Special Inspector General 

for Iraq Reconstruction

Iraq Reconstruction

Lessons in Contracting 

and Procurement

[July 2006

2

]

JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 

Table of Contents

Preface

overview

Scope • Report Structure

The Pre-ORHA Period 

(Summer 2002 to January 2003)—Closed

Reconstruction Planning

Department of Defense: The Decision to Use LOGCAP • 

LOGCAP’s Focus Expands • LOGCAP Used for Contingency 

Planning in the Oil Sector • U.S. Agency for International 

Development: Initial Planning • U.S. Department of State: 

Minimal Initial Role in Contracting

ORHA and The Early-CPA Period

(January to August 2003)

— Contracting focuses on Humanitarian Needs

and Essential Services

USACE: Task Force Restore Iraqi Oil • ORHA: WashingtonBased Contracting Support • ORHA: In-Country Contracting 

Support • ORHA Develops a Contract Review Process • 

The Creation of CPA • DoD Tasks Army as Executive Agent 

for ORHA • Development Fund for Iraq: Key Source for CPA 

Contracts • U.S. Appropriated Funds Designated for Reconstruction • USAID: Grants, Cooperative Agreements, and 

Contracts • U.S. Department of State: DynCorp Contract

9

10

14

18
 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The later CPA Period 

(August 2003 to June 2004)

—Contracting Emphasis Shifts to Large-scale 

Reconstruction

HCA Activities Continue • U.S. Army Corps of Engineers: 

Oil and Electricity Contracts • Planning Begins for IRRF 2 • 

Details of IRRF 2 • PMO Operational Funding and HCA Staffing • CPA Develops a Spend Plan for IRRF 2 • Administrative and Funding Bottlenecks • DoD Sends an Acquisition 

Assessment Team to Iraq • CPA Head of Contracting Activity 

Initiatives • PMO Turns to the Air Force Center for Environmental Excellence • CPA/DoD IRRF 2 Contracting Award 

Process • More on Design-Build Contracts • From PMO to 

PCO • USAID’s Contracting Role in the CPA/IRRF 2 Period • 

DoS Re-competes the DynCorp Contract • The End of CPA

Post-CPA Contracting Developments

(June 2004 to the Present)—Shift from designbuild to direct contracting

Problem Areas during the CPA/Embassy Transition • Human 

Resource Issues • DFI Funds and Accelerated Iraqi Reconstruction Program • DFI Transfers to the Ministry of Finance 

• Slow Contracting Process: Security and Lack of Information • Shift in Project Emphasis and Contracting Strategy • 

Further Changes in Strategy and Structure • The Creation of 

the Joint Contracting Command-Iraq • USAID in the Post-CPA 

Contracting Environment

34

68
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 

special Contracting Programs: 

CERP and CHRRP

 (June 2003-Present)

—Balancing Rapid Response with Regulation

Commander’s Emergency Response Program • CERP Goes 

into Operation • Funding for CERP • Regulations and 

Responsibilities • Commanders Humanitarian Relief and 

Reconstruction Program 

Lessons in Contracting

from Iraq Reconstruction

Recommendations

Appendix A:

Requested Changes to the 

Federal Acquisition Regulation

Appendix B:

Trends in the Acquisition Workforce

Workforce Trends: Skills and Numbers • Skills and Numbers­: 

Effect in Iraq

102

81

94

97

107
 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Appendix C:

Recent Developments in Contracting for

Contingencies/Emergencies

Joint Policy on Contingency Contracting • Contractors on the 

Battlefield • Contracting Guides

Appendix D: 

Organizational Vetting Comments

Endnotes

Biographies:

forum participants

110

114

134

116
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 
 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 

Preface

This is the second of three reports in SIGIR’s Lessons Learned Initiative (LLI). Begun in September 2004, the LLI focuses on three areas 

of the U.S. relief and reconstruction effort in Iraq:

• human capital management

• contracting and procurement

• program and project management

SIGIR’s review of each area includes thorough background 

research and extensive interviews with a broad spectrum of persons 

possessing first-hand experience in the Iraq reconstruction program. 

The collected findings from this research are then provided to a 

panel of senior executives and experts drawn from the U.S. government, industry, and academia, many of whom served in Iraq. These 

experts convene for a full-day forum to evaluate the findings and 

provide recommendations. 

The first LLI Report, Iraq Reconstruction: Lessons in Human Capital Management, was released in January 2006. SIGIR will publish 

the third and final paper in this series, Iraq Reconstruction: Lessons 

in Program and Project Management, in the fall of 2006. 

This report provides a chronological review of the U.S. government’s contracting and procurement experience during the Iraq 

relief and reconstruction program. It begins by examining contracting activity early in the Iraq program and traces its evolutionary 

development through the effort’s succeeding phases. The concluding 

section lays out a series of key lessons learned followed by six 

recommendations for improving the U.S. government’s capacity to 

support and execute contracting and procurement in contingency 

environments.1
10 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Overview 

The success of any post-conflict reconstruction effort depends in 

great part upon effectively employing the U.S. government’s capacity 

to deploy efficiently and rapidly the means of relief and reconstruction: services, materials, and their supporting systems. This requires 

extant governmental contracting and procurement processes that are 

well structured and optimized for use in contingency situations. As 

this report reveals, the U.S. government was not systemically wellpoised to provide the kind of contracting and procurement support 

needed at the time of the 2003 invasion of Iraq.

Pre-war relief and reconstruction planning for the Iraq endeavor 

focused chiefly on preparing for humanitarian assistance and the 

restoration of essential services. The contracting and procurement 

efforts during that phase reflected this focus. After combat operations ceased in April 2003 and the Iraqi government collapsed, the 

shape of these efforts began to shift. The U.S. discovered that Iraq’s 

infrastructure was in far worse condition than some pre-war assessments had indicated. With that recognition came the realization 

that reconstruction requirements in Iraq would be far greater than 

originally anticipated. 

The U.S. government responded to this challenge by appropriating more than $20 billion in grants to assist the Iraqi people in reviving their infrastructure and economy. These grants, together with 

several billion dollars in Iraqi funds, served as the primary source 

for financing the U.S. relief and reconstruction program. The effort 

engaged multiple U.S. government agencies possessing overlapping 

jurisdictions and diverse capacities. These agencies applied a variety 

of approaches to similar contracting and procurement requirements, 

resulting in methodologies and outcomes that occasionally came 

into conflict. As a general matter, however, the contracting and pro-
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 11

curement effort in Iraq substantially improved over the course of the 

Iraq relief and reconstruction program. 

Scope 

SIGIR defines contracting and procurement as all activities ranging 

from developing reconstruction contracting plans and requirements, 

to soliciting and awarding contracts, to issuing task orders under 

these contracts. SIGIR will assess the execution of the reconstruction 

program in its next Lessons Learned report, Iraq Reconstruction: 

Lessons in Program and Project Management. 

Report Structure

To review and evaluate the contracting and procurement processes 

that supported the relief and reconstruction program in Iraq, SIGIR 

divides this report into four chronological periods and one functional concept area:

• Summer 2002 to January 2003: The Pre-ORHA Period

• January 2003 to August 2003: The ORHA and Early-CPA Period

• August 2003 to June 2004: The Later CPA Period

• June 2004 to present: The Post-CPA Period

• June 2003 to present: CERP and CHRRP 

The report tracks the evolution of reconstruction contracting 

and procurement through these periods, reviewing within each the 

planning processes, funding allocations, legal issues, and agency 

responsibilities. Figure 1 presents the timeline of U.S. contracting 

and procurement activity in Iraq, indicating the funding points and 

functional life-spans of various U.S. contracting authorities. 
12 

I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

IRAQ RECONSTRUCTIONContracting and Procurement Timeline

Interagency planning

(coordinated by 

NSC/OMB)

Up to $180M 

in IRRF 2 funding 

allocated for CERP

CHRRP received $86M from USG and $136M from IIG

Up to $718 M allocated for CERP

CERP created via FRAGO 89

IRRF 1

IRRF 2

DFI

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6

DFI Created underUN Res. 1483

Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr Jul Jan Oct

IRRF 1Established under P.L. 108-11$2.475B

IRRF 2Established underP.L. 108-106 $18.649B

IRMO announcesshift in IRRF 2 funding

IRMO announces furthershifts in IRRF 2 funding(which continue thereafter)

PRE-WAR, ORHA AND EARLY CPA C PA

11/6 9/14

5/22 6/28

4/16

IRMO/ U.S. Mission

3/2005

6/19 11/6 5/11 7/04

Fall 02 – Early 03

1/5

Funding StreamsMajor Contracting Authorities and Events

1/2006

Remaining DFI funds are transferredto Iraqis. U.S. continues to administeroutstanding DFI contracts

CPA presents rst 2207 spend plan to Congress for IRRF 2

Limited use of DoD O&Mfunds for CERP approved

CERP, CHRRP
JULY 2006

I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTIONI 

13

Figure 1

Up to $180M 

in IRRF 2 funding 

allocated for CERP

CHRRP received $86M from USG and $136M from IIG

Up to $718 M allocated for CERP

CERP created via FRAGO 89

USAID starts contracting for reconstruction and humanitarian needs

DCC-W & DCMA provide contracting assistance to ORHA/CPA

2/03USACE named Exec. Agent for Oil Restoration

Army tasked to provide acquisition and program management support to CPA

12/5/03Dep. Secretary of Defense memo limitscompetition for IRRF 2

USACE-GRD activated

National Security Presidential Directive 36 creates PCO/IRMO

PCO and IRMOstand up

CFC FRAGO 09-668 starts operation of JCC-I

PCO integrates with USACE-GRD

HCA Oce

PMO

PCO, JCC-1

2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6

Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr Jul Jan Oct

6/19 11/6 5/11 7/04

6/21 5/11

8/04

1/25

1/14

First HCA arrives in Iraq

Army named Exec. Agent for CPA

ORHA 6/28 11/12 12/4 2–6/03 1/16

CPA creates PMO

Major Contracting Authorities and Events

5/11

1/2006

Limited use of DoD O&Mfunds for CERP approved

CERP, CHRRP
14 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The Pre-ORHA Period 

(Summer 2002 to January 2003)

—Closed Reconstruction Planning

During this period, U.S. agencies were separately directed to initiate planning for relief and reconstruction activities in Iraq; but there 

was limited coordination of contracting and procurement among 

these organizations. This lack of coordination in early planning was 

attributable, in part, to the fact that much of the activity was classified. Planning did not become predominately unclassified until the 

creation of the Office of Reconstruction and Humanitarian Assistance (ORHA) in January 2003.2

 

Department of Defense: 

The Decision to Use LOGCAP 

The U.S. Department of Defense (DoD) chose to employ the Logistics Civil Augmentation Program (LOGCAP) as the chief vehicle 

for executing its initial contracting for Iraq reconstruction. This 

Army-administered program, originally created in 1985, requires 

“peacetime planning for the use of civilian contractors in wartime 

and other contingencies.”3 

To meet LOGCAP’s goal, contractors must produce4:

• A worldwide plan for providing vital support, such as logistical, 

engineering, and construction services, to U.S. forces deployed 

for war or contingency operations.

• Multiple contingency plans targeted at countries in areas of 

potential conflict.

• Operational capacities to support simultaneously up to three 

major contingency operations. 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 15

LOGCAP’s Focus Expands

The original LOGCAP program permitted various Army commands 

to award support contracts independently. In 1992, the Department 

of the Army converted LOGCAP into an umbrella support contract 

with a single worldwide provider. In 2001, the latest iteration of the 

contract, LOGCAP III, was awarded to Kellogg, Brown & Root Services, Inc. (KBR), a subsidiary of Halliburton, Inc., with a one-year 

base period and nine one-year options. LOGCAP III requires “support to most events deemed in the national interest, with approval 

of [the Department of the Army].” 5 According to a Government 

Accountability Office (GAO) report, the use of LOGCAP to support 

U.S. troops in Iraq was the largest effort undertaken in the program’s 

history.6

LOGCAP Used for Contingency Planning 

in the Oil Sector

In late summer 2002, the National Security Council’s (NSC) Deputies’ Committee identified requirements for the potential post-war 

recovery and repair of Iraq’s oil infrastructure. The Deputies’ Committee developed options for maintaining the security of Iraq’s oil 

sector to pre-empt its destruction.7 DoD and U.S. Central Command 

(CENTCOM) leadership concurrently engaged in similar planning 

on these issues. All of these planning sessions, and the subsequent 

contracting actions stemming from them, were classified.8

Pursuant to the NSC’s directives, DoD established the Energy 

Infrastructure Planning Group (EIPG) to prepare contingency plans 

for Iraq’s oil sector. Because the U.S. government lacked the necessary knowledge and expertise to develop oil infrastructure contingency plans, the EIPG sought private sector assistance.9

 

Faced with a December 2002 deadline for delivery of the draft oil 

sector contingency plan, the EIPG requested that the Department of 
16 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

the Army issue a task order under LOGCAP III to KBR to develop 

an Iraq oil sector contingency plan.10 KBR had an existing relationship with CENTCOM, possessed the necessary security clearances, 

and was familiar with CENTCOM’s technical and operational 

warplans into which the Iraq oil sector contingency plans would be 

integrated.11

Before issuing the task order, DoD contracting authorities 

analyzed whether LOGCAP III was the appropriate vehicle for the 

oil sector contingency contract. Under LOGCAP III, the military 

cannot award a contract to improve another country’s infrastructure, 

but it can issue task orders to support military contingency operations.12 The Secretary of Defense had ordered CENTCOM to develop 

plans to secure and maintain operation of Iraq’s oil infrastructure in 

the event of hostilities. DoD contracting authorities thus determined 

that protecting Iraq’s oil infrastructure was an essential element of 

coalition military operations, and it was therefore deemed proper to 

use LOGCAP III as the contingency contracting vehicle for the oil 

sector. 

A legal opinion provided by DoD’s Office of General Counsel 

substantiated this view. However, a subsequent GAO review concluded that the task order was beyond the scope of LOGCAP III. 

GAO found that the Army Field Support Command (AFSC) should 

have provided a written justification to authorize the award of the 

work to KBR without competition.13

In November 2002, the AFSC executed the first formal DoD contracting action related to Iraq reconstruction, awarding a LOGCAP 

III task order to KBR to develop contingency plans for the repair and 

operation of Iraq’s oil infrastructure (should it be destroyed or damaged). The value of this initial task order was small ($1.9 million) 

compared to its eventual impact. In March 2003, before the commencement of hostilities, KBR was awarded a sole-source indefinite 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 17

delivery/indefinite quantity (IDIQ) cost-plus contract, with a ceiling 

of $7 billion, to restore Iraq’s oil infrastructure. See infra p. 19. This 

award was based in part on KBR’s work on the initial oil sector contingency plan. During FY 2003, $1.4 billion was obligated under this 

contract as part this effort, designated Task Force Restore Iraqi Oil 

(RIO) and managed by the U.S. Army Corps of Engineers.14 

U.S. Agency for International Development: 

Initial Planning 

USAID’s pre-war planning process began in September 2002 with 

the assignment of a USAID staff member to the Humanitarian/

Reconstruction Planning team, one of several interagency teams 

organized to develop contingency plans in support of the intervention in Iraq.15 The Humanitarian/Reconstruction Planning team 

“was convened to develop a baseline assessment of conditions in 

Iraq and to define sector-by-sector relief and reconstruction plans.”16

The team tasked USAID to undertake planning for “non-oil-related 

capital construction, seaport and airport administration, local 

governance, economic development, education, and public health.”17 

USAID also created its own Iraq reconstruction planning taskforce, 

which included program staff, members of USAID’s Office of Acquisition and Assistance, and USAID Inspector General personnel. 

USAID’s Humanitarian Relief Planning

In the fall of 2002, USAID’s Office of Foreign Disaster Assistance 

(OFDA), which includes the Disaster Assistance Response Team 

(DART), and the Office of Transition Initiatives (OTI) began preparing for a possible post-conflict humanitarian disaster in Iraq. By 

February 2003, OFDA had committed $26.5 million in preparation 

for Iraq relief activities using International Disaster Assistance (IDA) 

funds, “for the purchase and pre-positioning of non-food relief com-
18 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

modities, and for assistance to UN agencies and NGOs [non-governmental organizations].” USAID provided these funds to the UN 

agencies and NGOs to support contingency planning and coordination efforts among various organizations that would be involved in 

Iraq relief and reconstruction efforts.18 

U.S. Department of State: 

Minimal Initial Role in Contracting

There was limited DoS involvement in Iraq contracting and procurement until June 2004, when DoS/Chief of Mission replaced CPA/

DoD as the lead U.S. agency in Iraq reconstruction. Prior to assuming leadership, DoS’s only major contracting event was the award of 

a police training contract to DynCorp. See infra p. 33. 

ORHA and Early-CPA (January to 

August 2003)—contracting FOCuses

on Humanitarian Needs and Essential 

Services

The Department of Defense created ORHA in late January 2003 to 

manage reconstruction and humanitarian activities in post-conflict 

Iraq. Although administratively assigned to DoD’s Washington 

Headquarters Services, ORHA took policy direction from the Under 

Secretary of Defense for Policy. 

ORHA was organized according to three pillars of responsibility: 

humanitarian assistance, reconstruction, and civil administration. 

Retired Lt. General Jay Garner (USA) was appointed ORHA’s director. Upon his appointment, Lt. General Garner immediately ordered 

DoS to take charge of humanitarian assistance, USAID to assume 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 19

responsibility for reconstruction activity, and DoD to oversee civil 

administration.19 

Between January and March 2003, the U.S. relaxed confidentiality restrictions on pre-war relief and reconstruction planning. More 

agencies then became more openly involved in planning for postwar Iraq. Financial and acquisition personnel, however, were still 

largely not included in the interagency planning process.20 Their 

absence contributed to the limited interagency cooperation on, and 

centralized support for, contracting and procurement during this 

period, which had deleterious effects upon subsequent phases of the 

program.

USACE: Task Force Restore Iraqi Oil 

In February 2003, the Secretary of the Army directed USACE to 

serve as the executive agent for the Iraqi oil restoration mission. 

USACE then created Task Force Restore Iraqi Oil (RIO) to manage 

and operate this mission, with the contracting officer for USACE’s 

Southwestern Division as the “contractor’s source of definitive 

guidance.”21

In late February 2003, the Assistant Secretary of the Army for 

Acquisitions, Logistics, and Technology (ASA-ALT) approved 

USACE’s justification for a sole-source, emergency response contract 

for Iraq’s oil sector. On March 8, 2003, USACE awarded this contract 

to KBR for “an interim period as a bridge to a competitive contract,” 

after receiving approval from the Under Secretary of Defense for 

Policy.22 See supra p. 15. It justified issuing the IDIQ contract on a 

sole-source basis because KBR was “the only company [that] could 

immediately satisfy the requirements of the oil sector plan, considering the imminence of potential hostilities.”23 USACE relied on 

section 6.302.1 of the Federal Acquisition Regulation (FAR),24 which 

allows sole-source awards whenever there is “only one responsible 
20 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

source and no other supplies or services will satisfy agency requirements.”25

The KBR sole-source contract generated considerable public controversy. Notwithstanding this controversy, SIGIR and GAO reviews 

of the award concluded that it complied with applicable federal 

regulations for sole-source contracts. The SIGIR review found that 

“the justification used was that KBR had drafted the Contingency 

Support Plan (CSP), had complete familiarity with it, had the security clearances necessary to implement it, and the contract need[ed] 

to be immediately available to implement.” GAO’s review noted that 

KBR’s qualifications as a sole-source provider were justified by its 

capabilities developed under the LOGCAP III task order awarded in 

November 2002.26

The oil sector contract had a ceiling of $7 billion. The total 

amount expended under the IDIQ contract eventually exceeded $2.4 

billion.

ORHA: Washington-Based Contracting Support 

Shortly after ORHA’s inception, the agencies assigned to work on 

the humanitarian and reconstruction pillars began planning for 

acquisition needs in Iraq. In February 2003, DoD’s Washington 

Headquarters Services directed the Defense Contracting CommandWashington (DCC-W) to meet ORHA’s contracting needs.In March 

2003, DCC-W awarded contracts totaling $108.2 million to execute 

the Iraqi Free Media Program and establish the Iraq Reconstruction 

Development Council, which comprised a group of Iraqi expatriates 

deployed to Iraq to assist ORHA with its outreach mission.27

A March 2004 audit conducted by the DoD Office of Inspector General (DoD OIG) found that ORHA initially had “no written plans or strategies for obtaining acquisition support” and no 

assigned acquisition personnel.28 The DoD OIG audit further criti-
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 21

cized DCC-W contracts for circumventing proper procedures, but 

cited a lack of contracting personnel and extreme time constraints as 

extenuating circumstances.29

ORHA: In-Country Contracting Support 

ORHA suffered from a lack of qualified contracting personnel in 

theater as it prepared to provide post-war relief and reconstruction services in Iraq. To remedy this shortfall, the Defense Contract 

Management Agency (DCMA) transferred three military contracting officers to support ORHA. Contingency contracting officers 

normally are warranted (i.e., provided the authority to write contracts) upon arrival in theater by the Head of Contracting Activity. 

However, the Principal Assistant Responsible for Contracting, U.S. 

Army Forces Central Command, refused to warrant these DCMA 

contracting officers.30 

DCMA then obtained a waiver from the Principal Deputy Under 

Secretary of Defense/Acquisition, Technology, & Logistics, allowing 

DCMA to warrant independently its contracting officers for ORHA’s 

procurement activities.31 But the warrants limited the contracting 

officers to procuring direct logistical support (e.g., office supplies 

and basic administrative services). The three contracting officers 

were specifically prohibited from executing contracts for reconstruction or humanitarian purposes, though there ensued a steady stream 

of such requests from various agencies.32 ORHA itself thus had no 

organic capacity to execute reconstruction and relief contracting. A 

former ORHA contracting official observed that “the true connection between requirements, funding, and contracts is what was missing most of the time; people didn’t know who to take their requirements to, who could or would approve it, what funding source would 

pay for it, and then who could or would contract for it.”33
22 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

ORHA Develops a Contract Review Process

In early April 2003, ORHA, DCMA, and DCC-W implemented 

improved processes that helped mitigate ORHA’s contracting 

difficulties. On April 8, 2003, ORHA created the Requirements 

Review Board (RRB) through a memorandum of understanding 

(MOU) with DCMA.34 Pursuant to the MOU, ORHA contracts 

were processed in the following way: 

1. The ORHA front office in Baghdad generated initial requirements.

2. These initial requirements were forwarded to the RRB for 

approval. 

3. The RRB approved and forwarded the requirements to the Under 

Secretary of Defense (Comptroller) (USD-C) for final review and 

approval.

4. After USD-C approval, the requirements were sent to the appropriate contracting agency for execution. 

These more formalized ORHA contracting processes governed contracting activity until CPA was formed a little over a month later. 

 According to a DoD OIG audit, which reviewed 24 contracts 

awarded by DCC-W, 15 contracts were awarded prior to the development of this process.35 The DoD OIG audit provided these details:

Generally, services or items that were not construction related or 

dealing with humanitarian relief were handled by the DCC-W.36 Other 

requirements that specifically related to rebuilding the infrastructure 

of Iraq were given to the Army Corps of Engineers who managed the 

Army Logistics Civil Augmentation Program (LOGCAP). According 

to the Office of the Under Secretary of Defense (Comptroller)/Chief 

Financial Officer, contracts for items and services that were to be 

provided or performed with seized Iraqi funds or vested Iraqi funds 

were returned to the ORHA/CPA Office in Baghdad for award of the 

contract.37
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 23

The Creation of CPA

CPA initially was recognized as a discrete organization in a CENTCOM order that Commanding General Tommy Franks issued on 

April 16, 2003. The President subsequently appointed Ambassador L. 

Paul Bremer III as his envoy to Iraq on May 9, 2003.38 And on May 

13, 2003, the Secretary of Defense designated Ambassador Bremer as 

CPA’s Administrator.39 ORHA, however, was not officially dissolved 

until mid-June;40 the delay apparently reflected the time needed by 

CPA to set up operations and subsume ORHA’s functions. 

