OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

COMMANDER’S EMERGENCY

RESPONSE PROGRAM: MUHALLA 312

ELECTRICAL DISTRIBUTION PROJECT

LARGELY SUCCESSFUL

SIGIR 09--025

JUULLYY 26,, 2009
For more information, contact SIGIR Public Affairs at 

(703) 428-1100 or PublicAffairs@sigir.mil Special Inspector General for Iraq Reconstruction

Special Inspector General for Iraq 

SIGIR

Reconstruction

Summary of Report: SIGIR 09-025 

Why SIGIR Did This Audit 

The Special Inspector General for Iraq 

Reconstruction (SIGIR) has issued four reports 

on the management controls and accountability 

of Commander’s Emergency Response Program 

(CERP) funds. This report focuses on the 

outcome, cost, and oversight of one CERP 

project—the electrical distribution grid in a 

Baghdad neighborhood known as Muhalla 312, 

located in the Al Ahdameya Governorate. At 

about $11.7 million, the Muhalla 312 electrical 

distribution grid is the most expensive project 

undertaken with CERP funds in Iraq: the 

project encompassed the entire Muhalla 

(estimated to be 10 square blocks). 

SIGIR’s objectives were to examine: 1) project 

outcome in terms of final costs and completion 

time, 2) effectiveness of the contracting process 

and oversight of the contract, 3) coordination of 

the project with other reconstruction agencies, 

and 4) transfer to and sustainment efforts by the 

Government of Iraq (GOI). 

Lesson Learned 

The Muhalla 312 electrical distribution grid 

project showed that obtaining host country buyin of a project and its design can help achieve 

positive results in the project’s transfer and 

sustainment phases. This lesson learned applies 

to CERP implementation in other contingency 

situations, such as Afghanistan. 

Because this report did not contain any 

recommendations, the responsible agencies were 

not required to, and did not, submit comments. 

However, the Multi-National Corps-Iraq 

provided technical comments that we considered 

when preparing the final report. 

Typical Street in Muhalla 312.

July 26, 2009

COMMANDER’S EMERGENCY RESPONSE PROGRAM: 

MUHALLA 312 ELECTRICAL DISTRIBUTION PROJECT 

LARGELY SUCCESSFUL

What SIGIR Found 

The Muhalla 312 distribution grid project was largely successful in meeting 

its intended outcome and was completed within cost. In November 2006, 

the Joint Contracting Command-Iraq/Afghanistan (JCC-I/A) awarded a 

contract to Civilian Technologies Limited for nearly $11.7 million to 

rehabilitate the electricity distribution facility at Muhalla 312. Over the next 

26 months, JCC-I/A issued four contract modifications, including a design 

change that increased the contract amount to nearly $11.8 million. The 

increase was minimal—less than 1%; however, the project took considerably 

longer than anticipated. Project delays were the result of challenges in 

obtaining approvals from the Iraqi Ministry of Electricity and security 

problems. 

Contract management and project oversight were generally effective. The 

Gulf Region Division-Central District (GRC) of the U.S. Army Corps of 

Engineers performed effective quality assurance on the project. SIGIR 

reviewed the contract award and solicitation documentation, which showed 

that JCC-I/A found only one contractor to be technically acceptable. The 

statement of work for the contract was well defined. We reviewed 

contractor invoices and receiving documents and determined that invoices 

equaled the total contract price. 

The project was coordinated effectively with the GOI; however, we were 

unable to confirm that Multi-National Corps-Iraq coordinated the project 

with other U.S. reconstruction agencies. Lack of project coordination could 

reduce the overall impact of the intended results. 

On January 13, 2009, GRC effectively transferred the electrical distribution 

grid to the GOI. On May 20, 2009, SIGIR visited the project site and 

observed that the GOI was sustaining the project. 

Although the project took longer to complete than anticipated because of 

GOI approval delays and security issues, this was a successful CERP 

project. This supports an earlier SIGIR lesson learned that early engagement 

of GOI officials on projects can lead to a more effective transition and a 

commitment to sustain the project. Contract management and project 

oversight were effective, and GOI is sustaining the electrical distribution 

grid even though Multi-National Division-Baghdad did not obtain a 

sustainment agreement up front. 
SP EC IA L IN S P ECT O R GE N ER A L FO R IR A Q RE CO NS TR UC T IO N

July 26, 2009 

MEMORANDUM FOR U.S. SECRETARY OF DEFENSE 

U.S. SECRETARY OF STATE 

U.S. AMBASSADOR TO IRAQ 

COMMANDING GENERAL, MULTI-NATIONAL FORCE-IRAQ 

COMMANDING GENERAL, MULTI-NATIONAL CORPS-IRAQ 

COMMANDING GENERAL, GULF REGION DIVISION, U.S. 

