SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

400 Army Navy Drive • Arlington, Virginia 22202

April 4, 2006 

MEMORANDUM FOR DIRECTOR, IRAQ RECONSTRUCTION MANAGEMENT OFFICE 

 COMMANDING GENERAL, JOINT CONTRACTING COMMANDIRAQ/AFGHANISTAN 

COMMANDING GENERAL, GULF REGION DIVISION, 

U.S. ARMY CORPS OF ENGINEERS 

SUBJECT: Interim Audit Report on the Review of the Equipment Purchased for 

 Primary Healthcare Centers Associated with Parsons Global Services, 

 Contract Number W914NS-04-D-0006 

 (SIGIR-06-016) 

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

in accordance with our statutory duties contained in Public Law 108-106, as amended, which 

requires that we provide for the independent and objective conduct of audits, as well as 

leadership and coordination of, and recommendations on, policies designed to promote economy, 

efficiency, and effectiveness in the administration of such programs and operations and to 

prevent and detect waste, fraud, and abuse. 

This interim audit report is provided to alert management to concerns we noted on the 

accountability for and utilization of the $70 million of medical equipment procured by Parsons 

Global Services, Inc. (Parsons) for the Primary Healthcare Centers (PHC) construction project. 

We are reporting these concerns in an interim report in order to provide management timely 

information and the opportunity to take corrective actions to reduce the risk of accountability 

shortfalls and ineffective use of the procured medical equipment because certain events may 

occur before our final report is issued. 

Objectives. Our overall audit objectives are to determine whether medical equipment acquired 

by Parsons is properly accounted for and to identify the impact of descoping the PHCs contract 

on the medical equipment. 

Background. The contract required Parsons to procure 151 medical equipment sets to equip150 

healthcare centers that Parsons was to build, and to equip one medical Teaching Academy 

(which was to be constructed by other than Parsons). The cost of this equipment was 

approximately $70 million. However, the construction part of the contract was descoped by 9 

PHCs in September 2005, and then further descoped by an additional 121 PHCs on March 6, 

2006, leaving only 20 centers to be completed by Parsons. In addition, the Teaching Academy 

was never constructed. Unfortunately, due to the timing of the descoping of the construction, the 

number of medical equipment sets Parsons was to procure was not descoped and Parsons has 

already procured and plans to deliver all 151 medical equipment sets to the U.S. government by 

the end of April 2006. This will leave the U.S. government with a total of 131 medical 

equipment sets more than required to equip the 20 PHCs currently completed or expected to be 

completed within the next 30 days. For the configuration of the medical equipment sets, see 

Appendix A.
2

Planning for Equipment Acceptance, Storage, and Use 

There is no formal written plan as to what specifically will be done with the 131 excess medical 

equipment sets to be delivered by Parsons in April 2006. In our discussions with Joint 

Contracting Command-Iraq/Afghanistan (JCC-I/A), Gulf Region Division-Project and 

Contracting Office (GRD-PCO), and Iraq Reconstruction Management Office (IRMO) 

representatives responsible for equipment acceptance, storage, and usage we received 

contradictory information as to where the excess medical equipment would be delivered and 

stored and how the equipment would be turned over to the U.S. government. We also found 

differences in number of equipment sets that Parsons planned to deliver and what GRD-PCO 

expected would be delivered to specific storage locations. In the course of our audit we brought 

many of these discrepancies to light and received verbal confirmation that the equipment 

acceptance and storage issues were being worked with all concerned and would be fully 

coordinated and implemented to ensure accountability and effective utilization. Personnel with 

each of the US government activities involved (IRMO, JCC-I/A, and GRD-PCO) are doing their 

best within their respective lanes of responsibility/authority to address the issues. However, 

without an overall coordinated plan on how the medical equipment will be accepted, stored, 

secured and used, there is no assurance that individual plans will succeed in providing effective 

and efficient accountability and use of the medical equipment sets. IRMO, as the direct liaison 

to the Iraqi government, should take the lead in developing and coordinating a formal plan for 

the overall storage and use of the medical equipment sets. Some specific concerns we have with 

the current plans for accountability and use of the medical equipment sets are addressed below. 