In General Franks’ April 16 CENTCOM order, the CPA was 

described as “exercise[ing] powers of government temporarily, and 

as necessary, especially to provide security, to allow the delivery of 

humanitarian aid and to eliminate weapons of mass destruction.”41

The President’s appointment of Ambassador Bremer as presidential 

envoy to Iraq directed Ambassador Bremer to “oversee Coalition 

reconstruction efforts and the process by which the Iraqi people 

build the institutions and governing structures that will guide their 

future.”42 The Secretary of Defense’s designation letter appointed 

Ambassador Bremer as the “head of the Coalition Provisional 

Authority, with the title of Administrator.” The Secretary further 

directed that Ambassador Bremer would be “responsible for the 

temporary governance of Iraq, and shall oversee, direct and coordinate all executive, legislative, and judicial functions necessary to 

carry out this responsibility.” 43

From CPA’s inception, there was some question as to whether 

it was a U.S. entity or an international/multi-national entity like 

NATO. The following excerpt from a June 2005 report of the Congressional Research Service (CRS) underscores the ambiguity that 

persisted within the federal government regarding CPA’s status, 

especially with respect to contracting:
24 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The former Administrator of the Office of Federal Procurement Policy, 

in writing about contracting with the [CPA], offered [a] possible explanation of why government officials chose to have DoD components 

issue solicitations and award contracts for the reconstruction of Iraq: 

“The CPA is not the United States Government. Accordingly, if one 

enters into a contractual relationship with the CPA, one is not entering into a contractual relationship with the United States. The rights 

and remedies available to parties contracting with the United States 

will not be available in a contractual relationship with the CPA.”44

DoD Tasks Army as Executive Agent for ORHA

On May 21, 2003, the Deputy Secretary of Defense officially designated the Army as the executive agent for ORHA.45 When ORHA 

dissolved in mid-June 2003, the Army continued its support role as 

CPA’s executive agent.46 In this capacity, the Army provided administrative, logistical, and contracting support required by CPA “for the 

humanitarian relief and reconstruction for the people of Iraq.”47 

Development Fund for Iraq: 

Key Source for CPA Contracts 

On May 22, 2003, the United Nations approved United Nations 

Security Council Resolution 1483 (UNSCR 1483), establishing the 

Development Fund for Iraq (DFI). The Resolution required the 

funding of DFI with Iraqi oil revenue, existing Oil for Food funds, 

and all frozen and seized assets that had previously belonged to 

the Iraqi government or had been controlled by Saddam Hussein.48 

UNSCR 1483 further directed UN member nations holding Iraqi 

frozen assets to transfer them promptly to the DFI. It also gave the 

CPA responsibility for the DFI’s management and expenditure, and 

it provided that the CPA should use the DFI for the benefit of the 

Iraqi people. Importantly, the Resolution created the International 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 25

Advisory and Monitoring Board (IAMB), assigning it functions 

similar to those of an external audit committee and charging it with 

oversight of the DFI.49

The DFI began with an opening asset balance of $1 billion from 

the Oil for Food program.50 By the end of June 2004, the DFI had 

received total deposits of about $20 billion.51 Over the span of the 

DFI’s 13-month existence under CPA’s management, CPA spent 

$3.35 billion directly on relief and reconstruction projects.52 The 

CPA used the DFI for various purposes, including the funding of 

rapid reconstruction initiatives like the Commander’s Emergency 

Response Program (CERP). See infra p. 81.

Establishment of the CPA 

Head of Contracting Activity

With the creation of the CPA and the designation of the Army as 

its executive agent, the Department of the Army established a new 

contracting cell in Iraq. The DCMA concomitantly dissolved the 

contingent that had supported contracting and procurement for 

ORHA. The Assistant Secretary of the Army-ATL appointed an 

Army Colonel to serve as the Head of Contracting Activity (HCA) 

for CPA, and he arrived in theater in late June 2003.53 

At the outset, the HCA Office had just three contracting officers, but that number slowly increased as the HCA’s workload and 

responsibilities grew during 2003. The precise scope of the HCA 

Office’s mission was initially unclear.54 It was at first expected to 

provide support only to CPA’s headquarters in Baghdad. Its reach, 

however, rapidly expanded to supporting all four of CPA’s operating 

regions, which encompassed the 18 Iraqi governorates. During its 

first two months of operation, the HCA Office awarded more than 

$250 million in contracts.55

CPA’s HCA Office was given the Iraq reconstruction contracting 

mission “without limitations,” meaning that it could “execute not 
26 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

only Iraqi funds, but also supplemental and appropriated funds for 

the United States.”56 In 2003, however, DFI funds accounted for 99% 

of the HCA Office’s contracting activity. Only 1% came from funds 

appropriated by the U.S. Congress.57 From June 2003 to March 2004, 

99% of the contracts awarded through the HCA Office were competitive solicitations,58 with 65% of these awarded to Iraqi firms.59 This 

period of significant activity for the HCA Office was burdened by 

inadequate staffing, the absence of an effective requirements generation mechanism, and the lack of sufficient legal support to contracting officers.60

DFI Regulations: 

the Program Review Board and CPA Memo 4

CPA Regulation 3, issued on June 18, 2003, created the CPA’s Program Review Board (PRB). The PRB supplanted ORHA’s RRB and 

thereby became responsible for recommending expenditures by the 

CPA. The PRB’s designated voting members comprised 6 U.S. officials and representatives of the United Kingdom, Australia, the Iraqi 

Finance Ministry, Coalition forces, and the Council for International 

Coordination.61 Regulation 3 provided that the PRB could make 

recommendations for the expenditure of DFI and U.S.-appropriated 

funds, but only the U.S. officials had voting rights on recommendations involving U.S. funds.62

After the PRB began operation, the CPA Administrator approved 

formal procedures to regulate CPA’s contracting and expenditure of 

the DFI.63 These procedures were promulgated in CPA Memorandum 4, which the CPA Administrator signed on August 20, 2003. 

Memo 4 established comprehensive regulations for the execution of 

Iraqi funds through CPA contracts and provided that, though “Iraqi 

funds are not subject to the same laws and regulations that apply to 

funds provided to the [CPA] directly from coalition governments, 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 27

they shall be managed in a transparent manner that fully comports 

with the CPA’s obligations under international law.”64

Expenditures of U.S. appropriated funds under the CPA were 

carried out pursuant to the FAR and not Memo 4. There was 

concern at the time about the uncertainty that might arise from a 

contracting system operating under two sets of contracting regulations.65 This concern, however, was mitigated by the fact that 

virtually all of the HCA Office’s contracts were funded with DFI 

throughout the remainder of 2003 and the first quarter of 2004. The 

CPA IG concluded in an audit of the DFI that the CPA frequently 

failed to follow Memo 4 in the contracting of DFI.66

U.S. Appropriated Funds Designated 

for Reconstruction

In April 2003, the Congress passed Public Law (P.L.) 108-11 that 

created the Iraq Relief and Reconstruction Fund (IRRF 1), appropriating $2.475 billion for use primarily by the lead U.S. reconstruction agencies in Iraq—USAID, DoS, and DoD. USAID was the 

largest recipient of IRRF 1 money, eventually receiving about 70% 

of the appropriation.67 P.L. 108-11 also authorized the reimbursement of these agencies for expenditures made from their accounts 

for previous Iraq relief and reconstruction planning, preparation, 

and initial awards. 

A separate provision of the bill established the Natural Resources Risk Remediation Fund (NRRRF) to address emergency fire 

fighting, repair damage to oil facilities and related infrastructure, 

and preserve a distribution capability. NRRRF funds were used to 

help pay for the cost of Task Force RIO, which was administered by 

USACE. The NRRRF program obligated approximately $800 million, chiefly for oil field remediation.68
28 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

USAID: Grants, Cooperative Agreements, 

and Contracts

During ORHA and the early CPA period, USAID awarded grants 

and made cooperative agreements for rapid humanitarian response 

initiatives and contracts for more extensive reconstruction efforts. 

USAID issued these awards, which were primarily funded by U.S. 

appropriated dollars provided through IRRF 1, pursuant to the 

reconstruction strategy that USAID had developed and presented to 

the Office of Management and Budget (OMB) and the NSC in the 

latter part of 2002 and early 2003.69

The USAID reconstruction strategy had four main objectives70: 

• execute necessary infrastructure reconstruction projects

• provide education, health, and social services

• strengthen the economic, financial, and agricultural sectors

• improve the efficiency and accountability of local government.

Most USAID contracting was managed by its senior contracting staff in Washington, D.C. USAID operates under the Foreign 

Assistance Act of 1961, which is specifically tailored for work outside 

the United States and thus is not governed by the more demanding domestic contracting requirements for competition.71 USAID’s 

greatest challenge was “scaling up the flexible response mechanisms 

that it uses for natural disasters to something of the size that was 

required for Iraq.”72

The Disaster Assistance Response Team 

Issues Cooperative Agreements

In March 2003, OFDA deployed a substantial DART team to the 

Gulf Region, which was tasked to provide initial humanitarian aid 

and disaster relief in post-war Iraq. DART team personnel comprised a mix of direct hires, contractor staff, and other USAID 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 29

personnel, whose duties included assessing relief and reconstruction 

needs. The pre-positioned 65-person DART team – the largest ever 

deployed – was stretched across Kuwait, Qatar, Turkey, Jordan, and 

Cyprus, awaiting further movement into Iraq. 

The DART team was unable to develop detailed requirements for 

relief and reconstruction projects, because it lacked specific information about the situation on the ground in Iraq. The team thus applied 

“creative contracting mechanisms,” including the issuance of cooperative agreements to non-governmental organizations (NGOs). 

Unlike a grant, a cooperative agreement requires more substantial 

involvement and programmatic control from USAID. The cooperative agreements were executed in USAID’s office in Washington, 

D.C. DART awarded cooperative agreements to four NGOs, each 

amounting to a maximum of $4 million.73

USAID Begins Procurement Operations

USAID’s formal procurement process for Iraq reconstruction began 

in January 2003, when the NSC instructed the agency to initiate 

contracting related to Iraq. On January 16, 2003, the USAID Administrator responded to this urgent directive by authorizing the use of 

“a less than full and open competition process” to meet the pressing 

need to prepare for potentially significant relief and reconstruction 

efforts.

Between February and May 2003, USAID awarded eight major 

IRRF 1-funded contracts, using less than full and open competition, 

totaling about $1.3 billion. Although the Congress did not approve 

IRRF 1 until mid-April 2003, USAID issued contracts in anticipation 

of the eventual appropriation. The USAID IG audited these procurements and found only minor shortcomings in the contracting 

processes.
30 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

USAID: IRRF 1 Infrastructure Contract

USAID awarded its largest IRRF 1 contract for major infrastructure 

reconstruction work in Iraq to Bechtel International. This contract, 

which obligated a substantial portion of IRRF 1, generated controversy because of its large value and the use of less than full and open 

competition in the solicitation process. USAID initially had sent the 

Request for Proposal (RFP) to seven potential contractors, with a 

two-week response time. Three declined to submit, and only two of 

the remaining four submitted competitive bids. On April 17, 2003, 

USAID “awarded Bechtel a cost-plus/fixed-fee ‘letter contract’ for a 

total not to exceed $680 million.”74 USAID eventually increased the 

contract’s ceiling to $1.03 billion in September 2003.75

The USAID procurement office estimated that the normal processing time for a contract of this size would be seven months. However, given the exigent circumstances facing reconstruction planners, 

USAID awarded the Bechtel contract in less than three months. The 

USAID IG’s review of the Bechtel contract award concluded that the 

agency had complied with all applicable federal regulations, except 

for the rule requiring “notification and timely debriefing of offerors 

that were not selected.”76

Other USAID Contracts during the Early-CPA Period

USAID issued four other major contracts obligating IRRF 1 dollars. 

These contracts, finalized from June to October 2003, addressed 

economic growth, agricultural assistance, and the monitoring and 

evaluation of USAID’s Iraq reconstruction programs. USAID awarded only one of the four contracts, a $36.9 million cost-plus fixed-fee 

contract for agricultural assistance, through full and open competition.77 Table 1 presents information on each of USAID’s original 

IRRF 1 contracts (but not grants or cooperative agreements).
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 31

Grants under Contracts

Several of the contracts issued by USAID contained a special provision allowing grants under contracts, which USAID is authorized 

by law to use. USAID regulations provide that “when the [USAID] 

Head of the Contracting Activity provides [gives] written approval, 

the Contracting Officer may enter into a contract that provides for a 

USAID-direct contractor to execute grants with non-governmental 

organizations.”78USAID has found grants under contract to be an 

effective method throughout the world, and they were especially 

useful in Iraq. During the implementation of its first local government program in Iraq, a USAID contractor issued more than $15 

million in such grants to “jump-start local civil administrations’ 

ability to restore essential services.”79
32 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Date Awarded Contractor & Sector Original Contract Amount (millions) Original Contract Ceiling or Current Obligation (millions) Original Contract Length Contract Type & Procurement Method02/07/03 International Resources 

Group (IRG): Personnel Services Contract

 $7.000 $27.10 3 month, with 

2 option years

CPFF: Sole Source

03/17/03 AFCAP: Logistics $26.00 $91.50 2 years Inter-agency 

agreement

03/21/03 SkyLink Air: 

Airport Administration

 $10.200 $27.20 18 months, with 

2 option years

CPFF: Less than full 

and open

03/07/03 SSA Marine: 

Iraq Seaport Assessment

 $4.800 $14.32 1 year with 

2 option years

CPFF: Less than full 

and open

04/11/03 Research Triangle 

Institute: Local Government I

 $168.000 $241.91 I year, with 

2 option years

CPFF: Less than full 

and open

04/11/03 Creative 

Associates, Inc. (CAI): Education I

 $62.628 $56.50 1 year, 2 option 

years 

CPFF: Less than full 

and open

04/17/03 Bechtel National: 

Infrastructure

 $680.000 $1,029.83 18 months CPFF: Less than full 

and open

04/30/03 Abt Associates: 

Health Systems

 $43.800 $23.03 1 year CPFF: Less than full 

and open

06/01/03 Army Corps of 

Engineers: Architecture and Engineering Services

 $23.99 $38.09 19 months Interagency

agreement

06/25/03 Management Systems 

International: Monitoring and Evaluation

 $5.038 $15.12 1 base year 

and 2 option years

Task Order: 

RFP to all holders 

of IQC

07/24/03 Bearing Point: 

Economic Recovery I

 $79.583 $79.58 1 year with 

2 option years

CPFF: Less than full 

and open

10/15/03 Development 

Alternatives, Inc.: Agricultural Development

 $36.900 $106.70 1 year with 

two option years

CPFF: Full and Open

USAID’s Initial Iraq Reconstruction Contract Awards

Sources: USAID’s Iraq weekly financial summaries (http://www.usaid.gov/iraq/updates/index.html, accessed April 25, 2006)USAID’s Iraq audits (http://www.usaid.gov/oig/iraq_reports.html, accessed April 25, 2006)USAID’s Iraq acquitstion information (http://www.usaid.gov/iraq/activities.html, accessed April 25, 2006) and information provided to SIGIR by USAID staff.USAID/Iraq, written comments to SIGIR, June 8, 2006.

Table 1
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 33

U.S. Department of State: DynCorp Contract

The DynCorp contract, awarded in April 2003, was the principal 

DoS contracting event during this period. ORHA had directed the 

DoS Bureau of International Narcotics and Law Enforcement (INL) 

to manage police sector training and related reconstruction activities 

in Iraq, because it possessed extensive experience in training police 

in post-conflict environments. INL then coordinated with the U.S. 

Department of Justice to perform a joint assessment of Iraq’s police 

training facilities, prisons, and courthouses. 

In light of the compelling need for the rapid recovery of Iraq’s 

security sector, DoS authorized a limited competition for the police 

training contract. On April 2, 2003, INL and DoS’s division of 

Acquisition Management (DoS-AQM) hosted a pre-solicitation 

conference and issued an RFP for the contract on April 3. DynCorp 

and three other firms submitted bids, and technical presentations 

were held April 10-11. DoS announced the award to DynCorp on 

April 17, 2003.80

After the contract was issued, the focus shifted from the training of Iraqi police to the construction, operation, and maintenance 

of Iraqi police training facilities in Jordan.81 Modifications to this 

contract continued to increase its value, which reached more than 

$140 million by August 2003. At that time, DoS-AQM published a 

pre-solicitation notice to re-compete the contract. 
34 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The later CPA Period (august 2003 to June 

2004)—contracting Emphasis Shifts to 

Large-Scale Reconstruction

In late summer 2003, the CPA’s reconstruction contracting emphasis 

moved from humanitarian relief and the restoration of essential services, funded chiefly by IRRF 1 and DFI, to large-scale infrastructure 

projects. This new emphasis continued through the balance of CPA’s 

tenure, which concluded in June 2004. 

Contracting efforts during this period focused on the award and 

allocation of funds appropriated by the Congress in Public Law 

108-106. This public law, signed by the President on November 6, 

2003, provided $18.4 billion in grants through the Iraq Relief and 

Reconstruction Fund (IRRF 2). The effort to design and implement 

the IRRF 2 program became the central feature of CPA’s contracting 

activity during this period.

HCA Activities Continue

When CPA’s planning for the IRRF 2 program began in late July 

2003, the HCA Office’s contracting activities were dominated by a 

wide range of awards predominantly funded by DFI. The Deputy 

Assistant Secretary of the Army for Policy and Procurement, testifying before the Congress in March 2004, said that: 

more than 1,300 contracts totaling $1.3 billion have been awarded 

by our contracting office in Iraq. These contracts were awarded for 

the repair and renovation of schools, banks, railway stations, clinics, 

mosques, a human rights building, a teacher training institute, a 

woman’s rights building, and water treatment plants. These contracts were awarded to provide police and fire fighters with uniforms 

and equipment; hospitals with badly needed supplies; electrical 

power system equipment; rescue equipment; and buses. In addition, our contract awards are helping to build playgrounds, youth 

centers, emergency housing, roads, sewers, and irrigation systems.82
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 35

In an audit of contract award processes at the CPA, SIGIR provided the following insight into the number of DFI-funded contracts 

let in Iraq: 

the Iraq Project and Contracting Office informed [SIGIR] that [the CPA 

Contracting Activity] had awarded 1,988 contracts, grants, and purchase and delivery orders valued at approximately $1.04 billion as of 

April 4, 2004. Of this total, 1,928 contracts valued at approximately 

$847 million were awarded with Development Funds for Iraq (DFI).83

U.S. Army Corps of Engineers: 

Oil and Electricity Contracts

Oil

USACE intended the sole-source RIO contract awarded to KBR in 

March 2003 to be an interim measure until a new contract could be 

fully competed and awarded. The RIO contract’s $7 billion ceiling 

was the maximum amount that could be paid out, but the actual 

expenditures proved considerably less. 84 See supra p. 19. In June 

2003, USACE solicited RFPs for two new oil sector contracts to 

replace the sole-source RIO contract. The offer deadline was August 

15, 2003, but was extended until November 14, 2003. 

The bid process for the oil contracts was fully competitive and 

used a formal source selection panel. The source selection panel 

awarded two new IDIQ contracts on January 16, 2004, one with an 

$800 million ceiling to the Worley/Parsons Group for Iraq’s northern 

oil sector and the other to KBR for the southern oil sector with a 

$1.2 billion ceiling. Concurrent with this solicitation, the CPA’s PRB 

voted to fund additional RIO task orders with DFI money, resulting 

in the allocation of $1.4 billion of DFI to RIO from September 2003 

through March 2004.85
36 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Electricity

In late August 2003, the CPA identified electricity shortages as a 

potential threat to security in Iraq.86 In response, CENTCOM tasked 

USACE to focus on rebuilding Iraq’s electrical infrastructure.87

USACE then issued task orders for reconstruction work in Iraq’s 

electrical sector under contracts originally awarded in April 2003 to 

three U.S. firms. These contracts were intended to support construction work throughout CENTCOM’s area of responsibility and not 

just in Iraq. The original maximum value for each contract was $100 

million. But the size of the Iraq task orders caused these three IDIQ 

contracts immediately to exceed their respective $100 million 

ceilings.88

GAO criticized USACE’s August 2003 award of these large task 

orders, because they were not competed among the three existing 

contract holders. GAO noted that USACE decided to divide up the 

work, in consultation with the contractors, based on Iraq’s geography and the contractors’ respective capabilities in-theater. Moreover, 

until requested by GAO in its review of the electricity contracts, 

USACE did not prepare justifications for the non-competitive task 

orders.89

In September 2003, USACE formed Task Force “Restore Iraq 

Electricity” (RIE) to provide electrical infrastructure work in Iraq 

using these three contractors. RIE received $300 million from the 

“Iraq Freedom Fund (IFF), which helped fund the task orders issued 

under the contracts.”90 The IFF was funded separately from the 

IRRF 1 program but under the same April 2003 emergency appropriation legislation. Significantly, in March 2004, each of the three 

contractors involved in the initial RIE awards also won competitive 

awards under the IRRF 2 design-build solicitation for work in the 

electricity sector.91
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 37

Planning Begins for IRRF 2 

Planning for the IRRF 2 program began during late July 2003 and 

continued through the fall. IRRF 2 was both quantitatively and 

qualitatively different from IRRF 1, which primarily engaged in a 

“broad range of humanitarian and reconstruction efforts.” In contrast, IRRF 2 “was intended to have an immediate impact on the two 

greatest reconstruction concerns raised since the occupation of Iraq 

began—security and infrastructure.”92

In July 2003, CPA formulated an initial strategic plan and presented it to the Congress.93 CPA did not link the reconstruction 

aspects of this plan to any specific spending or funding programs.94 

Instead, the plan provided general goals, such as “re-open airspace 

and airports” and “repair and upgrade water and sewage treatment 

facilities.”95

More specific CPA planning for the IRRF 2 program commenced 

in early August 2003,96 just a few days after the CPA Administrator 

had informed the Secretary of Defense that a large supplemental 

appropriation would be necessary to meet CPA’s reconstruction 

goals.97 At that time, the United States was also preparing for an 

October 2003 conference in Madrid designed to solicit funding 

pledges for Iraq’s relief and reconstruction from potential donor 

nations. The director of CPA’s Office of Management and Budget 

(CPA-OMB) suggested that CPA draft the IRRF 2 proposal in a way 

that would allow its use at both the donor’s conference (as the U.S. 

pledge) and before Congress in support of the supplemental budget 

request.98

CPA Creates the Program Management Office

In August 2003, the CPA Administrator signed an action memo 

creating the Program Management Office (PMO) and designating 

it as the primary manager for the IRRF 2 program.99 To lead the 
38 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

PMO, the CPA Administrator selected a retired Rear Admiral (and 

former SEABEE), who had served as the Deputy Senior Advisor to 

the Transportation and Communication Ministry since his arrival in 

Baghdad in July 2003. The CPA Administrator tasked the new PMO 

Director “to create and lead an organization in Iraq charged with the 

execution of the [reconstruction] program” and to report to the CPA 

Director of Operations and Infrastructure. 100

CPA established PMO, in part, because of the limited capacities of 

the recovering Iraqi ministries to manage a large-scale reconstruction program.101 A plan to award 3,700 fixed-price contracts directly 

to Iraqi contractors was proposed but rejected because of concerns 

about Iraq’s construction capabilities. Moreover, the U.S. did not 

have sufficient oversight capacity in country to supervise such an 

enormous Iraqi-led program.102

Some disagreed with the decision to create a wholly new organization to manage most of the Iraq reconstruction program.103

USAID was already managing a broad spectrum of reconstruction 

programs in Iraq under IRRF 1 and was ready to play a leading role 

under IRRF 2. And USACE was in country managing Task Forces 

RIO and RIE; it potentially could have been funded to expand its 

operations to manage the IRRF 2 program. Senior USACE officials at 

the time, however, did not believe that USACE had sufficient existing capacity to manage the mammoth reconstruction endeavor.104 

Significant financial and administrative burdens accompanied the 

creation of a new large construction oversight organization in postwar Iraq.105 Among other things, the lack of early funding and sufficient personnel to support PMO’s structure and operations inhibited 

the organization’s start-up. See infra p. 43. 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 39

Reconstruction Estimates and Benchmarks

In August 2003, the CPA-OMB director presented CPA’s Administrator with cost estimates for the proposed Iraq reconstruction 

program. These preliminary estimates were derived from the findings of the World Bank/UN Assessment Mission, the Iraqi ministries project lists, and Bechtel. The World Bank/UN assessment had 

pegged potential overall relief and reconstruction costs for Iraq at 

$56 billion.106 CPA’s IRRF 2 proposal was designed to “get things 

started” in Iraq reconstruction through targeted programs, focusing 

primarily on large infrastructure projects.107 CPA initially estimated 

that the funding necessary to fulfill this ambitious program would 

amount to approximately $27 billion. 