ARMY CORPS OF ENGINEERS 

COMMANDING GENERAL, JOINT CONTRACTING COMMANDIRAQ/AFGHANISTAN 

SUBJECT: Commander’s Emergency Response Program: Muhalla 312 Electrical Distribution 

Project Largely Successful (SIGIR 09-025) 

We are providing this audit report for your information and use. It discusses our review of the 

Commander’s Emergency Response Program project for electrical distribution in a Baghdad 

neighborhood known as Muhalla 312, located in the Al Ahdameya Governorate. The Special 

Inspector General for Iraq Reconstruction conducted this audit as project 9015. The audit was 

performed under the authority of Public Law 108-106, as amended, which also incorporates the 

duties and responsibilities of inspectors general under the Inspector General Act of 1978. 

This report does not contain recommendations; accordingly, the addressees were not required to 

provide comments. However, the Multi-National Corps-Iraq provided technical comments, 

which we considered while preparing the final report. 

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

draft report, please contact Joan Hlinka, Deputy Assistant Inspector General for Audits 

(Washington, DC), (703) 604-0945/ joan.hlinka@sigir.mil, or Nancee Needham, Deputy 

Assistant Inspector General for Audits (Baghdad), (240)-553-0581, ext. 3793/ 

nancee.needham@iraq.centcom.mil. 

 

Stuart W. Bowen, Jr. 

Inspector General 
Table of Contents 

Introduction 1

Background 1

Objectives 3

Project Outcome Successful Despite Schedule Delays and a 

Small Cost Increase 4

Modifications to Contract 4

Cost Increase for Muhalla 312 Project 4

Schedule Delays for Muhalla 312 Project 4

Contract Management and Oversight Were Generally Effective 6

Contract Files Contained Most Documents 6

Project Met MNC-I’s CERP Criteria 7

Proper Contract Solicitation and Award Process Were Used 7

Contract Statement of Work Was Well Defined 7

Contract Oversight Was Generally Effective 8

Payment Documentation Was Proper 9

Project Was Coordinated with GOI But Not with U.S. Reconstruction 

Agencies 10

Transfer and Sustainment of the Project Has Been Effective 11

Muhalla 312 Project Effectively Transferred to the GOI 11

Sustainment of Electrical Distribution Grid in Muhalla 312 11

Conclusions and Lesson Learned 15

Conclusions 15

Lesson Learned 15

Management Comments and Audit Response 15

Appendix A—Scope and Methodology 16

Appendix B—Acronyms 19

Appendix C—Audit Team Members 20

Appendix D—Management Comments 21
1

Commander’s Emergency Response Program: Muhalla 

312 Electrical Distribution Project Largely Successful

SIGIR 09-025 July 26, 2009

Introduction 

This is the fifth in a series of Special Inspector General for Iraq Reconstruction (SIGIR) audit 

reports on the Commander’s Emergency Response Program (CERP). Since October 2005, 

SIGIR has issued four reports on the management controls and accountability of CERP funds. 

This report focuses more narrowly on the outcome, cost, and oversight of one CERP project—

the electrical distribution grid in a Baghdad neighborhood known as Muhalla 312.1

 Muhalla 312 

is an approximately 10 square block area in the Al Ahdameya Governorate, which is located in a 

northeast area of Baghdad on the north side of the Tigris River. Figure 1 depicts a street scene in 

Muhalla 312. SIGIR selected this project for review because it is the most expensive CERP 

project completed thus far in Iraq. 

Background

CERP

In May 2003, the Coalition Provisional Authority formalized the CERP in Iraq, authorizing U.S. 

field commanders to use available funds to respond to urgent humanitarian, relief, and 

reconstruction requirements within the commander’s area of responsibility by executing 

programs that immediately assist indigenous populations and achieve focused effects. Initial 

funding for CERP came from seized Iraqi assets and the Development Fund for Iraq.2

 By late 

2003, the United States began to appropriate funds to the CERP; since 2003, the Congress has 

appropriated more than $3.58 billion for projects in Iraq. CERP is intended for small-scale, 

urgent humanitarian relief and reconstruction projects benefiting the Iraqi people, but larger scale 

projects may be undertaken if approved by appropriate Department of Defense officials. 

The Muhalla 312 Project 

In conjunction with the Government of Iraq (GOI), Multi-National Division-Baghdad (MND-B) 

designed the Muhalla 312 electrical distribution grid project to provide critical “last mile” 

electrical connections for the citizens in the neighborhood. The project cost nearly $12 million 

to provide power to about 12,000 people. 

The renovation of the electrical distribution grid enabled Muhalla 312 residents to receive 

electricity from the national grid from the amount available to Baghdad. U.S. Army Corps of 

 

1 Muhalla is the Arabic word for neighborhood.

2

In May 2003, the United Nations Security Council Resolution 1483 established the Development Fund for Iraq as 

a means to channel revenue from Iraqi oil sales, unencumbered oil-for-food deposits, and repatriated Iraqi assets to 

the relief and reconstruction efforts for Iraq.
2

Engineers Gulf Region Division-Central District (GRC) officials informed us that Muhalla 312 

was connected to the national grid on May 28, 2009. 