• Government Acceptance of Equipment from Parsons. Parsons representatives advised us 

that it expects to deliver medical equipment sets to an Iraq Ministry of Health warehouse 

located in Erbil, Iraq in several shipments and that when each shipment gets to the warehouse 

a representative at the warehouse will inventory and sign for the equipment. When this is 

accomplished, Parsons representatives told us that it will have complied with its contract 

requirements for equipment delivery. However, we were also told that a U.S. government 

representative may not be at the Iraq Ministry of Health warehouse when the shipments 

arrive. The U.S. government representative from GRD-PCO responsible for acceptance of 

the equipment advised us that he plans to make one trip to the warehouse to conduct an 

inventory when all the equipment has arrived and at that time formally accept on behalf of 

the US government the equipment from Parsons. Under this scenario a problem may occur if 

the US government representative inventories the equipment after delivery and count 

discrepancies are noted. Placement of responsibility for any count discrepancies on Parsons 

may not be possible because the chain of accountability custody between Parsons and the 

U.S. government was broken during the time the equipment was stored in the Iraq Ministry 

of Health warehouse before the U.S. government formally inventoried and accepted the 

equipment. 

• Storage of Equipment in Iraq Warehouse. We believe that the U.S. government may not 

be in a position to assure that the delivered medical equipment sets are properly protected 

and accounted for while stored in an Iraq Ministry of Health warehouse because of the 

current political and security uncertainties in Iraq. Additionally, in our discussions with the 

US government Senior Health Advisor, we were told that the U.S. government plans to 

complete construction of the remaining centers, in part, using Commanders Emergency 

Response Program (CERP) funds. These CERP funds will only be made available for the 

remaining construction of the PHCs if IRMO can provide assurance that equipment for the 

centers will be available when the PHCs are completed. Prior to storage of the medical 
3

equipment in an Iraq Ministry of Health warehouse, we suggest that a formal evaluation (risk 

analysis) be made and documented as to the alternatives and probable risk of storing medical 

equipment sets in an Iraq government controlled warehouse over what may be an extended 

period of time. A final decision on where to store the medical equipment sets should be 

made based on results of this evaluation. 

This interim report is provided for management’s use and appropriate action, and is consistent 

with the information provided at our meetings held on March 30, 2006, with GRD-PCO; and 

April 4, 2006, with IRMO, which was attended by the Senior Advisor to the Ministry of Health. 

No response to this interim report is required, but we will follow-up on the concerns raised in 

this report and management actions in response to these concerns as we continue our audit. 

We appreciate the courtesies extended to the staff. For additional information on this interim 

report, please contact Mr. Joseph T. (Mickey) McDermott at (703) 604-0982, or by email at 

joseph.mcdermott@sigir.mil; or Mr. Frank W. Slayton (914) 360-9371, or by email at 

Frank.Slayton@iraq.centcom.mil. 

Stuart W. Bowen, Jr. 

Inspector General 
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Appendix A. Standard Medical Equipment Sets 

Description of Medical Equipment Quantity per center (Note 1) 

