance and usefulness of the data. 

We also reviewed applicable reports issued by SIGIR. 

• “Management of Iraq Relief and Reconstruction Fund Program The Evolution of the Iraq 

Reconstruction Management System,” (SIGIR-06-001), April 2006. 

• “Review of Bechtel’s Spending Under Its Phase II Iraq Reconstruction Contract,”

(SIGIR-07-009), July 2007. 

• “Outcome, Cost and Oversight of Iraq Reconstruction Contract W914NS-04-D-0006”, 

(SIGIR-08-010), January 2008. 

• “Fact Sheet on the Use of the $50 Million Appropriation to Support the Management and 

Reporting of the Iraq Relief and Reconstruction Fund”, (SIGIR-05-026), January 27, 

2006. 

SIGIR’s review was conducted between November 2007 and March 2008, in accordance with 

generally accepted government-auditing standards. They require that we plan and perform the 

12
audit to obtain sufficient, appropriate evidence to provide a reasonable basis for information 

presented based on our objectives. Our assessment was constrained by incomplete aggregate 

data regarding contract terminations. Despite these data limitations, we believe that the evidence 

obtained provides a reasonable basis for identifying the relative magnitude of contract 

terminations in Iraq reconstruction contracting. Based on data limitations and SIGIR’s plan for 

more detailed case study assessments of individual decisions, this report does not present any 

conclusions or recommendations. 

13
Appendix B—Acronyms 

AFCEE Air Force Center for Engineering and the Environment 

CEFMS Corps of Engineers Financial Management System 

CERP Commander’s Emergency Response Program 

DoD Department of Defense 

DoS Department of State 

ESF Economic Support Fund 

FAR Federal Acquisition Regulation 

GRD Gulf Region Division 

IRMO Iraq Reconstruction Management Office 

IRMS Iraq Reconstruction Management System 

IRRF Iraq Relief and Reconstruction Fund 

ISFF Iraq Security Forces Fund 

ITAO Iraq Transition Assistance Office 

JCC-I/A Joint Contracting Command – Iraq/Afghanistan 

MNC-I Multi-National Corps – Iraq 

MNSTC-I Multi-National Security Transition Command – Iraq 

RMS Resident Management System 

SIGIR Special Inspector General for Iraq Reconstruction 

USACE U.S. Army Corps of Engineers 

USAID U.S. Agency for International Development 

14
Appendix C—Management Comments 

U.S. Army Corps of Engineers - GRD 

15
16
17
Management Comments 

Iraq Transition Assistance Office 

18
19
20
Appendix D—Memorandum of Understanding 

Between IRMO PCO-GRD, MNC-I, MNSTC-I, and 

USAID 

21
22
23
24
25
26
Appendix E—Audit Team Members 

This report was prepared, and the review conducted under the direction of David R. Warren, 

Assistant Inspector General for Audit, Office of the Special Inspector General for Iraq 

Reconstruction. The staff members who contributed include: 

Shawn Kline 

Richard McVay 

Dan Haigler 

Ziad Buhaissi

27
SIGIR’s Mission Regarding the U.S. reconstruction plans, programs, and 

operations in Iraq, the Special Inspector General for Iraq 

Reconstruction provides independent and objective: 

• oversight and review through comprehensive audits, 

inspections, and investigations 

• advice and recommendations on policies to promote 

economy, efficiency, and effectiveness 

• deterrence of malfeasance through the prevention and 

detection of fraud, waste, and abuse 

• information and analysis to the Secretary of State, the 

Secretary of Defense, the Congress, and the 

American people through Quarterly Reports 

Obtaining Copies of SIGIR 

Reports and Testimonies 

To obtain copies of SIGIR documents at no cost, go to 

SIGIR’s Web site (www.sigir.mil). 

To Report Fraud, Waste, 

and Abuse in Iraq Relief 

and Reconstruction 

Programs 

Help prevent fraud, waste, and abuse by reporting 

suspicious or illegal activities to the SIGIR Hotline: 

• Web: www.sigir.mil/submit_fraud.html 

• Phone: 703-602-4063 

• Toll Free: 866-301-2003 

Congressional Affairs Hillel Weinberg 

Assistant Inspector General for Congressional 

 Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-604-0368 

Email: hillel.weinberg@sigir.mil 

Public Affairs Kristine Belisle 

Assistant Inspector General for Public Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-428-1217 

Fax: 703-428-0818 

Email: PublicAffairs@sigir.mil 

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