In September 2003, the CPA Administrator testified on Capitol Hill in support of the IRRF 2 proposal. He requested that the 

Congress appropriate over $20 billion to fund IRRF 2. The $27 billion estimate had apparently been reduced in the planning process. 

During his congressional testimony, the Administrator pledged that 

CPA would ensure that all appropriated funds would be contracted 

through full and open competition and expended with “prudent 

transparency.” He specifically asked the Congress to provide the 

funding as grants rather than loans, noting that Iraq’s existing debt 

burden of nearly $200 billion had placed the country in a precarious financial position that would be exacerbated if the U.S. required 

repayment.108 

At this critical juncture, the CPA had not developed consensus 

on benchmarks for infrastructure outputs nor analogous milestones 

that Iraq should meet as the program advanced. Rather, the goals at 

this stage were quite general: to move Iraq out of post-war chaos and 

toward recovery by stimulating economic growth, relieving suffering, establishing security, and repairing the critical infrastructure.109
40 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Reaching these goals would restore Iraq’s government and society 

to a level that would permit Iraqi entrepreneurs to develop a market 

economy.110 

The Supplemental Request

CPA completed the process of developing the IRRF 2 supplemental request largely through tasking the ministries to identify relief 

and reconstruction needs. Because the ministries were still “getting 

back on their feet,” their ability to respond to these requests varied 

significantly.111 

USAID proposed changes to the draft supplemental request, but 

they were not incorporated into the final document presented to 

Congress. USAID described its attempt to provide input as follows: 

when a draft was provided to implementing agencies, [USAID noted] 

that critical programs for nation building (such as democracy) were 

not included. [USAID also suggested] broadening the overall categories to permit democratic and economic transformation programs, 

as well as key social services’ activities. [USAID] recommended that 

the supplemental not list proposed projects as this would limit flexibility in programming. [USAID’s] recommendations were forwarded 

to the Office of Management and Budget for incorporation into the 

supplemental. However, these recommendations were not included 

in the final draft, which eliminated any funding for democracy building, education, and agriculture, and reduced funding to support the 

economic transition. Instead, the draft IRRF-II was dominated by a 

collection of rapidly compiled infrastructure projects. The CPA budget 

office structured the request in a narrow line item format, rather than 

in broad categories. Congress approved the...request almost exactly 

as it had been submitted (with a few additions such as $100 million 

for democracy building and limited funds for education). More 

importantly, Congress approved CPA’s line item format, restricting 

flexibility required to respond to changing conditions in Iraq.112
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 41

Details of IRRF 2 

The $18.4 billion in IRRF 2 money was allocated across the ten sectors for Iraq reconstruction as follows:

• Security and Law Enforcement: $3.24 billion

• Justice, Public Safety, Infrastructure, and Civil Society: 

$1.32 billion 113

• Electricity: $5.56 billion

• Oil: $1.89 billion

• Water Resources and Sanitation: $4.33 billion

• Transportation and Telecommunication: $500 million

• Roads, Bridges, and Construction: $370 million

• Private Sector Development: $153 million

• Health Care: $793 million

• Education, Refugees, Human Rights, and Governance: 

$280 million114

There were a number of key differences between IRRF 1 and 

IRRF 2:

• IRRF 1 was much smaller in scale than IRRF 2 ($2.475 billion vs. 

$18.4 billion). 

• IRRF 1 contracting was primarily managed by USAID, whereas 

IRRF 2 contracting was managed chiefly by DoD.

• IRRF 1 contracting commonly used less than full and open competition, whereas IRRF 2 contracting was executed almost exclusively using full and open competition.

• IRRF 1 did not specifically allocate its $2.475 billion across different sectors. IRRF 2 was entirely sector driven. 

• IRRF 2 eliminated funding for certain areas covered by IRRF 1, 

including food provision and distribution, de-mining, and 

agriculture. 
42 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

• IRRF 2 combined certain IRRF 1 spending priorities into a single 

sector. For example, education, refugees, human rights and governance were all placed in one sector.

• IRRF 2 included nearly $2 billion for the oil sector. Because oil 

was covered under a separate section of the April 2003 emergency 

supplemental, IRRF 1 obligated no funds for oil projects.

 

P.L. 108-106 required that full and open competition be used for 

any contract obligating IRRF 2 money or for any “extension, amendment or modification of contracts” that had used less than full and 

open competition for IRRF 1 funds. One official involved in contracting planning for IRRF 2 observed:

Congress appeared to be very unhappy with the way things had 

happened [under IRRF 1]...not enough transparency, not enough 

competition, sole-source contracting. They were very specific about 

the way they wanted it done in accordance with peacetime federal 

acquisition regulations with lots of transparency.115

An important (and subsequently oft-used) provision in P.L. 108-

106 gave the President the authority to reallocate 10% of any sector’s 

funding to another sector, “except that the total for the allocation 

receiving funds may not be increased by more than 20 percent,” 

except in an emergency.116 This provision was applied during the 

2004 reprogrammings of IRRF 2 funds, which moved $5.8 billion 

out of traditional reconstruction sectors and into the security and 

justice and democracy building sectors. Of note, there were over 250 

reprogramming actions after IRRF 2 was appropriated.117 

Limiting IRRF 2 Competition to Coalition Countries

On December 5, 2003, the Deputy Secretary of Defense published 

a memo restricting which countries were eligible to win IRRF 2 

contracts noting that:
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 43

It is necessary for the protection of the essential security interests 

of the United States to limit competition for the prime contracts of 

these procurements to companies from the Unites States, Iraq, Coalition partners, and force contributing nations. Thus, it is clearly in 

the public interest to limit prime contracts to companies from these 

countries.118

Attached to the Deputy Secretary’s memo was a list of 63 countries that were qualified to compete for IRRF 2 contracts. This limitation applied to all IRRF 2 sectors, except oil. Of note, this limitation 

had not been applied to IRRF 1 contracting.

In its review of Iraq-related contracts, GAO noted “the plain 

language of the law provides that [the Secretary of the Defense’s] 

authority to approve public interest exceptions may not be delegated 

and we conclude that the Deputy Secretary did not have authority [to enact the exception] in this instance.”119 Further, because the 

exception was meant to apply to 26 contract actions, GAO determined that this was a “class” determination, which is “specifically 

prohibited by FAR 6.302-7(c)(4).” DoD did not concur with GAO’s 

findings.120

PMO Operational Funding and HCA Staffing

PMO’s operating costs were supposed to be paid from appropriated 

funds. In August 2003, the CPA Administrator approved $10 million for the PMO, but the funds were not received until November 

2003,121 which limited its capacity to execute an effective start-up. 

The November 2003 supplemental appropriated an additional $50 

million for management systems to support reporting on uses of 

IRRF 2. The PMO, however, did not receive these reporting funds 

until May 2004, hampering its ability to develop a system to manage 

project data.122 A SIGIR audit of the use of the $50 million in reporting funds found that only $22.6 million ultimately was obligated for 

activities directly related to “reporting.”123
44 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The amount of funding provided under IRRF 2 was so large and 

the need for action so urgent that no single service could assume the 

contracting burden alone.124 In the late fall of 2003, the HCA Office, 

PMO, and the Deputy Assistant Secretary of the Army (Policy and 

Procurement) developed a joint manning document (JMD) to 

increase the number of contracting personnel supporting the reconstruction effort. The JMD directed expansion of the HCA office’s 

contracting staff from 15 to 57, with approximately 24 slots to be 

filled by contractors.125 But by February-March 2004, just before the 

award of the major IRRF 2 contracts, a total of about 16 people were 

serving in the HCA office.126

CPA Develops a Spend Plan for IRRF 2 

P.L. 108-106 mandated that a “spend plan” for IRRF 2 reconstruction 

funds be filed each quarter with the Congress, beginning on January 5, 2004. In the two months following the passage of P.L. 108-106, 

the staff and contractors at PMO and CPA developed the required 

spend plan, which provided details on the developing reconstruction 

program.

During this period, the Iraqi ministries became more involved in 

developing projects for IRRF 2, working with CPA to prepare Project 

Identification Forms (PIF) that were used to provide details about 

each project. The CPA Administrator had directed that the CPA’s 

senior advisors and the Iraqi ministries—and not PMO—should 

determine which projects would be funded under the IRRF 2 plan.127

PMO helped develop the PIFs, but its participation occasioned some 

tension in the project selection process. A senior advisor from a 

ministry that was then widely considered to be one of the best developed provided this perspective on the project identification process: 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 45

Once funds had been appropriated, [we] needed to work aggressively to ensure that the PMO accepted [our] priorities, which were 

Iraqi priorities, and everything from [building] design to location 

was dictated by the Iraqis. Part of the challenge was taking the Iraqi 

product into the “design-build” part of the contracting process. As 

the PMO tried to make changes to get things on contract, we insisted 

that the Iraqis needed to be consulted.128

Project costs were estimated through analysis of specific project 

data in the PIFs, with add-ons made for security. PMO personnel 

involved in IRRF 2’s formulation reported that original security 

add-ons were relatively low, typically ranging from 7% to 10% of 

total contract cost. But as the security situation worsened in Iraq, 

security add-ons rapidly increased to above 15%.129 

PMO entered all the PIFs into a database, prioritizing them into 

a master list and matching them against available funding.130 Lower 

priority projects did not receive funding; these proposals were given 

to the Ministry of Development, Planning and Cooperation, which 

was expected to work with other donors to fund them. The PMO 

then provided the list of funded projects to the CPA Administrator, 

who approved and authorized the submission of the list with the first 

Section 2207 Report.

131

The initial slate of projects created by this process had a variety 

of problems, largely because of indeterminate scopes of work. 

The ministries and the CPA senior advisors provided much of the 

information for the list, but many ministries did not understand the 

requirements for scopes of work. Moreover, some ministries did not 

have good relationships with provincial leaders and thus had difficulty obtaining accurate information, especially regarding the condition of more distant or dangerous project sites. As a result, many 

PIFs were “basically place holders,” especially for smaller projects 

such as schools.132
46 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Section 2207 Report to Congress

On January 5, 2004, CPA presented its IRRF 2 spend plan in the first 

Section 2207 Report to the Congress. The plan identified funding 

according to the ten sectors specified by P.L. 108-106 and quantified 

spending on proposed projects within each sector. 133 It also recommended funding for approximately 2,300 separate projects.134

The January 2004 spend plan proposed the first sector reprogramming, increasing the amounts allocated for justice/public safety/

infrastructure/civil society and private sector development and concomitantly reducing oil sector funding allocations. This reprogramming was based on the need to “expand and accelerate democracybuilding initiatives” and put a “greater concentration of resources on 

local facilities and community centers.”135 These changes in funding 

allocations reflected the perception that more money was needed 

to develop Iraq’s democratic institutions in preparation for the July 

2004 transfer of sovereignty to the Iraqis, which the President had 

announced in November 2003.136

Administrative and Funding Bottlenecks

Concurrent with PMO’s development of the IRRF 2 spend plan, a 

DoD-led contracting team developed an acquisition strategy that 

would guide the award of IRRF 2 sector contracts. See infra p. 54. 

The structure for the contracting program developed slowly, because 

there was significant debate over which agencies should administer contracting for each sector and how much funding should be 

allocated to each sector.137 These decisions had to be made before the 

start of the solicitation process. 

Approximately $12 billion of the $18.4 billion IRRF 2 supplemental was allocated to “hard construction” sectors. Pursuant to P.L. 

108-106, the funds were distributed among the six primary sectors 

where construction work was the predominant activity: electrical; 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 47

public works and water; security and justice; transportation and 

communications; buildings, housing and health; and oil. Health care 

was included under hard construction because most of these funds 

were to be spent on building new primary health care facilities and 

renovating existing hospitals. The IRRF 2 funds were channeled by 

OMB through the Army, which served as DoD’s executive agent supporting the CPA.

Although the Congress appropriated the IRRF 2 funds in November 2003, the money did not become available to the executing 

agencies until OMB apportioned it. OMB initially released IRRF 2 

funds in January 2004. The delay in release was caused partially by 

a high-level policy debate over IRRF 2’s spending strategy.138 There 

was some resistance within the NSC to CPA’s approach, which was 

perceived as overly ambitious given the deteriorating security situation in Iraq. This debate led to an effort to hold back $4 billion of the 

IRRF 2 funds until PMO had achieved some measure of progress. 

A senior contracting official, who was part of the PMO team and 

later worked for its successor, the Project and Contracting Office 

(PCO), gave this description of the situation at that time:

We had to go out subject to the availability of funds because we 

didn’t have the funding approved by OMB. We knew it was appropriated, but it just hadn’t been apportioned yet. But we took [leadership’s] direction, and we took the risk and put [the contracts] out, 

subject to the availability of funds.139

DoD Sends an Acquisition Assessment Team to Iraq

In December 2003, DoD developed plans to send assessment teams 

to Iraq to review various problematic areas within CPA, including 

security, human resources, and contracting. The Acquisition Management Assessment Team, which was assigned to review CPA’s contracting capability, was composed of representatives from USAID, 
48 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

USACE, and DoS, and led by a senior military contracting officer. In 

late January 2004, the team traveled to Baghdad with the charge to: 

assess the mission; composition; requirements; resourcing; and 

command and control of program management, facilities management, contracting and logistics functions in order to ensure an 

incremental, orderly transfer from CPA to the appropriate authority 

no later than June 30, 2004.140

The Team’s key recommendations and findings on contracting 

included:141

• Immediately increase contracting staff. The HCA Office urgently needed more personnel. At existing staff levels, the HCA was 

experiencing difficulty carrying out the necessary contracting for 

DFI and IRRF 1 demands. The assessment team concluded that 

the existing staff could not handle the increased workload that 

IRRF 2 would bring.

• Create a program management team to help define and determine project requirements. The HCA Office needed more individuals with acquisition expertise who could help PMO’s program side of the operation, which was not adequately performing 

the contract requirements function.

• Create a project prioritization board comprising PMO, HCA, 

and ministry officials. HCA needed to develop contracting 

priorities based on construction needs that aligned with each 

sector’s strategy for reconstruction.

• Continue to support implementation of the Standard Procurement System (SPS). DoD’s automated contracting system 

was needed to help the HCA Office provide timely delivery of 

services and equipment. 

• End the unauthorized procurement of goods and services. CPA 

senior advisors, ministry, and military personnel were engaging 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 49

in unauthorized procurements in violation of CPA Memo 4.142

• Provide additional legal expertise to the HCA Office. The HCA 

Office needed more contracting lawyers to troubleshoot solicitation problems and to support the office so that legal disputes did 

not cause undue delays.

In February 2004, the head of the DoD contracting assessment 

team returned to Iraq as the head of a requirements generation team 

that supported the HCA Office. In March 2004, he became the new 

HCA, remaining in Baghdad until February 2005.

CPA Head of Contracting Activity Initiatives 

The HCA responded to the assessment team’s recommendations by 

instituting a variety of initiatives to systematize CPA’s contracting process. The HCA focused first on improving requirements formulation, 

both in quality and timeliness. The requirements process is critical 

because it determines what work must be done to accomplish a construction project. Effective contracting demands clear project requirements. The assessment team found that the lack of a good requirements system significantly burdened CPA’s contracting activity: 

under normal contracting circumstances, customers come to KOs 

[contracting officers] with Statements of Work and a clear idea of 

what they need. In Iraq, at the time, this didn’t happen and sometimes a contract would be written, and then the customer would say 

it wasn’t what he or she wanted. This was due to unclear requirements definition. Industry bidders require a very clear understanding 

of what the work would entail.143

Because of this shortfall in good requirements, HCA contracting 

officers devoted an inordinate amount of time helping PMO write 

project requirements. To remedy this situation, HCA assigned 12 
50 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

staff members to handle requirements, which immediately alleviated the contracting bottleneck that had developed because of the 

requirements problem. 

In early 2004, there were “about 20 different organizations undertaking contracting [in Iraq]. The HCA [Office] was contracting, 

companies were contracting with sub-contractors, and some who 

didn’t have authority—such as the ministries—were also awarding 

contracts.”144 In April 2004, the HCA sent a memorandum to all 

CPA personnel informing them that “recurring actions concerning 

the unauthorized commitment of U.S. appropriated funds and Iraqi 

funds have become an issue.” The memo noted that the unauthorized commitments are “not binding on the Government because the 

individual[s] who make the agreements lack the authority to enter 

into the agreements on behalf of the Government.”145 The HCA’s 

memorandum was a belated effort to ensure that CPA contracts 

obligating DFI complied with Memo 4.

Other major HCA initiatives implemented in response to the 

DOD Assessment Team’s report included:

• Organizing contracting officers by sector, with at least two or 

three contracting officers assigned per contract. This allowed 

contracting officers to become experts in a specific sector. 

• Securing additional legal personnel to ensure the legality of the 

contracting process at each stage, thereby avoiding time-consuming contract disputes.146 Many legal questions arose in the 

unique context of CPA, and contracting officers generally had 

little legal experience to resolve them. CPA attorneys, who had 

numerous other duties, were called upon to answer these questions, which frequently delayed the contracts involved. Contracting officers thus needed their own legal staff to avoid the delays 

that legal issues could create if not resolved promptly.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 51

• Creating an internal, automated contract documentation 

system that replaced the existing manual system.147 The HCA’s 

contract management system was weak.148 Part of the reason was 

that the Standard Procurement System (SPS), DoD’s automated 

procurement system, was not easily implemented in Iraq. As a 

result, contracting offices had developed ad hoc contract documentation systems that proved inconsistent. SIGIR audits of contracting during this period found numerous instances of missing 

contracts.149

• Applying the FAR to contracts funded by DFI and IRRF.

The new HCA ordered the FAR to be used for all contracting, 

regardless of funding source, to avoid confusion on which law 

applied.150 

PMO Turns to the Air Force Center for 

Environmental Excellence 

In December 2003, the PMO Director recognized that the award of 

the design-build contracts for IRRF 2 would take time. However, he 

wanted to move forward immediately with urgently needed reconstruction activity in the security sector. Thus, the Director looked for 

other means by which to execute high priority construction work for 

New Iraqi Army (NIA) facilities.151

Since P.L. 108-106 required that all work funded by IRRF 2 

be fully and openly competed, PMO investigated existing IDIQ 

construction contracts that met this competition requirement. In 

mid-December 2003, CPA officials approached the Air Force Center 

for Environmental Excellence (AFCEE), which had an IDIQ contract—the Worldwide Environmental Restoration and Construction (WERC) contract—to provide a wide range of construction 

and related services for U.S. military bases. In late 2003, the WERC 

contract had 27 qualified construction firms available to perform 
52 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

construction task orders, with a potential contracting capacity of $10 

billion.152

In December 2003, the Air Force Chief of Staff approved CPA’s 

request to use AFCEE’s services for Iraq reconstruction. Pursuant to 

PMO’s direction, AFCEE immediately began executing task orders 

under the WERC IDIQ contract for reconstruction projects in Iraq’s 

security sector. By the end of CPA’s tenure, AFCEE had undertaken 

more than $500 million in Iraq reconstruction work, with USACE 

providing oversight for the projects.

An AFCEE contracting staff member assigned to Baghdad 

described the contracting process:

when we get a request from a customer here in Iraq...they identify 

a requirement, we work with them to help define the requirement, 

they fund it, we send out...an announcement to all 27 contractors of 

what the scope is if they want to bid on it, then we do a best value 

determination, not low bid, and we award the contract...153

A July 2004 CPA Inspector General (CPA-IG)154 audit of task 

orders awarded by AFCEE at the request of CPA found that eight 

were beyond the scope of work approved by the Air Force Chief of 

Staff and the Joint Chiefs of Staff. Moreover, the CPA-IG found that 

these task orders provided “less than the necessary transparency to 

the public.” CPA-IG therefore called for a Memorandum of Agreement (MOA) to be signed between PCO (as PMO’s successor) and 

AFCEE to detail the roles and responsibilities of each organization 

and to address the scope of any new projects that AFCEE might 

undertake. This MOA was to be executed no later than August 15, 

2004.155 PCO and AFCEE, however, never executed the MOA.156

This continuing breach was resolved in June 2005, when AFCEE 

signed an MOA with the Multi-National Security Transition Com-
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 53

mand-Iraq (MNSTC-I), which had taken over security training 

and related contracting functions from the Project and Contracting 

Office (PMO’s successor) during the previous year. Among other 

things, the MOA required that AFCEE support MNSTC-I “within 

the scope of their pre-solicited IDIQ contracts.” The MOA also listed 

a variety of construction-related services that AFCEE may provide 

to MNSTC-I but noted that its services were “not limited” to those 

listed.157

CPA/DOD IRRF 2 Contracting Award Process

IRRF 2: Infrastructure Contracting Strategy

The complex strategy for contracting the core IRRF 2 infrastructure 

program had two main components: design-build construction contracts and program management contracts. PMO planned for twelve 

design-build cost-plus contracts to execute projects in six primary 

construction sectors: electrical; public works and water; security and 

justice; transportation and communications; buildings, housing and 

health; and oil. In addition, PMO planned for seven program management contracts—one to provide management of the entire program and six to provide supervisory management for the six sectors. 

Figure 2 indicates how the design-build program was organized.
54 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The Single Acquisition Management Plan 

The FAR requires that an acquisition plan be completed for all RFPs 

before issuance. In late 2003, a group of DoD contracting officials 

developed an IRRF 2 acquisition strategy, which was formalized into 

a single acquisition management plan (SAMP).158

The SAMP established the acquisition management approach and 

supporting strategy for IRRF 2 contracting. It provided the following 

processes: 

• Program management support: Two levels of oversight responsibility to govern reconstruction program management comprising: (1) total program management, which required one contractor to oversee management of the six reconstruction sectors, and 

(2) six Sector Program Management Offices (SPMO) to oversee 

the design-build contractors’ work within each sector.159

PMO 

Electricity 

Sector 

SPMO1

Electricity 

D-B2 Contracts 

Public Works/ 

Water Sector 

SPMO 

Public Works/ 

Water 

D-B Contracts 

Communication 

Transportation 

Sector 

SPMO 

Comm/ 

Transportation 

D-B Contracts 

Buildings/

Education/Health 

Sector 

SPMO 

Buildings/

Education/Health 

D-B Contracts 

Security/Justice 

Sector 

SPMO 

Security/Justice 

D-B Contracts 

Oil

Sector 

SPMO 

Oil

D-B Contracts 

Program Management Oce (PMO) Services Contract 

IRRF 2 Design-build Program Management Structure 

1 Sector Program Management Oce 

2 Design-build 

Figure 2
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 55

• Contract terms: Each design-build contract would have a twoyear base period followed by three one-year renewal options.160

The program management contracts would have one-year base 

periods, with two one-year renewal options.161

• Contract type: To facilitate the design-build construction program, a cost-plus IDIQ contract approach was selected, with issuance of task orders on either a cost-reimbursement or fixed-price 

basis (after definitization).162

• Single awards rather than multiple awards per sector: The 

SAMP outlined a single-award strategy for the IRRF 2 program, 

in which a single contractor would be awarded an IDIQ contract 

for a sector and all task orders issued under the contract would 

go to that contractor. The rationale for the single-award strategy 

was to limit costs for mobilization and demobilization of contractors by limiting the number of contractors. This was also expected to reduce contract administration costs and facilitate training 

and transfer of responsibilities to Iraqi managers.163 

• Conflict of interest avoidance: The SAMP restricted contractors 

from winning awards in the same sector for both SPMO services and design-build construction. Further, the contractor that 

received the umbrella management contract was restricted from 

winning any other program management or design-build construction contracts. The government reserved the right to restrict 

any contractor to a total of four contract awards.164

• Source selection authority: The SAMP provided a source selection authority for each sector.165 Some advocated for one authority to make award decisions for all sectors. However, this idea 

was rejected because broader participation by a variety of source 

selection boards and authorities would provide more transparency and greater competition.166
56 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The SAMP placed post-award procurement under the aegis of 

the HCA Office in Iraq.167 It also set out special provisions for firms 

working in Iraq, including security responsibilities,168 prohibitions 

on hiring or subcontracting to former members of the Ba’ath party,169

and limitations on the nationality of firms allowed to compete for 

contracts.170 Finally, the SAMP provided procedures for evaluating 

proposals and awarding contracts.171 After some delays caused by 

differing views on spending strategy, the SAMP was approved in late 

January 2004. 

Key Contracting Terms

Indefinite Delivery, Indefinite Quantity (IDIQ) contracts “provide 

for an indefinite quantity, within stated maximum and minimum 

limits, of specific supplies or services” to be furnished within an 

unspecified time period. Under these contracts, task orders are 

issued on either a cost-reimbursement (e.g., cost-plus) or fixedprice basis. 