Automatic X-ray Film Processor 1 each A & C centers 

Hydraulic Dental Chair with work station 2 each all centers 

X-ray Simple Bucky 1 each A & C centers 

ECG Machine 1 each all centers 

Hot Air Sterilizer 1 each all centers 

Adult wt. Scale 1 each all centers 

Autoclave 1 each C centers 

Bilirubinmeter 1 each all centers 

Centrifuge 2 each all centers 

Hemoglobin meter 2 each all centers 

Infant wt. scale 1 each A & B, 2 each C centers 

Micro Centrifuge w ruler 1 each all centers 

Microscope 2 each all centers 

Spectrophotometer 1 each all centers 

Diagnostic set 6 each A & B, 5 each C centers 

Laboratory incubator 1 each B centers 

Digital radiology 1 each B centers 

Ultrasound 1 each C centers 

Defibrillator 1 each C centers 

Infant Incubator 1 each C centers 

Infant Resuscitation Unit 1 each C centers 

IV Infusion Pump 2 each C centers 

Obstetric Birthing Beds 3 each C centers 

Resuscitation case 1 each C centers 

Fetal Doppler 1 each A & B, 2 each C centers 

Suction Unit 3 each C centers 

Dental X-ray film processor 1 each A & C centers 

Digital precision balance 1 each all centers 

Analog intra oral x-ray 1 each A & C centers 

Digital intra oral x-ray 1 each B centers 

Laboratory Refrigerator 1 each all centers 

Water distillatory 1 each all centers 

X-ray barrier 2 each all centers 

X-ray viewer 6 each all centers 

GYN exam table 1 each A & B, 2 each C centers 

Patient Bed 11 each C centers 

Portable infant incubator 1 each C centers 

Laboratory incubator 1 each A & C centers 

Mechanical Cell counter 1 each all centers 

Artery Forceps 4 each all centers 
5

Description of Medical Equipment Quantity per center (Note 1) 

Bone Cutter 2 each all centers 

Bone File 2 each all centers 

Carver 6 each all centers 

Cement slab-spatula 2 each all centers 

Chlorine Meter 1 each all centers 

Dental syringe 4 each all centers 

ESR Rack 5 each all centers 

Examination tools of dentist - mirror 12 each all centers 

Examination tools of dentist - tweezers 12 each all centers 

Examination tools of dentist - Probe 12 each all centers 

Dental excavator 12 each all centers 

Forceps 2 each all centers 

Root forceps set 4 each all centers 

Glucometer 2 each all centers 

Hand instruments 4 each all centers 

Matrix band 4 each all centers 

Matrix retainer 4 each all centers 

Nebulizer - manual 1each all centers 

Nebulizer - electronic 2 each all centers 

Pipette 4 each all centers 

Plugger 6 each all centers 

Root elevator 8 each all centers 

Scissors 2 each all centers 

Dressing Drums 6 each A & B, 10 each C centers 

I.V. Stand 8 each C centers 

Kidney shape tray 12 each C centers 

Surgical instrument sets 4 each C centers 

Surgical instrument sets - Sim's speculum 1 each A & B, 3 each C centers 

Surgical instrument sets - Episiotomy 2 each C centers 

Burs 4 each all centers 

Vision testing chart 1 each all centers 

Dental retractor 2 each all centers 

Slide drier 1 each all centers 

Stethoscope - newborn 1 each A & B, 3 each C centers 

Shaking water bath 1 each all centers 

Stretchers 3 each C centers 

Wheelchair 2 each A & B, 3 each C centers 

Examination Couch 10 each A & B, 7 each C centers 

Blood drawing chair 1 each all centers 

Chart - height, weight, age 1 set of 4 charts each all centers 

Mobile patient side lamp 6 each A & B, 7 each C centers 

Stethoscope 6 each A & B, 3 each C centers 

Digital thermometer 6 each A & B, 3 each C centers 

Tuning fork set 1 each all centers 

Dressing Cart 2 each A & B, 6 each C centers 
6

Description of Medical Equipment Quantity per center (Note 1) 

Amalgam carrier 4 each all centers 

Amalgamator 2 each all centers 

Surgical curette 2 each all centers 

Surgical scalpel holder 2 each all centers 

Amniotomy tool 2 each C centers 

Metal bowl for obstetric use with stand 2 each C centers 

Couscous Speculium 1 each A & B, 3 each C centers 

Sphygmomanometer 6 each A & B, 3 each C centers 

 

Note 1 - There are three types of centers to which equipment sets will be distributed:

A Type Center - Standard medical center 

B Type Center - Medical center with teaching facilities 

C Type Center - Medical center with emergency and labor facilities