Under fixed-price task orders, “payment is made to the contractor 

on the basis of pre-established prices.” 

Under cost-reimbursement task orders, the U.S. government 

reimburses the contractor for all allowable, allocable, and 

reasonable contract costs. Cost-reimbursement contracts are 

typically used in risky situations when the U.S. government is 

unable to provide sufficient information for offerors to accurately 

determine a competitive price.

Source: Ralph Nash, et.al., The Government Contracts Reference Book, 

Second Edition, 1998. 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 57

Standardizing the IRRF 2 Design-Build

Contract Solicitation

The SAMP provided separate source selection boards to manage 

the awards for each sector. The DoD planners devised the following 

structure for the awards’ process: 

• A source selection authority for each sector to make the final decision on contract award.

• A source selection committee for each sector tasked with providing information and recommendations to the sector’s source 

selection authority.

• Source selection advisory councils comprised of senior officials 

who provided counsel and advice to source selection authorities 

and participated in briefings and reviews. 

Standardization was essential because different authorities, in different branches of the services and at varying locales, were executing 

the solicitations. A senior DoD contracting official was designated to 

oversee selection operations, provide training for all staff involved, 

and monitor activities to ensure consistent practices for all the committees.172

IRRF 2 Design-Build Construction Contract Awards

All IRRF 2 construction sector proposals, except those in the oil 

sector, had to be submitted by February 5, 2004. (In the oil sector, 

competition began in the summer of 2003, with awards made in 

January of 2004).

After receiving the proposals, the source selection committees 

determined whether they complied with the solicitation’s administrative requirements and then assessed them according to the 

selection factors provided in the RFP. This included factors required 

by the FAR: technical capability, management expertise, past per-

 
58 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

formance, and cost effectiveness. The evaluators also assessed the 

bidders’ approach to a hypothetical mobilization order and a sample 

project task order.173 The committees then reviewed every proposal 

to assess which were the most competitive and provided the best 

value to the U.S. government. 

A SIGIR audit of the IRRF 2 contract solicitation process found 

that the source selection committees properly carried out their 

duties, individually evaluating proposals, consolidating individual 

assessments into consensus reports, and presenting them to the 

source selection authority for final decision. The source selection 

authority then made an independent evaluation of each proposal, 

which usually concurred with the source selection committee’s 

conclusions. If the authority disagreed with the source selection 

committee, it was required to “provide a reasonable rationale” for 

divergence.174 The source selection authority then made the final 

determination as to the award recipient. 

After the evaluation process, each source selection committee and 

source selection authority briefed the Deputy Assistant Secretary 

of the Army for Policy and Procurement on the award process. Of 

particular note, no protests were filed challenging any decisions by 

the IRRF 2 source selection authorities.175

The major IRRF 2 design-build construction and program management contract awards were announced in March 2004. After a 

series of delays, the required contract documentation began arriving 

in Baghdad at PMO in early April 2004. Table 2 lists information 

about selected IRRF 2 contracts.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 59

IRRF 2 – Selected Contracts

PMO Program Management Contracts

Solicitation 

Office

Contractor(s) Maximum Date 

Awarded

PMO Services PenRen* AECOM $50M 10-Mar-04

Electrical Sector PenRen Iraq Power Alliance 

JV (Parsons Energy 

and Chemical Group, 

Parsons Brinckerhoff 

– USA/UK)

$55M 10-Mar-04

Public Works/

Water

PenRen CH2M Hill and Parsons 

Water Infrastructure 

(USA)

$55M 10-Mar-04

Communications and 

Transportation

PenRen Berger/URS JV, (Louis 

Berger Group & URS 

Group 9USA))

$15M 10-Mar-04

Building Education 

and Health

PenRen Berger/URS JV, 

(Louis Berger Group 

& URS Group (USA))

$15M 10-Mar-04

Security and 

Justice

PenRen Berger/URS JV, 

(Louis Berger Group 

& URS Group (USA))

$30M 11-Mar-04
60 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

IRRF 2 – Selected Contracts

Oil PenRen Foster Wheeler (UK) $30M 10-Mar-04

Design-Build Construction Contracts

Solicitation 

Office

Contractor(s) Maximum Date 

Awarded

Electrical Sector 

Generation

Louisville 

District, USACE*

Fluor-Amec JV 

(USA/ UK)

$500M 11-Mar-04

Electrical Transmission 

& Distribution (North)

Louisville 

District, USACE

Washington 

International (USA)

$500M 12-Mar-04

Electrical Transmission 

& Distribution (South)

Louisville 

District, USACE

Perini Corp (USA) $500M 12-Mar-04

Public Works 

North

Navy Facilities 

Engineering 

Command

Fluor-Amec JV 

(USA/UK)

$600M 23-Mar-04

Public Works 

South

Navy Facilities 

Engineering 

Command

Fluor-Amec JV 

(USA/UK)

$500M 23-Mar-04

Water Resources Navy Facilities 

Engineering 

Command

Washington 

International & Black 

and Veach (USA)

$600M 11-Mar-04

Communications Army-CECOM 

Acquisition 

Center

Lucent Technologies 

World Services (USA)

$75M 23-Mar-04

Transportation Seattle District, 

USACE

Contrack/AICI/OIC/

Archirodon JV (USA, 

Egypt, Netherlands/

Panama/UAE)

$325M 23-Mar-04

Building 

Education 

and Health

Philadelphia 

District, USACE

Parsons Delaware 

(USA)

$500M 25-Mar-04

Security and 

Justice

Transatlantic 

Program 

Center, USACE

Parsons Delaware 

(USA)

$900M 26-Mar-04

Oil North USACE Parsons Iraq JV 

(USA/ Australia)

$800M 16-Jan-04

Oil South USACE KBR (USA) $1.2B 16-Jan-04

*Pentagon Renovation Office (PENREN), United States Army Corps of Engineers (USACE) Program Management, 

Construction as of March 2004. Modifications to contractors, sector, and award amounts are not represented. Source: 

DoD document, PMO Chart of Contracts, March 27, 2004; USACE document, “Frequently Asked Questions. USACE 

Missions-Oil Fire Suppression and Restoration of Production,” January 20, 2004 (online at: http://www.hq.usace.

army.mil/cepa/iraq/faq.htm, accessed April 25, 2006).
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 61

IRRF 2 – Selected Contracts

Bridge Contracts

Solicitation 

Office Contractor(s) Maximum Date Awarded

Bechtel National II 

(Infrastructure) USAID Bechtel $1.82B 4-Jan-04

Renovation of New 

Iraqi Army Facilities AFCEE† Earth Tech, Inc $65M 22-Jan-04

Renovation of New 

Iraqi Army Facilities AFCEE Shaw Environmental $75M 22-Jan-04

Renovation of New 

Iraqi Army Facilities AFCEE

Parsons 

Infrastructure & 

Technology Group

$33M 22-Jan-04

Renovation of New 

Iraqi Army Facilities AFCEE Weston Solutions $16M 22-Jan-04

† AFCEE awards were task orders under the Worldwide Environmental Restoration and 

Construction IDIQ contract. Above listing includes initial 4 awards. A total of 15 task orders were 

awarded as of May 31, 2004. Sources: SIGIR report, “Task Orders Awarded by AFCEE in Support of 

the Coalition Provisional Authority,” SIGIR 04-004, July 28, 2004; USAID document, “Contracts: 

Iraq Infrastructure Reconstruction Phase II,” (online at: http://www.usaid gov/iraq/contracts/iirii.

html, accessed April 25, 2006). 

Table 2
62 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

More on Design-Build Contracts

According to the design-build approach, a prime contractor would 

receive a task order from PMO directing it to carry out a specific 

project or set of projects. The contractor would then execute an 

initial field survey, develop a cost estimate, and provide it to PMO 

for review. After PMO’s approval, the contractor would accomplish 

the necessary design work, procure the materials, and manage the 

project’s construction.176 The prime contractor usually performed 

survey, design, and procurement work, but much of the actual construction work was carried out by sub-contractors (frequently Iraqi 

or Middle Eastern firms).

Although the initial design-build contracts were let as IDIQ costplus contracts, some of the contracts had clauses allowing for their 

conversion to firm fixed-price after a set percentage of design work 

had been completed. However, “this conversion was inexplicably not 

exercised by the government.”177 Subsequently, when the some of the 

contracts were renewed, the conversion requirement was removed.178

A senior DoD official offered this description of how the agencies 

awarded design-build contracts:

[There was] this large, large complex problem...trying to get a pipeline 

of people going in country. We needed a large capacity very quickly 

to do a large amount of projects that still needed to be definitized 

and shaped in order to even know what we were building and where 

we were going to build them. That’s where the design-build concept 

came into being with the IDIQ, so we could create capacity in different sectors of areas of expertise and then throw in the definitized 

requirements and award and get going. You had to award these large 

contracts in accordance with the FAR, somewhat of a traditional set of 

laws and regulations, and by deploying teams all across the country 

[i.e., the USA] across different agencies, they awarded 17 contracts, 

$5 billion in capacity, within 90 days and no protests at that time. 179
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 63

The Costs of Delay

The start-up of IRRF 2 projects lagged because of communication 

problems between the Iraq contracting team and the awarding 

offices in Washington, the slow response of contractors to get “boots 

on the ground,” the delay in issuing task orders, and the uncertainty 

created by the rapid deterioration of the security situation in Iraq.180

After the award of the design-build contracts, the prime contractors were pressured to move personnel and resources to Iraq rapidly 

to prepare for the flow of task orders that they expected would soon 

begin. But the task orders arrived more slowly than anticipated. 

There was great pressure on the design-build contractors to get [to 

Iraq] immediately. They were given a $2.5 million task order to mobilize, which was half of what was in our proposals, because [PMO 

wanted] us to mobilize to be able to perform on a given schedule at 

a given volume of work. And so we mobilized at full force and started 

spending mobilization money, and then the task orders did not 

come, but the mobilization costs kept growing, and we had nowhere 

to charge any more. Once we started getting task orders, they came 

in one or two at a time. [This happened from] the summer of 2004 to 

the fall of 2004.181

Contractors charged their “waiting costs” against their IDIQ 

contracts; thus, delays in task-order issuance resulted in charges for 

overhead with no work being carried out.182 This issue will be covered in greater depth in SIGIR’s next LLI report, Iraq Reconstruction: 

Lessons in Program and Project Management. 

Rising Security Costs and Issues

Security problems (and their proximate costs) began rising during 

early 2004, spiking dramatically in April 2004 when deadly conflict 

erupted in Falluja. Because of the increasingly dangerous environment in Iraq, the percentage of security-related contract costs even-
64 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

tually rose from under 10% to as much as 20%.183

Pre-award site assessments became more difficult to perform 

as security concerns increased. This created problems in defining 

project requirements and, in some cases, made project site selection impossible. The deteriorating security situation meant that 

contractors had to resort to historical data rather than field visits to 

accomplish site assessments. Contractors arriving at a project site 

selected via historical data frequently found that site conditions differed significantly from what they had expected. Over time, actual 

site visits increased, which mitigated the problem of second-hand 

assessments.184

From PMO to PCO

As planning for post-CPA reconstruction management developed, 

PMO’s role within the reconstruction program came under scrutiny.185 The issue was addressed directly by National Security Presidential Directive 36 (NSPD 36), which the President signed on May 11, 

2004. NSPD 36 directed the creation of the Project and Contracting 

Office (PCO), which supplanted PMO at the end of June 2004, and 

the establishment of the Iraq Reconstruction Management Office 

(IRMO) under the Department of State, which was assigned the 

responsibility to coordinate reconstruction priorities for the Ambassador. Most important, NSPD 36 designated the Ambassador as the 

strategic director and primary decision maker regarding Iraq reconstruction. PCO would “provide acquisition and project management 

support with respect to activities in Iraq, as requested by the Secretary of State and heads of other departments and agencies.”186

A few days after the issuance of NSPD 36, the Department of the 

Army, ostensibly to clarify lines of authority defined by NSPD 36, 

issued a memo reiterating the Army’s role in providing acquisition 

and program management support to the CPA and any successor 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 65

entity.187 On June 22, 2004, the Deputy Secretary of Defense issued a 

memorandum specifically establishing PCO “within the Department 

of the Army” to carry out these functions, including “support related 

to the close-out of the CPA.”188 Regardless of the intentions of these 

DoD directives, they tended to perpetuate the inter-departmental 

difficulties that NSPD 36 had sought to resolve.

The need to maintain continuity of oversight for ongoing reconstruction contracts and task orders meant that PCO and its affiliated 

HCA Office would remain under the Army’s control.189 The structure 

of contracting activity thus remained largely unchanged after CPA’s 

dissolution until the Joint Contracting Command–Iraq (JCC-I) was 

created in November 2004. JCC-I served as an umbrella contracting 

organization, overseeing both military and reconstruction contracting. See infra p. 76.

USAID’s Contracting Role in the CPA/IRRF 2 Period

USAID’s contracting role, prominent during the first phase of Iraq 

reconstruction, decreased during IRRF 2.190 Moreover, its relationship with DoD became strained, largely because DoD had functional 

control over most of the IRRF 2 reconstruction program. The tension arose in part because USAID believed that it should have had 

a greater role under the IRRF 2 program (as it had during IRRF 1), 

particularly in light of its institutional experience in post-conflict 

relief.191 USAID was allocated about $3 billion from IRRF 2, which 

was approximately one-third of what it requested.192

During this period, USAID issued four democracy-building 

grants, amounting to $126.3 million, to support the January 30, 2005 

elections. Other USAID awards included five cooperative agreements under its successful Community Action Program, totaling 

$275 million. Of note, USAID’s Office of Transition Initiatives 

(OTI)193 received more funding under IRRF 2 than it had under 
66 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

IRRF 1. As of November 2005, OTI had been allocated $340 million 

of IRRF 2 funds.194 New commitments to OTI reflected the growing 

demands for democracy-building and civic-development programs 

to support upcoming elections.195

The Bechtel II Award: Full and Open Competition

Most of USAID’s share of IRRF 2 funded the second Bechtel Infrastructure Rehabilitation and Reconstruction Program. Unlike 

Bechtel I, however, this new contract was awarded through full and 

open competition and in full compliance with the FAR.196 Only 

three firms submitted bids in response to USAID’s IRRF 2 RFP, one 

fewer than USAID’s IRRF 1 limited competition solicitation. On 

January 4, 2004, USAID awarded Bechtel its second large Iraq reconstruction contract, this one amounting to $1.823 billion. 

Bechtel II was intended to be a bridge between the infrastructure 

work begun under IRRF 1 and the design-build construction work 

that would be accomplished under IRRF 2. However, PMO’s delay 

in issuing task orders under this contract prevented the Bechtel II 

bridge concept from working effectively.197 Between January and 

March 2004, USAID received only 4 task orders under Bechtel II, 

amounting to a total of $180 million in work.198

It is unclear why PMO failed to use the Bechtel II contract as a 

bridge between the IRRF 1 and the IRRF 2 programs. According to 

PMO leadership, part of the reason was PMO’s desire to manage the 

entire IRRF 2 reconstruction effort as one program.199 Work under 

Bechtel II rapidly increased after March 2004, and by August 2004, 

USAID had obligated $1.4 billion under Bechtel II.

DoS Re-competes the DynCorp Contract 

DoS’s main contracting action during this period was the re-competing of the DynCorp contract for Iraq police training. The re-compe-
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 67

tition happened under the supervision of the DoS Bureau of International Narcotics and Law Enforcement Affairs (INL). The decision to 

re-compete was made after the original DynCorp contract reached 

its ceiling of $145 million. 

INL had always intended the initial police training contract, 

which was awarded through limited competition, to be an interim 

measure until a full and open competition could be held. DoS 

announced the re-competing of the contract in August 2003.200 This 

new global contract included work in Afghanistan as well as Iraq. 

DoS simultaneously published a statement of “Justification for Other 

Than Full and Open Competition”201 that allowed an extension of 

the DynCorp contract to permit ongoing reconstruction work to 

continue. 

In February 2004, DoS announced the award of the new police 

training contract. DynCorp was one of three recipients. Each firm 

was eligible to receive up to $1.5 billion over a 5-year period, with 

a guarantee that each would receive at least one task order. Of the 

three recipients, however, only DynCorp engaged in Iraq work. 

DynCorp also received a $188 million task order to continue the 

Baghdad portion of its support work it had begun under the first 

contact. 

NSPD 36 greatly diminished INL’s role in Iraq with respect to 

police training by directing CENTCOM to take charge of training all 

of Iraq’s security forces. CENTCOM then created the Multi-National 

Security Transition Command-Iraq, (MNSTC-I) to execute this mission. The CPA’s Civilian Police Assistance Training Team (CPATT) 

consequently fell under the management of MNSTC-I, and INL’s 

role was reduced to contract oversight for CPATT, including the 

DynCorp contract. Thus, after the dissolution of CPA, INL became 

a contract manager for police training, while MNSTC-I assumed the 

day-to-day operational direction, which was partially funded by the 

DynCorp contract.202
68 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The End of CPA

The CPA ceased operations on June 28, 2004, two days earlier than 

expected. Pursuant to NSPD 36, the Chief of Mission assumed leadership of the reconstruction program, “serving under the guidance 

of the Secretary of State and responsible for the direction, coordination, and supervision of all United States government employees, 

policies, and activities in country, except those under the command 

of an area military commander.”203

Post-CPA Contracting Developments

(June 2004 to the Present)—shift from 

design-build to direct contracting

On June 28, 2004, the CPA Administrator transferred sovereignty to 

the Iraq Interim Government (IIG). This action activated the provision of NSPD 36, creating the Project and Contracting Office (PCO) 

and Iraq Reconstruction Management Office (IRMO). The PMO 

Director continued on as the PCO Director until August 2004. 

A GAO review of the new structure provided the following 

description of IRMO and PCO:

The Presidential Directive established two temporary offices: The 

Iraq Reconstruction Management Office (IRMO) to facilitate transition of reconstruction efforts to Iraq; and the Project and Contracting Office (PCO) to facilitate acquisition and project management 

support for US-funded reconstruction projects. Iraq-based personnel 

from both offices are under U.S. Chief of Mission authority, although 

the U.S. Army funds, staffs and oversees the operations of PCO. 

IRMO is a State Department organization and its responsibilities 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 69

include strategic planning, prioritizing requirements, monitoring 

spending, and coordinating with the military commander. Under the 

authority of the U.S. Chief of Mission in Baghdad, the PCO’s responsibilities include contracting for and delivering services, supplies, 

and infrastructure.204

IRMO took on program coordination responsibilities, while PCO 

and U.S. Army Corps of Engineers-Gulf Region Division (USACEGRD) focused on project execution, picking up PMO’s management 

of task orders under the design-build contracts. USAID managed 

its own set of ongoing IRRF 2 projects, loosely coordinating with 

PCO.205

Problem Areas during the CPA/Embassy Transition 

During the spring of 2004, there was widespread concern within the 

U.S. governement about the slow progress of reconstruction work 

under the IRRF 2 program. This concern persisted into the summer 

of 2004, after PCO had replaced PMO. The slow issuance of task 

orders and the further deterioration of security conditions contributed to construction delays. In addition, the new procedures that the 

HCA Office initiated in February 2004 took time to implement, and 

problems in contract execution arose with the transfer of sovereignty 

engendered by the new level of influence exerted by Iraqi ministries 

over reconstruction decision-making. Some ministers were “holding 

contractors hostage” by threatening to break contracts they did not 

like.206 “Nobody was sure of the legal consequences for contracting 

during or after the transition,” either on the Iraqi or the American 

side.207
70 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Human Resource Issues 

Human resources remained an issue both before and after the 

transition from CPA to the Chief of Mission. Some of the persistent 

problems included: 

• short tours

• lack of adequate (or any) handoff time with replacement 

personnel

• varying tour lengths among personnel

• lack of standard contracting procedures

• inadequately qualified personnel

Many contracting officers did not have construction backgrounds, 

while others had only a “Level 1 Contracting Certification.”208 High 

turnover rates among HCA office personnel—at both the upper 

management and worker levels—resulted in shifting contract oversight, which increased costs and delays. The change in leadership of 

the PCO also caused delays in issuing task orders as new management became acclimated to its roles and responsibilities.209 For a 

detailed review of human resource problems, see SIGIR’s Lessons 

Learned in Iraq Reconstruction: Human Capital Management,

January 2006.

DFI Funds and Accelerated 

Iraqi Reconstruction Program

In April 2004, two months before CPA’s termination, the CPA 

Administrator directed the PMO to start using DFI funds to finance 

projects that could be “quickly implemented to improve the daily 

lives of the Iraqi people, by creating jobs and providing additional 

security.”210 CPA allocated these funds to the Commanders’ Emergency Response Program (CERP), as well as to the Accelerated Iraqi 

Reconstruction Program (AIRP).211
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 71

AIRP originally focused its efforts in ten cities: Baghdad, Ba’quba, 

Falluja, Mosul, Ramadi, Samarra, Tikrit, Najaf, Diwaniya, and 

Karbala.212 Teams of representatives from PMO, Coalition Joint 

Task Force 7 (CJTF-7), and the Ministry of Planning and Cooperation worked with officials in each city to identify priority projects. 

Some local officials focused on multiple, small-scale projects; others 

were more interested in implementing larger scale and longer-term 

efforts.213 CPA initially planned to put $500 million under contract 

via AIRP.214 However, the April 2005 DoS Section 2207 Report reveals 

that approximately $313 million was put under contract for 360 

projects, which were reportedly completed by July 2005.215

DFI Transfers to the Ministry of Finance

With the transition of sovereignty, CPA transferred responsibility for all unobligated DFI funds to the Iraqi Ministry of Finance. 

CPA and the Iraqi Ministry of Finance entered into an agreement 

to ensure the continued U.S. management of DFI-funded contracts 

that the CPA initiated before the transfer of sovereignty. The agreement directed the Chief of Mission and the Commander of the 

Multi-National Force-Iraq (MNF-I), successors to the CPA and the 

CJTF-7, to ensure the continued administration and payout of funds 

on contracts executed during the CPA period. The Chief of Mission 

and Commander MNF-I had no authority from the Iraqis to initiate 

any new contracts with DFI funds. The Iraqi Ministry of Finance 

provided these instructions regarding DFI contracts:

the powers, privileges, rights and authorities granted to you under 

this designation, shall be exercised in coordination with relative 

officials from the IIG and consistent with UN Resolution 1546 of 2004 

to satisfy outstanding obligations against the DFI. This designation 

does not authorize you to terminate, amend or novate any contracts

or grants covered by this designation. However, if requested by 

the IIG, you shall assist the IIG if it decides to terminate, amend or 

novate any such contract.216
72 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Slow Contracting Process: 

Security and Lack of Information 

A variety of obstacles slowed the progress of reconstruction contracting in the spring and summer of 2004.217

 The early project lists 

that constituted the first phase of the reconstruction program were, 

in many cases, place holders.218 This meant that PMO/PCO issued 

many task orders with insufficient information. The complex process 

of drafting task orders required the project manager, the SPMO program manager, and the HCA contracting officer to form a consensus 

on the contents of each task order. This caused bottlenecks in the 

execution process.219

When PMO/PCO initially awarded task orders they were often 

undefinitized (meaning their costs could not yet be concretely 

calculated). Contracting regulations allow for the government to 

award undefinitized task orders to allow necessary job performance 

to begin immediately.220 But by law, undefinitized task orders must 

be definitized within 180 days. PMO/PCO usually did not meet 

this 180-day definitization deadline. The failure to definitize contracts—essentially to come to a final agreement on what will be 

done, how much it will cost, and when it will be completed—significantly inhibited the government’s ability to control costs within the 

program and concomitantly reduced the incentive of contractors to 

minimize costs. 

There were a variety of reasons for PMO/PCO’s inability to 

definitize task orders in a timely fashion,including: 

• Security issues that made it difficult to travel to worksites. 

• The bundling of smaller projects into one task order. For example, construction or repair of 150 schools were bundled in one 

task order, which necessitated that contracting personnel visit all 

150 different sites to definitize the task order. 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 73

• Understaffing and heavy rotation of personnel in the contracting 

element. 

• Limited training or experience among program management 

personnel.221

The number of undefinitized contracts escalated over time. Then, 

as the number of ongoing projects grew, the backlog of task orders in 

need of definitization also grew, which threatened the PMO/PCO’s 

control over the total contract costs.222

Shift in Project Emphasis and Contracting Strategy

In the summer of 2004, the U.S. civil and military leadership agreed 

that “things needed to get moving” in the Iraq reconstruction 

program.223 PCO and USACE-GRD sought to expand the means 

of project execution beyond the design-build program, shifting 

emphasis to smaller, shorter-term projects, and to a new contracting approach. The shift meant that reconstruction projects would 

be delivered not only through the design-build process, but also 

through a variety of additional mechanisms, most notably, direct 

contracting with local or regional firms. 

Important changes in contracting strategy increased the number 

of entities involved in contracting, the variety of contracts used, and 

the kinds of contractors receiving contracts. The changes affected: 

• Contracting capability: PCO tapped into alternative contracting 

capabilities that could move work forward. For example, PCO 

asked the contracting arm of the USACE-GRD to start engaging 

in reconstruction contracting. Previously, USACE-GRD’s role 

in reconstruction was largely confined to project management 

and quality assurance. In addition, the USACE TransAtlantic 

Center in Winchester, Virginia, awarded several new contracts 

to support work in Iraq.224 Another new initiative called for Iraqi 
74 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

ministries to oversee projects through pilot grant programs that 

reimbursed the ministries as contractors completed work.

• Local and regional contractors: As reconstruction effort 

progressed, it became clear that large design-build contractors 

were not necessary to carry out certain construction projects or 

programs. Local or regional contractors were available, and their 

mobility was less restricted by security concerns. Indeed, from 

the outset, the design-build contractors had been subcontracting 

to this kind of contractor. Local companies thus were identified, 

and their management was trained by PCO in U.S. procurement 

processes. While there were some drawbacks to using Iraqi contractors, many Iraqi firms exceeded expectations.225

• Diverse contracting mechanisms: The HCA Office used fixedprice contracts when directly contracting with Iraqis. The HCA 

Office also used existing contracts with offshore entities, such as 

the USACE TransAtlantic Center IDIQ contracts and the AFCEE 

IDIQ. “Simplified acquisition” was also employed, pursuant to 

the FAR, to expedite contracting; it permitted fewer bids and had 

less burdensome cost data requirements. In the fall of 2004, Congress increased the allowable threshold for simplified acquisition 

from $500,000 to $1 million under the FY 2005 National Defense 

Authorization Act.226

• Organization of project work: To speed up definitization, the 

HCA Office broke down large projects into smaller elements.227

This ensured that the design-build contractors would engage in 

actual construction work, while the HCA Office continued to 

definitize larger aspects of the project. The Rapid Contracting 

Initiative was instituted to use local contractors to execute simple 

water projects, limited electrical distribution projects, and school 

construction.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 75

By mid-2004, the design-build program began to take hold; but 

it simultaneously began to lose its primacy. A SIGIR Government 

Contracting Lessons Learned Forum participant noted:

the added emphasis by [the] State Department [in late 2004] on 

generating more Iraqi employment started making a shift towards 

how much more work we can give to the Iraqis. There is a much 

larger percentage going to Iraqi firms [now], than when we started 

in year one. It shifted based on what we were learning out there and 

the desire is to get the Iraqis more involved. I think the start-off was 

correct because it got us up and running but it wasn’t a cure-all. 

Design-build wasn’t the single way to get all the work completed.228

It had become apparent that, while the design-build approach 

may have been appropriate for very large and complex infrastructure 

projects, it was not economically well-suited to simpler projects, 

especially when standard structures were needed in large numbers 

over a wide geographical area (like schools and clinics).229

Further Changes in Strategy and Structure 

By the end of 2004, the U.S. mission in Iraq continued to pursue a 

“more integrated management structure for projects and programs 

already underway.”230 The April 2005 DoS Section 2207 Report

described the program as changing its:

focus from longer range infrastructure development projects, as 

originally envisioned, to a plan providing for and sustaining a stable 

base of current infrastructure systems needed for short and intermediate range economic development. These moves [were] necessary not only because of the added operating complexity and cost 

caused by the continuing combat operations, but also because (1) 

the original estimate of the damage done to the basic infrastructure 
76 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

from decades of neglect and warfare was significantly underestimated; as a result, more time and resources [were] required to stand 

up and maintain systems than originally thought; and (2) the limited 

capacity of the Iraqi government to provide their own resources for 

near-term reconstruction.231

In February 2005, the Assistant Secretary of the Army for Acquisition, Logistics and Technology (ASA-ALT) requested a business 

plan from PCO leadership to consolidate the PCO into USACEGRD.232 PCO provided the plan a month later, which recognized 

USACE-GRD’s increasing role in the reconstruction program and 

helped streamline management of the overall reconstruction effort. 

The high costs associated with using civilian contractors as management personnel within PCO also shaped this decision.233 The merger 

of PCO into USACE-GRD occurred on December 4, 2005, and, with 

this transition, the USACE-GRD commander became the primary 

operational director of most reconstruction activity in Iraq. 

The Creation of the Joint Contracting Command-Iraq

In November 2004, the Joint Contracting Command-Iraq (JCC-I) 

was created. The need for it had become apparent in light of the 

absence of any central coordinating authority managing contracting 

in Iraq.234 Creating JCC-I had been under consideration since the 

release of an April 2004 white paper suggesting just such a reform. 

Concerns over who would be in charge of contracting had delayed 

the decision.235 The Army had been overseeing military contracting 

in Iraq and the majority of reconstruction contracting. But JCC-I 

merged both processes under one roof. The move also consolidated 

all contracting that had been scattered among the HCA Office, 

DCMA, and USACE-GRD. 

 An October 27, 2004 letter from the ASA-ALT designated the 

HCA for Iraq as the JCC-I commander and appointed two Principal 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 77

Assistants for Responsible Contracting (PARC), one who would 

supervise military contracting (PARC-Forces) and another who 

would oversee reconstruction contracting (PARC-Reconstruction). 

Fragmentary Order236 09-668, issued on November 12, 2004, formally created JCC-I, affirming the appointments of the two PARCs and 

the HCA as the JCC-I commander. USACE-GRD continued to use 

its own USACE PARC, based in Washington, D.C., with a forward 

contingent based in Iraq.237 

A second FRAGO subsequently provided the following directives, 

which further centralized contracting activity in JCC-I:

• Prioritize contracting activities: JCC-I should work with the 

military to ensure that their recommended projects have available funds and with the Ambassador to prioritize reconstruction 

work in each sector.

• Resolve contract disputes in theater: Contract disputes in theater should be resolved in theater and not in Washington.238

A number of other structural modifications were made to allow 

JCC-I to carry out its mission more effectively. For example, JCC-I 

was required to establish an audit trail to ensure that all contracting 

laws and regulations were met and to provide contract reporting 

requirements for all units attached to MNF-I and CENTCOM in 

Iraq. JCC-I was also directed to manage the DFI-funded contracts 

portfolio and train the Iraqi ministries on acquisition.239

USAID in the Post-CPA Contracting Environment

With the June 2004 transition of sovereignty from CPA to the IIG 

(and the Chief of Mission’s contemporaneous assumption of control 

over reconstruction), USAID contracting transitioned from focusing 

on emergency and humanitarian response to economic assistance 

and development. Moreover, USAID contracting staff believed that 

the Chief of Mission placed a greater emphasis on strategic planning, 
78 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

which resulted in more orderly procurements. This was in contrast 

to CPA, which was viewed by USAID as operating in a perpetual 

“emergency mode.”240

Senior USAID contracting staff continued to provide oversight 

from Washington, while the majority of new contracts were issued 

out of USAID’s Amman, Jordan office. Contract administrators 

continued to work in Baghdad to carry out a full range of postaward management functions. The decision to place contracting 

staff in both Jordan and Baghdad proved beneficial, because Jordan’s 

stable atmosphere enabled USAID to recruit more senior contracting staff for longer tours. But USAID, like other agencies, faced high 

staff turnover in Iraq. For example, one USAID Iraq contract had an 

estimated ten different contracting officers during its life.241

USAID’s Contracting Process

From the start of the reconstruction effort in Iraq, USAID used its 

website to provide information about reconstruction contracting. 

Information was posted about projects, including redacted contracts 

and pending procurement activities. Advertisements and solicitations for these activities were then posted on the website for government contracting (FedBizOpps). 

USAID’s procurement program for full and open competition 

followed this process:

1. After USAID made strategy and funding determinations, technical staff members defined the requirements for a specific contract 

and wrote a statement/scope of work (SOW). 

2. This SOW was approved, and a pre-solicitation notice was posted 

on FebBizOpps. 

3. USAID contracting staff then drafted the RFP, which included 

the SOW. Firms were given a specific period of time to submit a 

proposal. 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 79

4. Proposals were reviewed by both a technical and cost panel. Cost 

was scored based on “quality and reasonableness,” and the technical portion was scored based on the methodology defined in the 

RFP. 

5. The contracting officer reviewed the panel’s findings and ranked 

the submissions. 

6. Firms were then notified if they reached competitive range, and 

proposals were revised if necessary. 

7. The contract was awarded to the selected firm. 

8. Once the award was made, other competing firms were notified 

that they were not selected and were offered a debriefing session. 

The contracting office was responsible for ensuring the entire process was properly documented.242

P.L. 108-106 required IRRF 2 contracts to be awarded using full 

and open competition. This requirement applied to “any extension, 

amendment or modification of contract entered into before the 

enactment of this Act, using other than full and open competition 

procedures.”243 Pursuant to this statutory provision, USAID used 

Congressionally-mandated full and open competition when competing extensions, modifications, and follow-on awards to its initial 

contracts. Table 3 outlines some of these contracts, as well as other 

non-construction contracts and grants awarded during this period.
80 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

IRRF 2: Selected USAID Non-Construction Contracts and Grants

Solicitation 

Office Contractor(s) Maximum

Date 

Awarded

Education II USAID

Creative Associates, 

Inc $56.4M 7-Jul-04

Business Skills 

Training USAID

Volunteers in 

Economic Growth 

Alliance $12M 7-Jul-04

Consortium 

for Elections & 

Political Process 

Strengthening 

(II) USAID IRI & NDI $50M 7-Jul-04

Consortium 

for Elections & 

Political Process 

Strengthening 

(III) USAID IRI & NDI $35.7M 26-Jul-04

Consortium 

for Elections & 

Political Process 

Strengthening 

(IV) USAID IFES $40M 1-Sep-04

Private Sector 

Development USAID Bearing Point $184M 3-Sep-04

Vocational 

Education USAID Louis Berger $87M 27-Sep-04

Private Sector 

Development II USAID Louis Berger $119M 30-Sep-04

Local 

Governance II USAID

Research Triangle 

Institute $89M 9-May-05

Amounts are those listed at time of award. Subsequent modifications are not included 

in the chart. Sources: USAID documents, “Acquisition and Assistance Activities: Awarded Grants 

and Contracts” (online at: http://www.usaid.gov/iraq/activities.html#contracts, accessed 

April 25, 2006) and ”Contracts and Grants” (online at: http://www.usaid.gov/iraq/

contracts/, accessed April 25, 2006); SIGIR document, Quarterly Report to Congress. 

January 2006, Appendix I: List of Contracts. 

Table 3
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 81

special Contracting Programs: CERP and 

CHRRP (June 2003-Present)—Balancing

Rapid Response with Regulation

Most IRRF funding was used for design-build infrastructure projects, security forces training, and equipment procurement. The IRRF 

contracting strategy generally did not focus on supporting smaller 

projects at the local level that could provide immediate improvements in basic services. But U.S. military field commanders operating in Iraq noted the need for exactly this kind of localized project.

The Commander’s Emergency Response Program (CERP) was 

formally created by the CPA Administrator to contract, procure, and 

implement small projects in a short timeframe. A similar program, 

the Commanders Humanitarian Relief and Reconstruction Program (CHRRP), subsequently was developed by MNF-I to target 

reconstruction of water and sewerage services, primarily in Baghdad. CHRRP began nearly a year after CERP started, reportedly in 

large part because of CERP’s success.244 Of note, the two programs 

were not derived from legislative directives or military doctrine but 

from military commanders who recognized a compelling need and 

initiated the rapid development of agile reconstruction methods to 

address them. 

In hostile environments, the rapid provision of programs and 

projects that have a pacifying effect is essential, but complex contracting and procurement regulations can cause costly delays. CERP 

and CHRRP helped resolve this problem in Iraq by permitting military commanders to respond rapidly through simplified contracting 

processes and thereby mitigate the pressing humanitarian needs they 

encountered daily in the field. Both CERP and CHRRP succeeded in 

providing “some of the most important reconstruction efforts.” 245 
82 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

CERP and CHRRP had several key differences:

• CERP was implemented in Iraq and Afghanistan; CHRRP was 

only for projects in Iraq.

• CERP received far more funding than CHRRP—$1.4 billion for 

CERP vs. CHRRP’s $220 million in U.S and Iraqi funds.

• CERP was exempt from the FAR and other regulations;246

CHRRP was not. 

• CERP used a warranted contracting officer for any project of 

more than $200,000; CHRRP used a warranted contracting officer for any project of more than $2,500.

• CERP projects had a wide functional and geographic range of 

application; CHRRP focused on water and sewerage services in 

Baghdad.

Commander’s Emergency Response Program 

Two factors led to the creation of the CERP program. First, after the 

fall of Saddam Hussein, the need for sewerage system repair, garbage collection, and other basic civil administration services in Iraq 

became immediately apparent. Second, coalition forces confiscated 

hundreds of millions of dollars in cash that then became available 

for such projects. On May 7, 2003, Combined Joint Task Force-7 

authorized the “Brigade Commander’s Discretionary Recovery 

Program to Directly Benefit the Iraqi People” to use seized assets 

for rapid reconstruction projects. The initial allocation was approximately $180 million.247

On June 16, 2003, the CPA Administrator gave the incipient 

program its formal name (CERP) and provided regulations and an 

overarching direction for the use of funds. The CPA implementation memo authorized the Commander of the Coalition Forces to 

operate CERP,248 set a limit on the expenditure of seized funds, and 

established spending ceilings and transactional caps for commanders at different levels.249
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 83

CERP Goes Operational

On June 19, 2003, the Commander of Combined-Joint Task Force 7 

(CJTF-7) issued FRAGO 89, ordering CERP into operation. FRAGO 

89 states that CERP activities include, but are not limited to: 

water and sanitation infrastructure, food production and distribution, healthcare, education, telecommunications, projects in furtherance of economic, financial, management improvements, transportation, and initiatives which further restore the rule of law and effective 

governance, irrigation systems installation or restoration, day 

laborers to perform civic cleaning, purchase or repair of civic support 

vehicles, and repairs to civic or cultural facilities.250

In the program’s early stages, CERP funding came from seized 

assets and DFI. (CERP eventually received more than $368 million 

in funding from DFI.) The program subsequently received funding 

from IRRF 2 as well.251

Although commanders sometimes used CERP for larger-scale, 

strategic projects, its primary uses were tactical—projects with a 

short-term delivery and grassroots impact. The varying types of 

CERP projects are presented in Figure 3. The category with greatest 

funding—Other Reconstruction Projects—was primarily for condolence payments to Iraqi citizens.
84 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

The process of CERP project implementation was quite streamlined compared to that of typical IRRF projects. The contracting was 

executed as follows:

• U.S. commanders and local Iraqi leaders identified projects, 

developed scopes of work, estimated costs, and solicited 

contractors. 

• U.S. commanders nominated projects for CERP funding via an 

email to the CERP regional coordinating officer. 

• Approval depended on variables such as community need, 

geographic distribution, and potential project success. 

• The size of the award depended on the rank of the commander 

sponsoring the project. 

Other Humanitarian 

or Reconstruction Projects

Water and Sanitation

Law and Governance

Education

Civil Infrastructural

Activities

Transportation

Healthcare

Electricity

Economic, Financial,

Management

Agriculture & Irrigation

Telecom

Oil

955

Types of completed CERP Projects

(as of September 1, 2005)

Source: MNF-I, FY 2005 

These data have not been reviewed or audited.

728

517

372

233

203

167

114

2,371

2,266

648 1,774

692 1,661

1,345

1,120

666

655

433

274

43, 134

31, 98

Completed Total

Types of CERP Projects (as of September 1, 2005) 

Source: MNC-I, FY 2005252 These data have not been reviewed or audited.

Figure 3
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 85

Funding for CERP

By late 2003, appropriated U.S. dollars began to be allocated to the 

CERP program. Public Law 108-106 (IRRF 2) budgeted $180 million 

to CERP.253 And on August 5, 2004, P.L. 108-287 budgeted another 

$300 million to CERP for FY 2005.254 These laws required the Secretary of Defense to submit quarterly reports to Congress on the 

source, allocation, and use of CERP funds. 

CERP received further appropriations under P.L. 108-447 

(December 8, 2004) and P.L. 109-13 (May 11, 2005). This legislation 

increased CERP’s maximum funding, first to $500 million and then 

to $854 million ($136 million of it earmarked for Afghanistan).255 

Congress exempted these appropriated funds from standard contracting regulations, such as the FAR or DFARS.256

As of September 30, 2005, CERP had received more than $1.4 billion in funding for Iraq programs from the following sources:

• Seized Assets: $180 million 

• DFI: $368 million 

• U.S. Appropriations: $858 million 

In the National Defense Authorization Act for FY 2006, Congress 

gave DoD authority for FY 2006 and FY 2007 to use up to $500 million from its operations and maintenance funds for CERP in Iraq 

(and a similar program in Afghanistan). 257 These data are summarized in Table 4. 
86 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Total CERP Funding (In millions of $)

Total Program

Funding

Cumulative 

Funds Obligated

Cumulative 

Funds Expended

Seized Assets $180.2 $178.6 $177.1

IRRF 2 (P.L. 108- 106) 140.0 140.3 130.5

P.L. 109-13 718.0 718.0 333.2

DFI 368.1 360.1 353.2

FY 2006 Request 500.0 NA NA

Total* $1,406.3 $1,397.1 $994.0

Source: MNC-I, 2005 MNC-I, 2005258 * Total Excludes FY 2006 Request

Table 4

Regulations and Responsibilities

FRAGO 89 defined CERP’s operating regulations for military commanders. Pursuant to that FRAGO, the size of a command determined the limit of that commander’s contracting authority: brigadeand division-level commanders had contracting authority to spend 

up to $200,000 and $500,000 per project, with transaction limits of 

$50,000 and $100,000, respectively.259 Commanders had to report 

weekly to headquarters on CERP activity, providing dates, locations, 

amounts spent, and descriptions of projects. Commanders also 

had to appoint trained and certified project purchasing officers to 

document and follow purchase order procedures. These procedures 

included standard forms for purchases up to $100,000. Any purchase 

greater than $10,000 required:

• O–7/O–8 (i.e., Brigadier General /Major General) level commander oversight

• three competitive bids

• an identified project manager

• payment for services as progress occurred 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 87

In early November 2003, the passage of P.L. 108-287 exempted 

CERP from standard contracting requirements and left the regulation of funds to DoD. On November 25, 2003, the Under Secretary of Defense (Comptroller) (USD-C) issued guidance on using 

appropriated CERP funds. The USD-C stated the DoD’s intent to 

“preserve the same flexibility and responsiveness...maintained with 

the origi­nal CERP [under FRAGO 89 and CPA regulations].” The 

guidance assigned the Department of the Army as the Executive 

Agent for CERP and gave it the task of developing further operating procedures for use of the funds. USD-C directed CENTCOM 

to determine funding distribution.260 DoD’s financial management 

regulations were eventually amended to codify CERP policies, drawing from FRAGO 89 and the CPA requirements.

SIGIR and USAAA Audits of CERP

CERP funds have been subject to audits from various organizations.261 At the request of DoD OIG, SIGIR conducted an audit of 

CERP to determine whether funds were properly administered. 

SIGIR concluded that “while CERP-appropriated funds were properly used for intended purposes, overall controls over CERP processes 

required improvement.”262

In its audit, SIGIR found that:

• 58 of 74 projects reviewed did not have documentation showing 

that the commander obtained a contracting officer’s approval.

• 5 of 46 projects that exceeded a $10,000 threshold did not have 

the required three quotes from vendors.

• 19 of 46 projects did not have documentation of obtaining a fair 

and reasonable price.

• A budget officer inappropriately signed the Statement of Agent 

Officer’s Account form for more than $289 million.

In September 2005, the U.S. Army Audit Agency conducted an 
88 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

audit of CERP and found that “command personnel demonstrated 

adequate oversight over administrative processes and processed cash 

disbursements properly.” The audit found, however, that there were 

some deficiencies in carrying out required oversight responsibilities.263

Impact of CERP

CERP is widely viewed as a success story in Iraq reconstruction. 

Military commanders report that the “benefit received from CERP 

funds far outweighs the amount [of funds] provided. Funding minor 

efforts such as repairs to houses and buildings are helping to stabilize 

areas in Iraq.”264

Iraqis immediately felt the impact of CERP projects: thousands 

in Baghdad were employed by the program to clean streets, alleys, 

buildings, and public spaces. CERP projects also employed Iraqis to 

install hundreds of generators and air conditioners, as well as repair 

jails and police stations in and around Baghdad. In other parts of the 

country, CERP projects accomplished water and sewerage repairs 

that provided clean water and improved health for local Iraqis. 

CERP projects tended to be executed rapidly. For example, in the 

first 18 weeks of the program almost 1,800 CERP projects completed the repair of, among other things, bridges, roads, and schools. 

Northern Iraq was the site of a notable CERP initiative. In the fall of 

2003, the 101st Airborne Division partnered with the local population to complete more than 3,600 projects valued at $28 million. 

The projects included the refurbishment of more than 400 schools, 

employing more than 1,000 Iraqis in the process.265

The CERP program received significant praise during the SIGIR 

government contracting forum, with one USAID participant noting 

that:

Divisional Commanders told us that CERP money was as important as 

bullets because they could be used right away, [were] highly flexible, 

tactical as well as reconstruction. They loved it.266
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 89

Commanders Humanitarian Relief 

and Reconstruction Program 

When the Interim Iraqi Government began operations on June 28, 

2004, the MNC-I Commanding General asked the IIG Prime Minister to partner with MNF-I to support CERP by providing DFI funds 

for a number of proposed projects.267 The Deputy Prime Minister 

agreed to provide $86 million in IIG funds, with the proviso that the 

United States must match the Iraqi contributions.268 MNF-I agreed 

to use U.S. appropriated funds for this request, and designated this 

fund the “Commanders Humanitarian Relief and Reconstruction 

Program (CHRRP).” 

The October 2004 DoS Section 2207 Report contained the first 

mention of CHRRP and explained the difference between this program and CERP: 

Although CHRRP and CERP funds are both for requirements defined 

by military commanders in the field, the laws and implementing 

regulations governing their expenditure differ. Procurements using 

CHRRP funds must follow the federal acquisition regulations and 

provisions pertaining to full and open competition in Public Law 108-

106 for IRRF...specific focus of CHRRP is to provide urgent, essential 

water and sewage services with a primary focus on Baghdad.269

Additionally, the goal of CHRRP was to support labor-intensive, highimpact programs that generate employment, stimulate economic 

activity, and provide immediate assistance in areas targeted by 

insurgents.270

The January 2005 SIGIR Quarterly Report explained that $86 million was reallocated from IRRF security and law enforcement funds 

to the CHRRP program to match the IIG contribution. During 2004 
90 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

and early 2005, the Iraqi government transferred an additional $52 

million to support the CHRRP program. That brought total program 

funding from all sources to more than $220 million.271 This program 

also succeeded in rapidly producing hundreds of completed water 

and sewerage projects that benefited Iraqis in the Baghdad area.272

CHRRP Funding and Execution

Only the Multi-National Division-Baghdad (MND-B) and MultiNational Division-North Central (MND-NC) received CHRRP 

funds. To receive CHRRP money, the sponsoring command had to 

prepare a project proposal. For purchases of more than $2,500, the 

sponsoring command prepared a purchase request and commitment 

form and forwarded it to the contracting office. Purchases of less 

than $2,500 required only a purchase order form. CHRRP projects 

required a warranted contracting officer to execute any project above 

$2,500.

The DoS 2005 Section 2207 Reports highlighted CHRRP accomplishments. For example, completed CHRRP projects included:

• the completion of sewer line repair in Baghdad: $58,555

• seven water and sewer projects in Baghdad that focused on 

pumping stations and sewage line cleaning: $1.56 million

• renovation of the Al Jadriya Irrigation System in Baghdad: 

$869,000

• additional pump work at Pumping Station 14A in Baghdad: 

$45,635

• modification to the Baghdad Solid Waste Transfer Haul contract 

in Baghdad: $8.3 million273
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 91
92 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 93

Lessons Learned and Recommendations
94 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Lessons in Contracting from 

Iraq Reconstruction

Key Lessons Learned: Strategy and Planning 

•	 Include contracting and procurement personnel in all planning stages for post-conflict reconstruction operations. The 

pre-deployment interagency working groups for Iraq reconstruction did not adequately include contracting and procurement 

personnel. 

• Clearly define, properly allocate, and effectively communicate 

essential contracting and procurement roles and responsibilities to all participating agencies. The failure to define contracting and procurement roles and responsibilities at the outset of 

the Iraq endeavor resulted in a subsequently fragmented system, 

thus foreclosing opportunities for collaboration and coordination 

on contracting and procurement strategies. 

• Emphasize contracting methods that support smaller projects 

in the early phases of a contingency reconstruction effort. The 

Commander’s Emergency Response Program (CERP) and similar initiatives in Iraq proved the value of relatively small, rapidly 

executable projects that meet immediate local needs and thereby 

have the salutary effect of enhancing relations with local communities. 

• Generally avoid using sole-source and limited-competition 

contracting actions. These exceptional contracting actions 

should be used as necessary, but the emphasis must always be 

on full transparency in contracting and procurement. The use of 

sole-source and limited competition contracting in Iraq should 

have virtually ceased after hostilities ended (and previously 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 95

sole-sourced limited competition contracts should have been 

promptly re-bid). 

Key Lessons Learned: Policies and Process

• Establish a single set of simple contracting regulations and 

procedures that provide uniform direction to all contracting 

personnel in contingency environments. The contracting process in Iraq reconstruction suffered from the variety of regulations applied by diverse agencies, which caused inconsistencies 

and inefficiencies that inhibited management and oversight. CPA 

contracting developed CPA Memorandum 4 for contracts funded 

by the Development Fund for Iraq (DFI). Other agencies used 

the Federal Acquisition Regulation274 (FAR) and its supplements. 

Certain agencies used departmental regulations to modify their 

application of the FAR for contracting in Iraq. USAID used its 

own statutory authority for contingency contracting (within the 

FAR). 

• Develop deployable contracting and procurement systems 

before mobilizing for post-conflict efforts and test them to 

ensure that they can be effectively implemented in contingency situations. After reconstruction operations began in Iraq, 

contracting entities developed ad hoc operating systems and 

procedures for monitoring contracts and maintaining contracting and procurement histories; this limited contracting efficiency 

and led to inconsistent documentation of contracting actions.275

• Designate a single unified contracting entity to coordinate all 

contracting activity in theater. A unified contract review and 

approval point would help secure the maintenance of accurate 
96 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

information on all contracts, thereby enhancing management 

and oversight. 

• Ensure sufficient data collection and integration before developing contract or task order requirements. The lack of good 

requirements data slowed progress early in the reconstruction 

program.

• Avoid using expensive design-build contracts to execute small 

scale projects. While the use of large construction consortia may 

be appropriate for very extensive projects, most projects in Iraq 

were smaller and could have been executed through fixed-price 

direct contracting.

• Use operational assessment teams and audit teams to evaluate 

and provide suggested improvements to post-conflict reconstruction contracting processes and systems. Oversight entities 

should play a consultative role (along with their evaluative role), 

because the rapid pace of reconstruction contingency programs 

cannot easily accommodate the recommendations of long-term 

assessments or audits. 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 97

Recommendations

Recommendation 1:

Explore the creation of an enhanced Contingency FAR (CFAR). 

When the SIGIR met with the Commanding General of the MultiNational Forces-Iraq and told him of the contracting Lessons 

Learned Initiative, he observed that there was a compelling need for 

a single, simplified, and uniform contracting process for use during 

contingency operations. Although the existing FAR provides avenues 

for rapid contracting activity, the Iraq reconstruction experience 

suggests that the FAR lacks ease of use. Moreover, promoting greater 

uniformity through a single interagency CFAR could improve 

contracting and procurement practices in multi-agency contingency operations. An interagency working group led by DoD should 

explore developing a single set of simple and accessible contracting 

procedures for universal use in post-conflict reconstruction situations. Congress should take appropriate legislative action to implement the CFAR, once it is developed by the interagency working 

group.

Recommendation 2: 

Pursue the institutionalization of special contracting programs. 

In Iraq, smaller scale contracting programs, like the Commander’s 

Emergency Response Program (CERP) and the Commanders 

Humanitarian Relief and Reconstruction Program (CHRRP), 

achieved great success. Commanders used these programs to 

accomplish projects that immediately met the needs of a post-war 

population in distress. Given the positive performance of CERP 

and CHRRP in Iraq, the Congress should legislatively institutionalize such programs for easy implementation in future contingency 

operations. 
98 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Recommendation 3: 

Include contracting staff at all phases of planning for contingency 

operations. Contracting plays a central role in the execution of 

contingency operations, and thus it must be part of the pre-deployment planning process. Whether for stabilization or reconstruction 

operations, contracting officials help provide an accurate picture of 

the resources necessary to carry out the mission. 

Recommendation 4:

Create a deployable reserve corps of contracting personnel who 

are trained to execute rapid relief and reconstruction contracting during contingency operations. This contracting reserve corps 

could be coordinated by the DoS Office of the Coordinator for 

Reconstruction and Stabilization as part of its civilian ready reserve 

corps. An existing contingent of contracting professionals, trained in 

the use of the CFAR and other aspects of contingency contracting, 

could maximize contracting efficiency in a contingency environment. 

Recommendation 5:

Develop and implement information systems for managing 

contracting and procurement in contingency operations. The 

interagency working group that explores the CFAR should also 

review current contracting and procurement information systems 

and develop guidelines and processes for enhancing these existing 

systems or, if necessary, creating new ones to meet unique contingency operational needs. 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 99

Recommendation 6:

Pre-compete and pre-qualify a diverse pool of contractors with 

expertise in specialized reconstruction areas. These contractors 

should receive initial reconstruction contracts during the start-up 

phase of a post-conflict reconstruction event. 
100 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 101

Appendices
102 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Appendix A: Requested Changes to 

the Federal Acquisition Regulation

SIGIR research shows that throughout the Iraq experience there has 

been debate about whether the Federal Acquisition Regulation276

(FAR) provides appropriate flexibilities for the fast-paced contracting required in conflict/post-conflict environments like Iraq. This 

debate continues. What is clear, however, is that after more than a 

year of contracting in Iraq, staff at different U.S. agencies in the 

fall of 2004 felt compelled to ask for relief from various FAR 

requirements. 

At that time, an interagency effort coordinated through IRMO 

requested changes to the FAR for use in Iraq contracting. The organizations making requests included PCO, MNF-I and entities under 

its command, USAID, and USACE-GRD. The Chief of Mission in 

Iraq sent more than 20 proposed changes in a cable to the Secretary 

of State on October 4, 2004. The Secretary of State provided interagency responses to the requests on October 14, 2004, and October 

27, 2004. These communications are summarized in Table A-1. 

A review of the requested changes provides insight into the differing concerns of staff at various agencies working in Iraq, as well as 

their level of awareness of existing FAR flexibilities. Additionally, the 

responses highlight that the levels of flexibility allowed to contracting staff sometimes differed from agency to agency. Finally, although 

some of the flexibilities requested by agencies technically already 

existed in the FAR, some sources have told SIGIR that the process 

necessary to justify, document, and act on these flexibilities is too 

cumbersome and time-consuming to be practical in a contingency 

environment.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 103

For example, many of USAID’s requests for changes related specifically to contractor insurance rather than to more general issues 

with the FAR. USAID did not feel particularly constrained by FAR 

regulations, said one SIGIR interviewee, perhaps due to the degree 

of pre-planning they undertook for their contracts.277

Instead, some of USAID’s suggested changes proposed the 

inclusion in contracts of contractors’ costs for accidental death and 

dismemberment insurance and additional war risk insurance. The 

interagency response to these requests indicated that contracting 

officers had the flexibility to construct insurance as an allowable cost 

within individual contracts. However, the response also recognized 

the larger issues of insurance availability, as it indicated that the (lack 

of) availability of such insurance was an issue being addressed by an 

interagency working group. 

In contrast, PCO’s requests focused on increasing dollar thresholds for micro-purchases and reducing the length of notification 

time required for particular solicitation processes. The response to 

the PCO’s notification request indicated that authority for this process already existed; however, the threshold request was addressed in 

the FY 2005 National Defense Authorization Act. 

In addition to the requests made through IRMO, the HCA in 

Iraq also made requests directly to the Deputy Assistant Secretary 

of the Army (Policy and Procurement). Conversely, a DoS contracting official informed SIGIR that DoS has not requested any waivers 

outside of those allowed in the FAR or the DoS supplement to the 

FAR, known as the DOSAR.278

Table 5 provides a limited sample of excerpts from agency requests 

for changes in contracting regulations in Iraq during the fall of 2004, 

and the resulting interagency responses.279 They reflect only this time 

period and only the agencies involved in the communications. 
104 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Written comments to SIGIR from DoD contracting officials 

regarding these fall 2004 communications suggest that both the 

requestors and responders may have been unaware of the existing 

flexibilities in the FAR. They may also have been unaware of waivers 

previously enacted, or other actions underway, to provide greater 

contracting flexibility.280 Ensuring broad knowledge of contracting 

regulations pertinent to post-conflict contracting, as well as improving forward-rear and interagency visibility of activities underway 

would increase contracting flexibility. This in turn would assist 

contracting personnel in pre-stabilization or post-conflict environments to more effectively use all of the contracting mechanisms at 

their disposal.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 105

Requested Changes to the FAR from Iraq-based Staff and Interagency Responses (October 2004)*Request from Staff in Iraq Requesting Agency Interagency ResponseIncrease the Simplified Acquisition Threshold to $1 million** MNSTC-I (MNF-I)

“The requested increase...is included in the final version of FY 05 National Defense Authorization Act, which will become law on signature by the President.”***

Increase the Micro-purchase Threshold to $25,000 PCO

“The requested increase...is included in the final version of FY 05 National Defense Authorization Act, which will become law on signature by the President.”

Waive the requirement for Performance and Payment Bonds of more than $100,000 USACE-GRD “DoD, USAID and DoS concur that authority already exists under FAR 28.102-1 for the Contracting Officer to waive this requirement.” Equipment Risk of Loss. Make additional war risk insurance available; if not available, U.S. should accept equipment at border

USAID

“State, USAID, and DoD concur that flexibility currently exists to reimburse contractors for war risk insurance if it is available. The reasonableness of cost is a determination of each contract.” “An interagency insurance working group [exists] to interact with the insurance industry and contractor associations on the larger issue of insurance availability.”

Limit price reasonableness determinations to commercial standard for subcontractors USACE-GRD

“State, USAID, and DoD concur that contracting officers already have the authority you seek, and Washington encourages Contracting Officers to use this authority in accordance with the FAR requirements to expedite reconstruction activities.”

Reduce combined commercial synopsis/solicitation time from 15 to 7 days PCO****

“Agency Heads can already waive the 15-day requirement.” “DoS currently has a waiver in effect for DoS procurement up to $5 million, as does USAID.” “DoD regulations permit this waiver, using existing authorities. General authorities regarding synopsizing exist in regulation. The Army, as Executive Agency for contracting in Iraq is the waiver authority for DoD.” 
106 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement Requested Changes to the FAR from Iraq-based Staff and Interagency Responses (October 2004)* Request from Staff in Iraq Requesting Agency Interagency Response Revise the Determination and Findings (D&F) for waiver of Trade Agreements Act and Balance of Payments Act HCA “New D&Fs are awaiting [Deputy Secretary of Defense] signature, after having undergone a thorough DoD and interagency coordination process.” Sources: *Information included in the table was taken from a summary of communications between IRMO and the Department of State, which coordinated Baghdad-based and Washington-based interaction on contracting concerns during the fall of 2004. See Iraq Project and Contracting Office document, “Chronology of Cables,” October 2004; IRMO memo, “Peace Time Rules in a Wartime Environment: Summary of Federal Acquisition Regulation (FAR),” September 24, 2004 **Simplified Acquisition and Micro-Purchase procedures are streamlined acquisition methods that are allowable below certain dollar thresholds. These requests were to increase the dollar value of purchases that could be made using these procedures. ***President George W. Bush signed the National Defense Authorization Act Fiscal Year 2005 (P.L. 108-375) in October 2004. Changes to the Simplified Acquisition and Micro-purchase thresholds were covered in Section 822 of the act (online at: http://www.defenselink.mil/dodgc/olc/docs/PL108-375.pdf, accessed April 25, 2006). **** Written comments from DoD officials indicate that waivers of the Trade Agreements Act and Balance of Payments Program were issued in “Determination and Findings” documents by the Deputy Secretary of Defense in June 2003. (See DoD memo, Deputy Secretary of Defense, “Findings and Determination: Exemption from Balance of Payments Program,” June 16, 2003; DoD memo, “Findings and Determination: Waiver of the 

Procurement Prohibition of Section 203(a) of the Trade Agreements Act of 1979, as amended.” June 16, 2003. According to these sources, no new related waivers have been granted since that date. See DoD officials, written comments to SIGIR, March 10, 2006.

Table 5
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 107

Appendix B:

Trends in the Acquisition Workforce

Workforce Trends: Skills and Numbers

An April 2003 GAO report, Federal Procurement: Spending and 

Workforce Trends, reported that while federal contracting increased 

by 11% between 1997 and 2001, the federal acquisition workforce 

decreased by 5%. The report notes that the decline in the acquisition 

workforce varied by agency. DoD experienced the largest decrease—

about 9%.281

A senior official at the OMB Office of Federal Procurement Policy 

provided an explanation of this trend. During the 1990s, there was a 

major acquisition reform movement in the U.S. government. It was 

believed that the increased use of technology and more efficient contracting vehicles, including the use of the purchase card, could result 

in a decrease of the acquisition workforce.282

GAO reported that these 1990 reforms created a need for an 

expanded skill set among acquisition personnel: 

Over the last decade, the federal acquisition workforce has had to 

adapt to changes in staffing levels, workloads, and the need for 

new skill sets. Procurement reforms have placed unprecedented 

demands on the acquisition workforce. For example, contracting 

specialists are required to have a greater knowledge of market conditions, industry trends, and the technical details of the commodities 

and services they procure.283

During the last several years, policies were issued to improve the 

management and training of acquisition workforce, including the 

Defense Acquisition Workforce Improvement Act, 1990, and the 

Services Acquisition Reform Act (SARA), 2003. More recently, Policy Letter 05-01, dated April 15, 2005, was issued by the OMB Office 
108 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

of Federal Procurement Policy. This policy letter “broadens the 

definition of acquisition workforce, expands duties of the agencies 

acquisition workforce manager, aligns civilian and defense acquisition workforce requirements...and increases continuous learning 

requirements.”284 The office also has launched a certification program 

that uses DoD modules as a standard for all acquisition personnel.285

Skills and Numbers: Effect in Iraq

In Iraq, acquisition numbers and skills seemed to be a challenge 

for DoD, USAID, and to a lesser extent, DoS, especially early in the 

reconstruction effort.

A senior DoD official stressed the importance of deploying with 

people who had proper skill sets, but felt that not everyone working 

with PMO had the “right skills to do the work in Iraq.”286 This official 

also noted that there was high turnover, especially among the legal 

support. He said that many of the lawyers did not have contracting 

backgrounds or the temperament and experience to work in a war 

zone. Instead, they were all trying to learn on the job.287

Another senior DoD official mirrored these opinions. He felt 

that some contracting staff lacked experience in large construction contracts. He said deployment was tied to the need to “have a 

warm body” and not necessarily to skills. However, he said that most 

people learned very quickly.288 This official asserted that, “until we 

get a larger acquisition/contracting workforce, we will never resolve 

the deployment resources issue.”289

A senior member of the USAID acquisition staff reflected on 

human resource challenges:

I was proud of the way we handled the procurements and of our 

taking a strong stand on the need for competition. The biggest area 

of concern from my perspective was the lack of senior talent. I had to 

handle complex and politically sensitive contracts totaling multi-mil-
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 109

lion dollars. We obviously put senior talent on the initial contracts, 

but as things started to move faster, and people became engaged on 

the award of earlier actions, we were forced to move to less senior 

contract specialist with tight oversight by a more senior contracting 

officer. This is perfectly o.k., and is the way junior contracting talent 

is developed. However, with such politically sensitive actions, I wanted only the best talent available, and I found myself having to assign 

people that may not have worked on multi-million dollar contracts 

under intense pressure to be awarded ASAP. I believe we helped 

grow USAID’s contractual talent base considerably during this time, 

and that is good. However, I did not want younger talent learning on 

the job...I wanted senior contracting officers with 25 years of experience and we found them difficult to find in Washington.290

In the last two years, USAID has been able to increase its overall 

acquisition staff, and this is reflected in the number of contracting 

staff assigned to the Iraq effort. In 2004, USAID had 306 contracting officers and specialists; in 2005, this number grew to 358.291

A USAID official described some of the reasons for this increase. 

He said that “after years of efforts, the Office of Acquisition and 

Assistance (OAA) obtained the resources in FY 2005 to fill vacancies that had gone long unfilled. Filling these vacancies has helped 

OAA reduce vulnerabilities caused by its previous understaffing.”292

In 2004, the USAID Iraq office (Baghdad and Amman, Jordan) had 

six contracting officers and specialists. In 2005 this number grew to 

nine.293

A senior DoS contracting official told SIGIR that, in general, DoS 

had the “right” number of contracting staff. However, this individual 

indicated that a number of people will be eligible for retirement in 

the next several years; therefore, hiring and developing the next generation of DoS contracting officers is of special importance.294
110 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Appendix C: 

Recent Developments in Contracting

for Contingencies/Emergencies

More than three years have passed since the first contracts related to 

Iraq reconstruction were awarded. Modifications have been made to 

improve contracting, and lessons from the Iraq experience continue 

to inform new initiatives to improve U.S. readiness for contracting 

in contingency and post-conflict environments. This appendix offers 

details of recent developments.

Joint Policy on Contingency Contracting

Contingency contracting takes place during “an event which requires 

the deployment of military forces in response to natural disasters, 

terrorist or subversive activities, collapse of law and order, political 

instability, or other military operations...[and which] requires plans 

for rapid response and procedures to ensure the safety and readiness 

of personnel, installations, and equipment”295

The National Defense Authorization Act for FY 2006 requires 

the Secretary of Defense, in consultation with the Chairman of the 

Joint Chiefs of Staff, to develop a joint policy among all the military 

services for contingency contracting during combat and post-conflict operations. 

The joint policy is to include, at a minimum, an organizational 

approach to contingency contracting, provision and maintenance 

of a training program for contingency contracting personnel,296 and 

“such steps as may be needed to ensure jointness and cross-service 

coordination in the area of contingency contracting.”297
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 111

Contractors on the Battlefield

A recent House of Representatives bill aimed at establishing specific 

requirements for contractors on the battlefield, including those who 

do not accompany military forces, did not win Senate approval. 

However, earlier in 2005, DoD issued regulations addressing 

requirements for contractors accompanying the military, as directed 

under section 1205 of the Ronald W. Reagan National Defense 

Authorization Act for FY 2005 (P.L. 108-375). House and Senate 

conferees instructed DoD to revise this guidance to include contractors or subcontractors:

...at any tier under a contract with any federal government agency, 

if the work to be performed is related to:

• private security

• reconstruction

• humanitarian assistance

• peacekeeping

• other activities in an area of responsibility of a commander of a 

combatant command in which there are ongoing combat operations 

or there is a significant risk that contractor employees could come 

under hostile fire. 298

The revisions are to address, among other things, the issues of 

force protection, weapons issuance, security, visibility and accountability, and provision of threat information to contractors not 

accompanying the force. 

Contracting Guides 

DoD

The Deputy Secretary of the Army for Policy and Procurement is 

currently preparing two guidebooks for contingency contracting: 

The Army Guidebook for OCONUS Contingency Contracting and 
112 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

CONUS Guide for Supporting Emergencies within the United States 

and Supporting Overseas Contingencies from CONUS Locations. 

The guidebooks are not training manuals, but rather refreshers 

for those who have already been trained in contingency contracting 

procedures. An official involved in the creation of the documents 

noted that the aim was twofold: 

• to “fill in the gaps” of information highlighted by personnel who 

worked in Iraq and other recent contingencies 

• to help contracting personnel focus on how they will need to 

operate differently in a contingency environment 

As their primary source, the draft guidebooks use a Special 

Operations Command (SOCOM) compendium of contracting 

documents (pertinent regulations, procedures, and guidance) for use 

by SOCOM contracting officers. The guidebooks also draw on the 

Air Force Guidebook on Contingency Contracting and other materials 

for samples that contracting officers can refer to, highlighting established procedures and regulations, as well as special provisions that 

may need to be considered in different types of contingency situations. The draft documents also address some of the tactical-level 

challenges that contracting personnel have relayed to SIGIR during 

interviews.299

Both draft guidebooks outline wartime regulations, approval 

levels and thresholds triggered by contingency declaration, as well 

as information on relationships with contractors and planning 

for contingency contracting. The draft OCONUS guidebook also 

contains information for “customers” on how to write requirements, 

and includes a copy of CPA Memo 4 as a sample policy for use when 

procuring with seized funds. 

The draft OCONUS guidebook makes reference to relief from 

regulatory requirements that certain contingencies may demand, 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 113

and contains sample documents, memos, and checklists for a wide 

variety of items. An official familiar with the draft guides informed 

SIGIR that DoD and DASA P&P are developing standby packages 

of waivers, documentation, and other mechanisms to initiate relief 

from regulatory requirements. DASA P&P plans to release the 

documents on the Army Contracting Agency (ACA) website and to 

make them available to contracting personnel deploying to work on 

contingencies. 

USAID and DoS

A USAID contracting official informed SIGIR that his agency does 

not have such a guidebook, nor is one planned. Rather, the agency’s 

practice is to set up a task force for each emergency or assistance 

situation in which it works. A memorandum establishes and outlines 

the task force, special authorizations or waivers, and contracting 

procedures.300 Such a memo was created for Iraq. Because of experiences in Iraq, task forces set up for complex environments will 

include representatives from all relevant bureaus, including procurement and contracting staff. Also, the task forces now work to ensure 

that planning for relief and reconstruction is undertaken as an 

interdepartmental effort.301

A DoS contracting official told SIGIR that DoS has not found a 

need to provide any unique training to its contracting personnel for 

contracting in contingency environments. He noted that, to a large 

extent, DoS personnel contracted in Iraq as they would elsewhere—

construction of the embassy, purchasing supplies and materials for 

staff, etc.302 With the exception of early contracts awarded by DoS for 

police sector reconstruction, this statement is supported by SIGIR 

research.
114 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Appendix D: 

Organizational Vetting Comments

SIGIR circulated a draft of its contracting lessons learned paper to 

a number of U.S. government organizations to obtain their official views on SIGIR’s findings, particularly the recommendations. 

Although most vetting comments have been incorporated into the 

body of the report, SIGIR has placed the following comments in 

this appendix because they represent dissenting views or provided 

important qualifications concerning SIGIR’s overall recommendations. 

Several organizations responded to Recommendation 1, “Explore 

the creation of an enhanced Contingency FAR (CFAR),” indicating that they did not believe a formal enhanced Contingency FAR 

(CFAR) was necessary, and that current FAR provisions, properly 

understood and/or appropriately altered, would be sufficient. 

The Department of State’s Office of Acquisition Management 

(DoS-AQM) indicated that it did not believe there was a need for an 

enhanced Contingency FAR, stating that the current FAR provides 

“flexibility in multiple areas depending on the type of contracting” 

The office suggested additional training for contracting personnel in 

existing flexibilities to remedy current problems. DOS-AQM suggested altering audit standards to include consideration of unusual 

conditions in contingency operations to alleviate reluctance to use 

waivers and special provisions.303

The White House Office of Management and Budget – Office of 

Federal Procurement Policy (OMB-OFPP) did not specifically state 

that an enhanced CFAR was unnecessary, but told SIGIR that it did 

not believe that legislative changes are needed at this time. OMBOFPP pointed out that the FAR council is making a “significant 

effort” to create new emergency acquisitions regulations in order 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 115

to consolidate emergency procurement authorities for contingency 

operations. 

Similarly, the Office of the Under Secretary of Defense-Acquisition, Technology, and Logistics (OUSD-ATL) described the “real 

issue as the need to have a useable, straight-forward compilation of 

existing regulations and applicable flexibilities...” with personnel 

appropriately trained before deployment to use these provisions.304

USAID/Iraq stated that rather than focus on the creation of a 

“special FAR,” consideration might be given to “a better delegation of 

authority within the US Government.” This would “authorize departments/agencies to implement clearly defined objectives,” and gives 

them “the budget and operational control to execute.”305

For Recommendation 4, “Create a deployable reserve corps of contracting personnel...,” the OUSD-ATL told SIGIR that they supported 

this recommendation, provided that corps personnel “...are part of 

existing contracting operations, where they can ply their skills on an 

ongoing basis before deployment.”306

OUSD-ATL also responded to Recommendation 6,“Pre-compete 

and pre-qualify a diverse pool of contractors with expertise in specialized reconstruction areas,” stating that such a program would be most 

useful if done relatively soon before deployment.307
116 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

1. On June 22, 2006, the Deputy Secretary of Defense commendably responded to 

the draft recommendations in this report by announcing the formation of a Task 

Force to Support Improved DoD Contracting and Stability Operations in Iraq. The 

task force is charged with evaluating DoD processes and systems in Iraq affecting 

contracting, logistics and financial management, among other areas, and will 

provide recommendations and implementation plans to the Deputy Secretary of 

Defense on:

• Deployment of a common system and business process for contingency 

contract management in Iraq 

• Establishment of appropriate contracting authority for CENTCOM 

• Policy and processes to ensure the effective and rapid utilization of CERP 

• Potential changes to the FAR and DFARS to address future contingency 

operations 

• Appropriate legislative strategies to address statutory issues impacting 

contingency contracting capability

This dynamic responsiveness by DoD will enable Iraq reconstruction contracting 

lessons learned to be immediately applied to the current situation in Iraq.

2. See e.g. Senior USAID official, interview, November 2, 2005; Former senior DoD 

contracting official, interview, January 20, 2006. 

3. U.S. Army Materiel Command document, “LOGCAP: Who and Where We Are,” 

October 8, 2004 (online at: http://www.amc.army.mil/LOGCAP/WhoWhere1.html, 

accessed April 24, 2006). 

4. MAJ M. Salah Ehab, CPT Dawn M. Cox et al, “Logisticians Don’t Always Wear 

Green – Contractors as Force Multipliers,” Staff of the Quartermaster Professional 

Bulletin, summer 1999 (online at: http://www.quartermaster.army.mil/oqmg/

professional_bulletin/1999/summer1999/Contractors%20as%20Force%20Multiplie

rs.htm, accessed April 24, 2006). 

5. Donald L. Trautner, “A Personal Account and Perspective of the U.S. Army Logistics 

Civil Augmentation Program (LOGCAP),” 2004 Conference of Army Historians, 

July 15, 2004. 

6. GAO report, “Defense Logistics: High-Level DoD Coordination is Needed to 

Further Improve Management of Army’s LOGCAP Contract,” GAO-05-328, March 

2005. 

7. DoD official, SIGIR Lessons Learned Forum: Contracting I, Washington D.C., 

December 5, 2005, (transcript pp. 51-53).

8. Ibid., p. 54. 

Endnotes
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 117

9. Ibid., p. 54.

10. DoD official, written comments to SIGIR, March 10, 2006. 

11. DoD official, written comments to SIGIR, June23, 2006.

12. DoD former senior contracting official, interview, January 20, 2006.

13. GAO report, “Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and 

Management,” GAO- 04-605, June 2004, pp. 19-20.

14. Ibid, p. 20.

15. These groups included the: Interagency Iraq Political-Military Cell; Interagency 

Executive Steering Group; Interagency Humanitarian/Reconstruction Group; 

Interagency Energy Infrastructure Working Group; Interagency Coalition Working 

Group; and Office of Global Communications (Source, Air War College, “Pre-war 

Planning for Post-war Iraq” (online at http://www.au.af.mil/au/awc/awcgate/dod/

postwar_iraq.htm, accessed on July 6, 2006).

16. OMB Director, testimony before the U.S. Senate Foreign Relations Committee, 

July 29, 2003, (online at: http://www.defenselink.mil/speeches/2003/sp20030729-

depsecdef0385.html, accessed April 24, 2006).

17. GAO report, “Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and 

Management,” GAO-04-605, June 2004, p. 7. 

18. USAID document, “USAID Consultations on Iraq Contingency Planning,” 

February 24, 2003, (online at: http://pdf.dec.org/pdf_docs/PDABY342.pdf, accessed 

April 24, 2006). 

19. Former senior ORHA official, interview, March 30, 2004. 

20. Senior DoD official, SIGIR Lessons Learned Forum: Contracting I, Washington, 

D.C., December 5, 2005 (transcript, pp. 33-34).

21. Contract Statement of Work, Iraqi Oil Infrastructure Additional Pre-positioning of 

Fire Fighting, Rapid Response, Damage Assessment and Oil Spill Assessment and 

Response Teams, March 10, 2003. Declassified on April 22, 2004.

22. USACE official, written comments to SIGIR, March 20, 2006. 

23. USACE document, “Frequently Asked Questions: Engineer Support to Operation 

Iraqi Freedom. USACE Missions – Oil Fire Suppression and Restoration of 

Production,” updated January 20, 2004 (online at: http://www.hq.usace.army.mil/

cepa/iraq/faq.htm, accessed April 24, 2006).

24. The FAR is the body of regulation used by federal executive agencies for acquiring 

supplies and services with appropriated funds. Additionally, DoD, USAID, and DoS 

have specific supplements to the FAR.

25. USACE document, “Frequently Asked Questions: Engineer Support to Operation 

Iraqi Freedom. USACE Missions – Oil Fire Suppression and Restoration of 

Production,” updated January 20, 2004 (online at: http://www.hq.usace.army.mil/

cepa/iraq/faq.htm, accessed April 24, 2006). 

26. GAO report, “Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and 

Management,” GAO-04-605, June 2004, p. 7.
118 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

27. DoD OIG report, “Contracts Awarded for the CPA by the Defense Contracting 

Command-Washington,” Report D-2204-057, March 18, 2004, p. 2.

28. Ibid., p. 13.

29. Ibid., pp. 4-7. 

30. Former ORHA contracting official, interview, November 22, 2005.

31. See DoD memo, Principal Under Secretary of Defense (AT&L) to Director, DCMA, 

“Contracting Support for Office of Reconstruction and Humanitarian Assistance,” 

March 28, 2003.

32. Former ORHA contracting official, written comments, December 21, 2005.

33. Ibid.

34. DoD OIG, “Contracts Awarded for the CPA by the Defense Contracting 

Command-Washington,” Report D-2204-057, March 18, 2004.

35. Ibid., p. 7. 

36. Contracting and planning for the humanitarian assistance pillar was also being 

carried out at this time by DoS in conjunction with USAID. Members of the USAID 

team involved in this planning noted that their agencies’ planned work did not 

include tasks in civil administration, however. 

37. DoD OIG, “Contracts Awarded for the CPA by the Defense Contracting 

Command-Washington,” Report D-2204-057, March 18, 2004, p. 3.

38. White House memo to Presidential Envoy to Iraq, May 9, 2003.

39. Congressional Research Service document, “The Coalition Provisional Authority 

(CPA): Origin, Characteristics, and Institutional Authorities,” updated June 6, 2005, 

p. 3.

40. DoD memo, Deputy Secretary of Defense to DoD officials, “Authority of 

the Administrator of the Coalition Provisional Authority and Supporting 

Relationships,” June 16, 2003. 

41. CENTCOM document, “Freedom Message to the Iraqi People,” April 16, 2003. 

42. White House document, Statement by the Press Secretary, “President Names Envoy 

to Iraq,” May 6, 2003. 

43. DoD memo to Presidential Envoy to Iraq, “Designation as Administrator of the 

Coalition Provisional Authority,” May 13, 2003.

44. Congressional Research Service document, “The Coalition Provisional Authority 

(CPA): Origin, Characteristics, and Institutional Authorities,” updated June 6, 2005, 

p. 20. 

45. DoD memo, Deputy Secretary of Defense to DoD officials, “Designation of the 

Army as Department of Defense Executive Agent for the Office of Reconstruction 

and Humanitarian Assistance,” May 21, 2003.

46. DoD memo, Deputy Secretary of Defense to DoD officials, “Authority of 

the Administrator of the Coalition Provisional Authority and Supporting 

Relationships,” June 16, 2003. This memo outlined the dissolution of ORHA and 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 119

noted that the responsibilities of the Secretary of the Army as DoD’s executive agent 

would be exercised in support of the CPA. 

47. DoD memo, Deputy Secretary of Defense to DoD officials, “Designation of the 

Army as Department of Defense Executive Agent for the Office of Reconstruction 

and Humanitarian Assistance,” May 21, 2003. 

48. See UN document, United Nations Security Council Resolution 1483, May 22, 2003 

(online at: http://www.iamb.info/pdf/unsc1483.pdf, accessed April 24, 2006). 

49. UN document, United Nations Security Council Resolution 1483, May 22, 2003 

(online at: http://www.iamb.info/pdf/unsc1483.pdf, accessed April 24, 2006). 

50. KPMG report. “Development Fund for Iraq. Statement of Cash Receipts and 

Payments, 22 May, 2003 to 31 December 2003,” Note 4, undated (online at: http://

www.iamb.info/auditrep/r052203a.pdf, accessed April 24, 2006).

51. See, KPMG report, “Development Fund for Iraq. Statement of Cash Receipts and 

Payments, 1 January 2004 to 28 June 2004,” page 4, undated (online at: http://www.

iamb.info/auditrep/r052203a.pdf, accessed April 24, 2006).

52. This figure does not include funds spent on Iraqi ministry budgets. See CPA 

document, “Development Fund for Iraq Financial Reporting Matrix,” June 26, 2004 

(online at: http://www.iraqcoalition.org/budget/DFI_intro1.html, accessed April 11, 

2006).

53. To avoid confusion, throughout this paper SIGIR refers to HCA as the “HCA 

Office” when speaking of HCA as an organization. When referring to the person 

in charge of the HCA Office, “HCA” is used without any further descriptors. Also, 

it should be noted that the HCA Office acted as the contracting organization for 

CPA, and later for CPA’s Project Management Organization (PMO) after the PMO 

was created in fall 2003. After the end of the CPA, the HCA Office continued 

this function for the Project and Contracting Office (PCO), which took over 

many of the PMO’s duties. SIGIR understands that throughout the post-conflict 

reconstruction period up to the creation of the Joint Contracting Command-Iraq, 

the HCA and the HCA Office was closely associated with, but formally independent 

of these organizations. In fall 2004, the HCA became the commander of the JCC-I.

54. Senior DoD contracting official, interview, October 24, 2005.

55. Ibid. 

56. Senior DoD contracting official, SIGIR Lessons Learned Forum: Contracting I, 

Washington, D.C., December 5, 2005 (transcript p. 16).

57. DoD briefing, Deputy Assistant Secretary of the Army (Policy and Procurement), 

“CPA Contracting Support: Information Briefing,” March 10, 2004. 

58. Given that the majority of contracts awarded by the HCA office during this period 

were funded through DFI, one assumes that these were competitively awarded 

under the competition requirements in CPA Memorandum Number 4, not the FAR.

59. Senior DoD contracting official, written comments to SIGIR, March 10, 2006. 

60. Senior DoD contracting official, Lessons Learned Forum: Contracting I, 

Washington D.C., December 5, 2005 (transcript p. 19- 25).
120 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

61. CPA document, “Regulation Number 3: Program Review Board,” June 16, 2003 

(online at: http://www.iraqcoalition.org/regulations/index.html#Regulations, 

accessed April 24, 2006).

62. Ibid.

63. Minutes from early meetings of the PRB indicate that the board was given updates 

by CPA staff on the development of formal procedures during meetings where 

funding decisions were also made. See e.g. CPA document, “PRB Meeting Minutes”, 

July 8, 2003.

64. CPA memo, “Memorandum Number 4: Contract and Grant Procedures Applicable 

to Vested and Seized Iraqi Property and the Development Fund for Iraq,” June 18, 

2004. (online at: http://www.iraqcoalition.org/regulations/index.html#Regulations, 

accessed April 24, 2006). 

65. Former senior DoD contracting official, interviews, November 2-3, 2005. 

66. SIGIR report, “Oversight of Funds Provided to Iraqi Ministries through the 

National Budget Process,” 05-004, January 30, 2005, p. 5.

67. SIGIR Report, Quarterly Report to the United States Congress, Appendix B, April 

2006. 

68. SIGIR document, Quarterly Report to the United States Congress, Appendix B, 

October 30, 2005.

69. Senior USAID official, interview, November 2, 2005. 

70. USAID press release, “USAID Contingency Plans for Post-Conflict Reconstruction 

in Iraq”, March 20, 2003 (online at: http://www.usaid.gov/press/factsheets/2003/

fs030320_1.html, accessed June 26, 2006).

71. Senior USAID official, SIGIR Lessons Learned Forum: Contracting I, Washington, 

D.C., December 5, 2005 (transcript p. 67). 

72. Senior USAID official, SIGIR Lessons Learned Forum: Contracting I, Washington, 

D.C., December 5, 2005 (transcript p. 69).

73. USAID officer, interview, November 2005. 

74. USAID document, Bechtel I contract award, April 17, 2003, (online at: http://www.

usaid.gov/iraq/contracts/pdf/bechtel.pdf, accessed May 22, 2006).

75. Former USAID contractor, interview, January 5, 2006. 

76. SIGIR believes that the few shortcomings in the Bechtel award were relatively 

minor and would not have attracted public attention were it not for the value of 

the contract. See also USAID audit memorandum, Assistant Inspector General 

for Audit to Assistant Administrator ANE, “USAID’s Compliance with Federal 

Regulations in Awarding the Iraq Infrastructure Reconstruction Contract,” AIG/A 

Memorandum 03-003, July 23, 2003.

77. USAID memo, Assistant IG for Audit to Acting Assistant Administrator ANE, 

“USAID’s Compliance with Federal Regulations in Awarding the Agriculture 

Reconstruction and Development Program for Iraq Contract,” AIG/A 

Memorandum 04-002, January 14, 2004.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 121

78. USAID document, “ADS 300,” (online at: http://www.usaid.gov/policy/ads/300/302.

pdf, accessed June 28,2006), No date, p. 9.

79. RTI report to USAID, “RTI Iraq Local Government Final Report,” June 2005, p. xi.

80. DoS-INL document, “Justification for Other Than Full and Open Competition,” 

(online at: http://iraqcoalition.org/economy/PMO/State_Justification.htm, accessed 

March 21, 2006). 

81. Ibid.

82. Deputy Assistant Secretary of the Army (Policy and Procurement), 

Testimony before the Committee on Government Reform, U.S. House of 

Representatives, March 11, 2004 (online at: http://www.house.gov/hasc/

openingstatementsandpressreleases/108thcongress/04-06-24ballard.pdf, accessed 

April 25, 2006).

83. SIGIR report, “CPA’s Contracting Processes Leading Up to and Including Contract 

Award,” SIGIR 04-013, July 27, 2004, p. i. 

84. USACE document, “Frequently Asked Questions: USACE Missions—Oil Fire 

Suppression and Restoration of Production.” January 20, 2004 (online at: http://

www.hq.usace.army.mil/cepa/iraq/faq.htm, accessed April 3, 2006).

85. SIGIR report, “Attestation Engagement Concerning the Award of Non-Competitive 

Contract DACA63-03-D005,” SIGIR-05-019, September 30, 2005, p. 4. 

86. GAO report, “Rebuilding Iraq, Fiscal Year 2003, Contract Award Procedures and 

Management,” GAO-04-605, June 2004, p. 21.

87. Ibid., p. 20.

88. Ibid. 

89. GAO report, “Rebuilding Iraq, Fiscal Year 2003, Contract Award Procedures and 

Management,” GAO-04-605, June 2004, p. 21.

90. OMB document, 1506 Report, October 2003, p. 16, (online at: http://www.sigir.

mil/reports/pdf/1506_final101503.pdf, accessed April 25, 2006).

91. Fluor Intercontinental, Inc. won a design-build award as part of a joint venture with 

the British firm, AMEC. 

92. CRS document, “Iraq: Recent Developments in Reconstruction Assistance,” May 12, 

2005, pp. 2-3. 

93. Former senior CPA official, written comments to SIGIR, April 14, 2006. 

94. Senior USAID official, interview, November 3, 2005; Former USAID official, 

interview, February 9, 2006. 

95. CPA memo, “Taking Forward the CPA Strategic Plan for Iraq,” undated.

96. Former senior CPA official, SIGIR Lessons Learned Forum: Contracting I, 

Washington, D.C., December 5, 2005, p. 77. 

97. CPA memo, Administrator to SECDEF, August 6, 2003. 

98. Former senior CPA official, interview, January 13, 2006. 
122 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

99. CPA Action memo, CPA Director of OMB to CPA Administrator, “Management of 

Large Appropriated Construction Contracts,” August 15, 2003. Approval indicated 

by Administrator’s signature, also dated August 15, 2003. 

100. CPA memo, Chief of Staff to CPA officials, “President’s Supplemental–CPA Program 

Management Office,” Unclassified, September 9, 2003. 

101. Former senior CPA official, interview, January 13, 2006.

102. Ibid.

103. See e.g. Former USAID official, interview, February 9, 2006.

104. Senior USACE officer, SIGIR Lessons Learned Forum: Program and Project 

Management, April 12, 2006, (transcript p. 97).

105. See e.g. Senior USACE official interview, February 8, 2006; Former USAID official, 

interview, February 9, 2006. 

106. The UN/World Bank information was formally published in a report in 

October 2003, see: UN document, “United Nations/World Bank Joint Iraq 

Needs Assessment,” October 2003, p. ix-x (online at: http://lnweb18.worldbank.

org/mna/mena.nsf/Attachments/Iraq+Joint+Needs+Assessment/$File/

Joint+Needs+Assessment.pdf, accessed April 25, 2006). 

107. Former senior CPA official, interview, January 13, 2006.

108. CPA Administrator, testimony before the Appropriations Committee, U.S. Senate, 

September 22, 2003 (online at: http://www.iraqwatch.org/government/Index_US_

Hearings.htm, accessed April 20, 2006). 

109. Former senior CPA official, interview, January 13, 2006.

110. Ibid.

111. Ibid.

112. USAID/Iraq, written comments to SIGIR, June 8, 2006.

113. Of this amount, $100 million was to be “made available for democracy-building 

activities, and $10 million made available to the United States Institute for Peace 

for activities supporting peace enforcement, peace keeping and post-conflict 

peace-building.” See PL 108-106, p.1225 (online at: http://www.export.gov/iraq/pdf/

public_law_108-116.pdf, accessed April 25, 2006). 

114. Public Law 108-106, Emergency Supplemental Appropriations Act for Defense and 

for the Reconstruction of Iraq and Afghanistan, 2004, November 6, 2003, p.1225 

(online at: http://www.export.gov/iraq/pdf/public_law_108-116.pdf, accessed April 

25, 2006). 

115. Former senior CPA official, interview, July 1, 2004. 

116. Public Law 108-106, Emergency Supplemental Appropriations Act for Defense and 

for the Reconstruction of Iraq and Afghanistan, 2004, November 6, 2003, p.1225 

(online at: http://www.export.gov/iraq/pdf/public_law_108-116.pdf, accessed April 

25, 2006). 

117. SIGIR document, Quarterly Report to the United States Congress, April 2006. 

118. DoD document, Deputy Secretary of Defense, Determination and Findings, 

December 5, 2003. 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 123

119. GAO report, “Rebuilding: Fiscal Year 2003 Contract Award Procedures and 

Management Challenges.” GAO-04-605, July 2004, p. 46.

120. Ibid. 

121. CPA document, CPA Budget Director to CPA Administrator, “Management of 

Large Appropriated Construction Contracts,” August 15, 2003.

122. Former senior CPA official, interview, January 13, 2006; Senior USACE official, 

interview, February 8, 2006. 

123. These funds were expended for reporting purposes while under the control of the 

Department of the Army, acting as executive agent for the CPA. However, after 

dissolution of the CPA in late June 2004, the remaining funds were transferred to 

DoS, which used $23.8 million for salary expenses associated with the newly formed 

Iraq Reconstruction Management Office (IRMO). SIGIR did not question the 

authority of DOS to obligate these funds; however it did question “disbursing the 

remaining funds for salary expenses without being able to provide either rationale 

or support for how these expenditures complied with the congressional intent for 

the appropriation,” (i.e. reporting). See SIGIR memo, SIGIR to U.S. Ambassador 

to Iraq and Director, IRMO and Commanding General, USACE-GRD, “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. 

124. PCO staff, interview, November 15, 2005.

125. Senior DoD contracting official, written comments to SIGIR, March 10, 2006. 

126. Former senior DoD contracting official, written comments to SIGIR, April 26, 2006. 

127. Former senior CPA official, interview, March 3, 2006. 

128. Former senior and deputy ministerial advisors, interview, December 22, 2005.

129. See e.g. Senior DoD contracting official, interview, November 17, 2005; DoD 

contractor, interview, March 19, 2006. 

130. Former senior CPA official, interview, January 13, 2006.

131. Former senior CPA official, interview, January 13, 2006.

132. Senior USACE official, interview, February 8, 2006. 

133. OMB document, Section 2207 Report, January 5, 2004 (online at: http://www.

whitehouse.gov/omb/legislative/index.html, accessed June 1, 2006).

134. Former CPA official, interview, July 1, 2004.

135. OMB document, Section 2207 Report, January 5, 2004. 

136. Ibid.

137. Former senior DoD contracting official, interview, January 20, 2006.

138. Senior DoD official, interview, December 12, 2005. 

139. DoD contracting officials, interview with PMO/PCO Historian, November 17, 

2004. 

140. DoD briefing document, “Acquisition Management and Logistics Assessment 
124 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Team,” February 6, 2004. 

141. See former DoD senior contracting official, interviews, November 2-3, 2005; DoD 

briefing document, “Management and Logistics Assessment Team,” February 6, 

2004; DoD document, “Draft Recommendations from Management and Logistics 

Assessment Team,” Undated. 

142. See e.g. DoD contracting official, interview, January 23, 2006; Senior DoD 

contracting official, interviews, November 2-3, 2005.

143. Former senior DoD contracting official, interviews, November 2-3, 2005. 

144. Ibid.

145. DoD memo, Head of Contracting Activity-CPA to Personnel Assigned to CPA, 

“Unauthorized Commitments,” April 14, 2004, as cited in The Army Lawyer, 

“Special Topics Regarding Military Contracts,” January 1, 2005. (online at: http://

www.highbeam.com/library/docfreeprint.asp?docid=1G1:130776906&ctrlInfo=Rou

nd18%3AMode18c%3ADocFree%3APrint&print=yes, accessed April 25, 2006).

146. Ibid.

147. Senior DoD contracting official, interview, November 17, 2005. 

148. Senior DoD contracting official, written comments to SIGIR, March 10, 2006. 

149. SIGIR audit, “Administration of Iraq Relief and Reconstruction Fund Contract 

Files,” SIGIR-05-007, April 30, 2005, p. 6. 

150. Ibid. 

151. SIGIR report, “Task Orders Awarded by the Air Force Center for Environmental 

Excellence in Support of the Coalition Provisional Authority, SIGIR- 04-004, July 

28, 2004, p. 4.

152. Ibid., p. 1. 

153. AFCEE contracting official, interview, July 1, 2004. 

154. SIGIR was formerly known as the Coalition Provisional Authority-Inspector 

General (CPA-IG). 

155. SIGIR report, “Task Orders Awarded by the Air Force Center for Environmental 

Excellence in Support of the Coalition Provisional Authority,” SIGIR- 04-004, July 

28, 2004, p. 7-8.

156. AFCEE contracting official, conversation with SIGIR staff, February 2006. 

157. Ibid.

158. Former senior DoD contracting official, interview, January 20, 2006.

159. DoD briefing document, “Iraq Reconstruction Pre-proposal Conference Briefing. 

Program Management and Design-Build Construction,” January 21, 2004, pp. 10, 

27, and 32 (online at: http://www.ndia.org/Content/NavigationMenu/Meetings_

and_Events/Past_Events/2004_Iraq_Reconstruction_491C.htm, accessed April 19, 

2006).

160. Ibid., p. 73. 

161. Ibid., p. 34.

162. Ibid., p. 74.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 125

163. SIGIR report, “Award of Sector Design-Build Construction Contracts,” SIGIR-04-

005, July 23, 2004, p. 2.

164. DoD briefing, “Iraq Reconstruction Pre-proposal Conference Briefing. Program 

Management and Design-Build Construction,” January 21, 2004, pp. 21 and 42 

(online at: http://www.ndia.org/Content/NavigationMenu/Meetings_and_Events/

Past_Events/2004_Iraq_Reconstruction_491C.htm , accessed April 19, 2006).

165. SIGIR report, “Award of Sector Design-Build Construction Contracts,” SIGIR-04-

005, July 23, 2004, p. 2.

166. Former senior DoD contracting official, interview, January 20, 2006.

167. DoD briefing document, “Iraq Reconstruction Pre-proposal Conference Briefing. 

Program Management and Design-Build Construction,” January 21, 2004, p.20 

and 73 (online at: http://www.ndia.org/Content/NavigationMenu/Meetings_and_

Events/Past_Events/2004_Iraq_Reconstruction_491C.htm, accessed April 19, 

2006).

168. SIGIR report, “Award of Sector Design-Build Construction Contracts,” SIGIR-04-

005, July 23, 2004, p. 16.

169. DoD briefing document, “Iraq Reconstruction Pre-proposal Conference Briefing. 

Program Management and Design-Build Construction,” January 21, 2004, p. 39 

(online at: http://www.ndia.org/Content/NavigationMenu/Meetings_and_Events/

Past_Events/2004_Iraq_Reconstruction_491C.htm , accessed April 19, 2006).

170. Ibid., p. 20. 

171. Ibid., pp. 64-68 and pp.107-110.

172. Senior DoD contracting official, interview, November 17, 2005. 

173. SIGIR report, “Award of Sector Design-Build Construction Contracts,” SIGIR-04-

005, July 23, 2004, p. 6-7.

174. Ibid.

175. Former senior CPA official, interview, November 17, 2005. 

176. Former senior CPA official, interview, July 1, 2004. 

177. USACE, written comments to SIGIR, April 12, 2006. 

178. USACE Commanding General, meeting with SIGIR, May 15, 2006. 

179. Senior DoD contracting official, SIGIR Lessons Learned Forum: Contracting I, 

Washington D.C., December 5, 2005 (transcript p. 151). 

180. See e.g., Senior DoD contracting official, interview, November 17, 2005; Former 

senior DoD official, interviews, November 2-3, 2005; Senior USACE official, 

interview, February 8, 2006.

181. PMO/PCO contractor, SIGIR Lessons Learned Forum: Contracting II, Arlington, 

VA, December 13, 2005 (transcript p. 74). 

182. Various participants, SIGIR Lessons Learned Forum: Contracting I, Washington, 

D.C., December 5, 2005 (transcript p. 161). 

183. Senior DoD contracting official, interview, November 17, 2005. 

184. Ibid.
126 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

185. See e.g. Former senior DoD contracting official interviews, November 2-3, 2005; 

Former senior CPA official, interview, March 3, 2006; Former CPA official, written 

comments, June 7, 2006. 

186. National Security Presidential Directive 36, President George W. Bush to Cabinet 

Members and Others, “United States Government Operations in Iraq,” May 11, 

2004. (online at: http://www.fas.org/irp/offdocs/nspd/nspd051104.pdf, accessed 

April 25, 2006).

187. DoD memo, Administrative Assistant to the Secretary of the Army to Director, 

Army Acquisition Support Center, “Personnel and Ancillary Support for Army 

Program Management Office (Iraq/Washington, DC), Provisional Organization,” 

May 13, 2004. 

188. DoD memo, Deputy Secretary of Defense to DoD Officials, “Organizational 

Establishment and Placement of the Project and Contracting Office within the 

Department of the Army,” June 22, 2004. 

189. Former senior DoD contracting official, interviews, November 2-3, 2005.

190. Senior USAID contracting official, interview, November 2, 2005.

191. Senior USAID official, interview, November 3, 2005. 

192. Senior USAID official, interview, November 2, 2005.

193. OTI supports U.S. foreign policy objectives by providing grants to local community 

leaders and organizations to assist during periods of political crisis and transition. 

See USAID Contracting Official, interview, November 9, 2005. 

194. OTI official, interview, December 20, 2005.

195. USAID staff, written comments to SIGIR, March 9, 2006.

196. USAID press release, “USAID Awards Iraq Infrastructure Contract II,” January 

6, 2005 (online at: http://www.usaid.gov/press/factsheets/2004/fs040106.html, 

accessed April 25, 2006).

197. Former senior USAID official, interview, January 19, 2006; former USAID official, 

interview, February 9, 2006. 

198. Former senior USAID official, interview, January 19, 2006. 

199. Former senior CPA official, interview, January 13, 2006. 

200. Senior DoS official, interview, November 29, 2005. 

201. DoS document, “Justification for Other than Full and Open Competition,” undated 

(online at: http://iraqcoalition.org/economy/PMO/State_Justification.htm, accessed 

March 21, 2006). 

202. Senior DoS official, interview, November 29, 2005.

203. National Security Presidential Directive 36, President George W. Bush to 

Cabinet Members and Others, “United States Government Operations in Iraq,” 

May 11, 2004, (online at: http://www.fas.org/irp/offdocs/nspd/nspd051104.pdf, 

accessed April 25, 2006).
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 127

204. GAO report, “Rebuilding Iraq: Status of Funding and Reconstruction Efforts,” 

GAO-05-876, July 2005, pp.4-5. 

205. Former USAID contractor, interview, December 1, 2005.

206. Senior DoD contracting official, interview, November 17, 2005.

207. Ibid.

208. There are three levels of certification for DoD contracting officers. To reach 

certification one must meet requirements in both education and professional 

experience.

209. PCO staff, interview, November 15, 2005.

210. OMB document, Section 2207 Report, July 2004. 

211. Ibid.

212. Ibid.

213. Former senior CPA official, interview, March 3, 2006. 

214. CPA document, “CPA Situation Reports,” unclassified, April 2004. 

215. DoS document, Section 2207 Report, April 2005. 

216. Iraqi Ministry of Finance memo, Minister of Finance to Director of PMO, 

“Administration of Development Fund for Iraq (DFI) Funded Contracts,” June 15, 

2004. 

217. See e.g., Senior USACE official, interview, February 8, 2006; Former senior DoD 

contracting official, interviews, November 2-3, 2005.

218. Senior USACE official, interview, February 8, 2006.

219. Senior DoD contracting official, interview, February 10, 2006.

220. U.S. Army Audit Agency report, “Program Management in Support of Iraq 

Reconstruction,” A-2005-0194-ALA, May 26, 2005, pp. 15-16. 

221. Senior DoD contracting official, interview, February 10, 2006; Former senior DoD 

contracting official, interviews, November 2-3, 2005; U.S. Army Audit Agency 

report, “Program Management in Support of Iraq Reconstruction,” A-2005-0194-

ALA, May 26, 2005.

222. Senior DoD contracting official, interview, February 10, 2006. 

223. Senior USACE official, interview, February 8, 2006.

224. USACE-GRD contracting official, interview, November 15, 2005. 

225. Senior DoD contracting official, interview, February 10, 2006. 

226. See Public Law 108-375 (online at: http://www.defenselink.mil/dodgc/olc/docs/

PL108-375.pdf, access April 25, 2006). 

227. Former senior DoD contracting official, written comments to SIGIR, April 24, 2006.

228. Senior DoD contracting official, SIGIR Lessons Learned Forum: Contracting I, 

Washington D.C., December 5, 2005 (transcript p. 152).

229. Ibid. 

230. DoS document, Section 2207 Report, April 6, 2005, p. 2.
128 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

231. DoS document, Section 2207 Report, April 6, 2005.

232. Former PCO Director, interview, April 24, 2006.

233. USACE-GRD contracting official, interview, November 15, 2005.

234. CFC FRAGO 09-668, “Contracting and Organizational Changes,” 122143Z 

November 2004. 

235. Former senior DoD contracting official, interviews, November 2-3, 2005; Senior 

DoD contracting official, interview, November 17, 2005. 

236. A FRAGO, or fragmentary order, is a military order that reflects a change in a 

previous operation order.

237. USACE, written comments to SIGIR, April 12, 2006.

238. Former senior DoD contracting official, interview, November 2-3, 2005. 

239. Former JCC-I staff person, written comments to SIGIR, November 22, 2005. 

240. Senior USAID contracting official, conversation with SIGIR staff, December 1, 

2005.

241. Ibid.

242. The original contracts were awarded under a modified process. RFPs were not 

posted, but sent to pre-determined organizations. See USAID press release, “USAID 

Procurement Process and Iraq Contingency Planning,” March 19, 2003 (online 

at: http://www.usaid.gov/press/factsheets/2003/fs030320.html, accessed April 23, 

2006).

243. P.L. 108-106, November 6, 2003, Section 2202 (online at: http://www.export.gov/

iraq/pdf/public_law_108-116.pdf, accessed April 25, 2006).

244. GAO report. “Rebuilding Iraq: U.S. Water and Sanitation Efforts Need Improved 

Measures for Assessing Impact and Sustained Resources for Maintaining Facilities,” 

GAO 05-872, September 2005, p. 12.

245. OMB document, Section 2207 Report, April 2004. 

246. DoD memo, “Waiver of Limiting Legislation for Commanders’ Emergency 

Response Program,” October 5, 2005.

247. Multi-National Corps-Iraq (MNC-I), written comments to SIGIR, October 5, 2005.

248. CPA Memo, Administrator of the CPA to the Commander of Coalition Forces, 

“Commanders’ Emergency Response Program”, June 16, 2003, as cited in Mark 

Martins, “The Commander’s Emergency Response Program (CERP),” Joint Forces 

Quarterly, Issue 37, 2005. 

249. Ibid. 

250. Combined-Joint Task Force 7 (CJTF-7) document, “Fragmentary Order 89: 

Commanders’ Emergency Response Program (CERP) Formerly the Brigade 

Commanders’ Discretionary Fund to CJTF-7 OPORD 03-036,” June 19, 2003. 

Unclassified. Copy of copies. 

251. Multi-National Corps-Iraq (MNC-I), written comments to SIGIR, October 5, 2005.

252. Ibid.

253. See P.L. 108-106, November 6, 2003.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 129

254. See P.L. 108-287, August 5, 2004.

255. See P.L. 108-447, December 8, 2004; P.L. 109-13, May 11, 2005. 

256. See P.L. 108-287, August 5, 2004. 

257. H.R. 1815, “National Defense Authorization Act for Fiscal Year 2006,” January 6, 

2006. p. 320, (online at: http://www.govtrack.us/data/us/bills.text/109/h1815.pdf, 

accessed April 25, 2006).

258. Multi-National Corps-Iraq (MNC-I), written comments to SIGIR, October 5, 2005.

259. Procurements of more than $100,000 were directed through C8/Comptroller 

Channels, procedures for which, according to FRAGO 89, would be outlined in a 

separate document. 

260. Mark Martins, “The Commander’s Emergency Response Program (CERP),” Joint 

Forces Quarterly, Issue 37, 2005. 

261. Ibid. 

262. SIGIR report, “Management of Commander’s Emergency Response Program for 

Fiscal Year 2004,” SIGIR 05-014, October 13, 2005. 

263. U.S. Army Audit Agency, “Follow-up Audit of the Commander’s Emergency 

Response Program and Quick Response Fund,” A-2005-0332-ACE, September 30, 

2005. 

264. OMB document, Section 2207 Report, April 2004, p. 12. 

265. Mark Martins, “The Commander’s Emergency Response Program (CERP), Joint 

Forces Quarterly, Issue 37, 2005. 

266. Senior USAID official, SIGIR Lessons Learned Forum: Contracting I, Washington, 

D.C., December 5, 2005 (transcript p. 69). 

267. MNC-I, written comments to SIGIR, November 24, 2005.

268. SIGIR document, Quarterly Report to the U.S. Congress, January 2005. 

269. DoS document, Section 2207 Report, October 2004. 

270. DoS document, Section 2207 Report, October 2005.

271. SIGIR document, Quarterly Report to the U.S. Congress, January 2005. 

272. Senior MNF-I officials, conversion with SIGIR. 

273. DoS report, Section 2207 Report, October 2004.

274. The Federal Acquisition Regulation (FAR) is the body of regulation used by federal 

executive agencies for acquiring supplies and services with appropriated funds. 

Additionally, DoD, USAID, and DoS have specific supplements to the FAR.

275. USAID has recently developed a “Complex Emergency Waiver Package” that can 

be modified for differing events – e.g., the Southeast Asian Tsunami, the Pakistan 

Earthquake, Iraq, etc., that may serve as a model for this. (Source: USAID/Iraq, 

written comments to SIGIR, June 8, 2006).

276. The FAR is the body of regulation used by federal executive agencies for acquiring 

supplies and services with appropriated funds. Additionally, DoD, USAID, and DoS 

have specific supplements to the FAR. 
130 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

277. Former senior USAID official, interview, February 9, 2006. 

278. DoS contracting official, written comments to SIGIR, February, 24, 2006.

279. These communications provide a snapshot of a point in time, fall 2004, and the 

interaction on contracting concerns between Iraq-based and Washington, DCbased staff. They do not reflect changes to regulations that may have taken place 

after this time, nor do they provide visibility into activities that may have been 

taking place simultaneously, but of which requesting and responding agencies were 

not aware.

280. DoD officials, written comments to SIGIR, March 27, 2006 and March 30, 2006.

281. GAO report, “Federal Procurement: Spending and Workforce Trends,” GAO-03-

443, April 2003, pp. 5 and 21.

282. OMB officials, interview, January 4, 2006.

283. GAO report, “Federal Procurement: Spending and Workforce Trends,” GAO-03-

443, April 2003, p. 20.

284. Gloria Sochon and John Krieger, Presentation to the Government Contract 

Management Conference, December 5-6, 2005.

285. OMB memo, Deputy Director of Management to Chief Acquisition Officials and 

Senior Procurement Officials, January 20, 2006 (online at: http://www.whitehouse.

gov/omb/procurement/acq_wk/fac_contracting_program.pdf, accessed May 1, 

2006).

286. Senior DoD contracting official, interview, November 17, 2005.

287. Ibid.

288. Senior JCC-I contracting official, interview, December 30, 2005.

289. Senior USAID contracting official, written comments to SIGIR, November 22, 2005.

290. Ibid.

291. Ibid.

292. USAID contracting official, written comments to SIGIR, December 21, 2005.

293. Ibid.

294. Senior DoS contracting official, interview, January 31, 2006.

295. Elliott Corey Yoder, “The Yoder Three-Tiered Model for Optimal Contingency 

Planning and Execution of Contingency Contracting,” Naval Post-Graduate School, 

Contracting for Deployed Forces Panel, May 19, 2005 (online at: http://www.nps.

navy.mil/gsbpp/ACQN/publications/FY05/AM-05-004_Proceedings_ThursdayPM.

pdf, accessed April 25, 2006).

296. The training requirements include education on the Commander’s Emergency 

Response Fund, which was created for use in Iraq and is discussed in a previous 

section of this paper. 

297. See National Defense Authorization Act for Fiscal Year 2006, “Joint Policy on 

Contingency Contracting,” Sec. 817, December 18, 2005 (online at: http://www.

wifcon.com/dodauth6/dod06_817.htm, accessed April 25, 2006). 
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 131

298. See Conference Report 109-360, National Defense Authorization Act for Fiscal Year 

2006, “Contractors on the Battlefield,” p. 764 (online at: http://frwebgate.access.

gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_reports&docid=f:hr360.109.pdf, 

accessed July 12, 2006).

299. DoD document, “Draft Army Guidebook for OCONUS Contingency Contracting,” 

December 15, 2005; DoD document, “Draft Army CONUS Guide for Supporting 

Emergencies within the United States and Supporting Overseas Contingencies from 

CONUS Locations,” December 2005. 

300. USAID contracting official, conversation with SIGIR staff, February 8, 2006.

301. USAID contracting official, conversation with SIGIR staff, November 15, 2005.

302. DoS contracting official, conversation with SIGIR staff, March 2006. 

303. DoS-AQM, written comments to SIGIR, April 11, 2006.

304. OUSD-ATL, written comments to SIGIR, April 21, 2006.

305. USAID/Iraq, written comments to SIGIR, June 8, 2006. 

306. Ibid.

307. Ibid.
132 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 133

Forum Participants
134 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Mr. Stuart W. Bowen, Jr., serves as the Special Inspector General 

for Iraq Reconstruction (SIGIR). He was appointed as Inspector 

General for the Coalition Provisional Authority (CPA-IG) on January 20, 2004, by the Secretary of Defense with the concurrence of the 

Secretary of State. With the enactment of the Defense Authorization 

Act for 2005, CPA-IG was re-designated as SIGIR. 

Prior to his appointment as CPA-IG, Mr. Bowen was a partner 

at the law firm of Patton Boggs. Before that, Mr. Bowen served as 

Special Assistant to the President and Associate Counsel, and later as 

Deputy Assistant to the President and Deputy Staff Secretary at the 

White House under President George W. Bush.

Maj. Gen. William L. Nash, U.S. Army (Ret.), has been director of the 

Council on Foreign Relation’s Center for Preventive Action since 

April 2001. He leads the Council’s efforts to work with governments, international organizations, the business community and 

non-governmental organizations to anticipate international crises 

and to provide analysis and specific recommendations for preventive 

action. He came to the Council after serving as the UN’s regional 

administrator in Northern Kosovo in 2000. 

Major General Nash commanded the United States Army’s 

1st Armored Division from June 1995 to May 1997. In late 1995, 

he became the Commander of Task Force Eagle, a multinational 

division of 25,000 soldiers from 12 nations charged to enforce the 

military provisions of the Dayton Peace Accords in northeastern 

Bosnia-Herzegovina. He also served in Vietnam and in Operation 

Desert Storm.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 135

Mr. Scott Amey is the General Counsel, Senior Investigator, Project on Government Oversight (POGO). He currently heads up the 

organization’s contract oversight investigations. In June 2004, Mr. 

Amey authored The Politics of Contracting.

Colonel Anthony B. Bell is currently the Principal Responsible for 

Contracting, Army Contracting Agency - The Americas. From June 

2003 to March 2004, he deployed to Iraq as the Head of Contracting 

Activity for the Coalition Provisional Authority in Baghdad. 

Mr. Robert A. Burton is the Associate Administrator of the Office 

of Federal Procurement Policy (OFPP) in the Executive Office of 

the President, Office of Management and Budget. As the Associate 

Administrator, he is responsible for the direction and development 

of government-wide acquisition policies, regulations, and initiatives. 

He was appointed to this position in November 2001. 

Dr. James Carter, Defense Acquisition University. Bio not available. 

Mr. James M. Crum is the Department of the Army’s Washington 

Director of the Project and Contracting Office (PCO) for the Iraq 

reconstruction mission. He leads an inter-disciplinary program team 

that focuses management support in the areas of logistics, financial management, personnel, strategic communications, legislative 

affairs, and contracting for the Secretary of the Army and the PCO 

team in Baghdad. Having served 18 years for the U.S. Army Corps of 

Engineers, he has been involved in planning, design, construction, 

operations and emergency response phases of infrastructure development and operations. 
136 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Ms. Ginger M. Cruz is the Deputy Inspector General for the Special 

Inspector General for Iraq Reconstruction (SIGIR). She previously 

served as the Chief of Staff for SIGIR. She is a former news director, reporter, anchor and producer for two NBC affiliates, a former 

Deputy Assistant Secretary of Public Affairs at HUD, former Communications Director for the Governor of Guam, and a former Vice 

President for a small federal consulting firm in Washington, D.C. 

Mr. Joseph Farinella, is the Assistant Inspector General for Audit, 

U.S. Agency for International Development. He has held various 

positions worldwide with USAID, the United Nations, and the U.S. 

General Accounting Office. Mr. Farinella joined USAID’s Office of 

Inspector General in 1989.

 

Mr. Harry P. Hallock was on a 120-day detail as the Acting Deputy 

Principal Assistant Responsible for Contracting (PARC) at the headquarters of the U.S. Army Corps of Engineers in Washington, D.C. 

Since November 2002, Mr. Hallock also has served as the Acquisition Career Management Advocate (ACMA) for the Acquisition 

and Technology Workforce at the U.S. Army’s Acquisition Support 

Center in Warren, Michigan, and for the U.S. North Central Region. 

General Paul J. Kern, U.S. Army (Ret.) joined The Cohen Group as a 

Senior Counselor in January 2005. In addition, he holds the Class of 

1950 Chair for Advanced Technologies at West Point. In 2004, General Kern concluded his 40-year U.S. Army career, when he retired 

as Commanding General, Army Materiel Command (AMC). In June 

2004, General Kern led the military’s internal investigation into the 

abuses at the Abu Ghraib prison in Iraq.
JULY 2006 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 137

Mr. Joseph T. (Mickey) McDermott is the Assistant Inspector General for Audit at the Special Inspector General for Iraq Reconstruction. He serves as the principal advisor to the IG and the Deputy IG 

for all audit matters, including audit policy and planning. He spends 

the majority of his time based in Baghdad with his audit staff. 

Mr. Michael H. Mobbs is the Staff Director to the Under Secretary of Defense for Policy, a position to which he was appointed in 

November 2003. Mr. Mobbs also has served since November 2001 

as Special Advisor to the Under Secretary of Defense for Policy. His 

Iraq-related assignments have included service as Civil Administration Coordinator in ORHA and head of the Energy Infrastructure 

Planning Group (an interagency group that developed contingency 

plans for post-conflict reconstruction and operation of the Iraqi oil 

sector). 

Rear Admiral David J. Nash, U.S. Navy (Ret.), is with BE&K, a 33-

year-old international engineering and construction company, as 

president of its newly formed Government Group. Prior to joining 

BE&K, Rear Admiral Nash was the director of the Iraq Program 

Management Office (PMO) in Baghdad. 

Mr. Doug Packard was the Deputy to the Principal Assistant 

Responsible for Contracting at the Joint Contracting CommandIraq/Afghanistan, Office of the PARC-Reconstruction. He is a career 

contracting executive, having worked for the U.S. Army Contracting 

Agency, U.S. Army Contracting Command-Europe, and the Acquisition Career Management Office, ASA(ALT).
138 I IRAQ RECONSTRUCTION: Lessons in Contracting and Procurement

Ms. Cathy J. Read is the Acting Deputy Assistant Secretary for 

Logistics Management, Department of State, as well as the Director, 

Acquisitions Management for DoS. She is a career member of the 

Senior Executive Service. 

Ms. Katherine V. Schinasi is Managing Director, Acquisition and 

Sourcing Management, at the U.S. Government Accountability 

Office. This group has responsibility for examining the effectiveness 

of agency acquisition and procurement practices in meeting their 

mission performance objectives and requirements. Ms. Schinassi 

joined GAO in 1978 and was appointed to the Senior Executive 

Service in 1997.

Professor Steven L. Schooner is Associate Professor of Law and 

Co-Director of the Government Procurement Law Program at the 

George Washington University Law School. Before joining the 

faculty, Professor Schooner was the Associate Administrator for 

Procurement Law and Legislation (a Senior Executive Service 

position) at the Office of Federal Procurement Policy in the Office 

of Management and Budget. 

Mr. Stan Z. Soloway is president of the Professional Services 

Council, the principal national trade association representing the 

government professional and technical services industry. PSC is 

known for its leadership on the full range of government acquisition/procurement and outsourcing and privatization issues. Prior to 

joining PSC, Mr. Soloway served nearly three years as the Deputy 

Under Secretary of Defense (Acquisition Reform) and concurrently 

as Director of Secretary of Defense William Cohen’s Defense Reform 

Initiative. 
Mr. Lee Thompson is the Assistant Deputy Assistant Secretary of 

the Army (Policy and Procurement), Iraq. Mr. Thompson directly 

supports the Deputy Assistant Secretary for Policy and Procurement 

and the Assistant Secretary of the Army (ALT), on contract matters 

pertaining to Iraq.

 

Mr. Ross Wherry was a U.S. Agency for International Development 

(USAID) Foreign Service Officer, whose most recent USAID position was the Director, Office of Iraq Reconstruction. Mr. Wherry 

served in Iraq supporting reconstruction efforts, and while in 

Washington prior to the commencement of hostilities, designed and 

maintained high-level approval for USAID’s $4 billion portion of the 

postwar reconstruction program. 

Dr. Dov S. Zakheim is Vice President of Booz Allen Hamilton, a 

global strategy and technology consulting firm. From 2001 to April 

2004, he served as the Under Secretary of Defense (Comptroller) 

and Chief Financial Officer for the Department of Defense.