Figure 1—Street Scene in Muhalla 312

Source: SIGIR photograph taken during the site visit on May 20, 2009.

Responsible Organizations 

The Multi-National Corps-Iraq (MNC-I), headquartered in Baghdad, Iraq, provides the overall 

program coordination for the CERP in Iraq. MNC-I currently comprises seven major 

subordinate commands headquartered throughout Iraq. Brigade Combat Teams are located 

throughout the major subordinate commands’ areas of responsibility and are responsible for 

much of the day-to-day management of CERP projects. MNC-I publishes a policies and 

procedures manual, Money as a Weapon System (MAAWS), which directs program execution 

and establishes goals for CERP funding. At the time of contract award for the Muhalla 312 

project, the June 1, 2006 MAAWS was in effect. However, this guidance states that the primary 

reference document for the CERP is the MNC-I CERP Standard Operating Procedures (SOP), 

dated April 24, 2006. The MAAWS has since been revised and the MNC-I CERP SOP has been 

incorporated into the MAAWS. 

MND-B justified the project on the basis that the electrical distribution grid provided essential 

services to the citizens of the Muhalla. MND-B transferred CERP funds for the project to the 

Gulf Region Division (GRD) of the U.S. Army Corps of Engineers through four military 

interdepartmental purchase requests. According to an MND-B official, Muhalla 312 was the 
3

largest electrical distribution project undertaken with CERP funds in Iraq: it encompassed the 

entire Muhalla (estimated to be 10 square blocks). 

GRD provides engineering and construction services to Multi-National Force-Iraq and the GOI 

in support of military and civil construction through its division headquarters in Baghdad, three 

district offices, and numerous field offices located throughout Iraq. GRD’s Central District 

provided quality assurance for the project. 

Objectives 

Our reporting objectives were to examine: 

project outcome, in terms of final costs and completion time 

effectiveness of the contracting process and the oversight of the contract 

coordination of the project with other reconstruction agencies 

transfer to and sustainment by the GOI 

For a discussion of the audit scope and methodology, see Appendix A. For a list of acronyms 

used in this report, see Appendix B. For a list of the audit team members, see Appendix C. For 

management comments, see appendix D. 
4

Project Outcome Successful Despite Schedule Delays 

and a Small Cost Increase

The Muhalla 312 distribution grid project was generally successful. There was a minimal 

increase in the cost of the project; however, the project took considerably longer than anticipated. 

In November 2006, the Joint Contracting Command-Iraq/Afghanistan (JCC-I/A) awarded 

contract W91GXY-07-C-0002 to Civilian Technologies Limited (CTL) to rehabilitate the 

electricity distribution grid in Muhalla 312. Over the next 26 months, JCC-I/A issued four 

contract modifications that resulted in increasing contract costs by nearly $88,810 (less than 1%). 

Project delays were the result of challenges in obtaining approvals from the Iraqi Ministry of 

Electricity (MOE) and security problems that were beyond the control of the contractor. In 

January 2009, the electrical distribution grid project was completed and officially transferred to 

the MOE. 

Modifications to Contract 

Over the 26 months of the contract, JCC-I/A issued four modifications to contract W91GXY-07-

C-0002 for the Muhalla 312 project: 

Modification 1 (December 14, 2006) incorporated a clause for the contractor to support a 

U.S. Agency for International Development Community Stabilization Program for hiring 

Iraqi apprentices. 

Modification 2 (April 18, 2007) changed the line of accounting and the payment office 

address from Millington, Tennessee to Rome, New York. 

Modification 3 (April 22, 2007) de-obligated $11,676,000 and re-obligated $11,676,000 

to the same line of accounting to change the funding source. This modification also 

rescinded modification 2 in its entirety. 

Modification 4 (September 19, 2007) changed the secondary circuit breaker for the 

project, which increased the amount of the contract by nearly $88,810 because the MOE 

requested a circuit breaker with higher amperage. 

Cost Increase for Muhalla 312 Project 

A design change requested by MOE to increase the amperage from 630 to 1,000 resulted in a 

modification to increase the contract amount by nearly $88,810. The total amount of the contract 

increased from $11,676,000 to the final contract amount of nearly $11,764,810 (less than 1%). 

Schedule Delays for Muhalla 312 Project 

Our review identified construction delays for the electrical distribution project caused by the 

GOI approval processes and security problems in Muhalla 312. 
5

Even though JCC-I/A awarded the contract in November 2006, JCC-I/A did not issue the notice 

to proceed until October 16, 2007. The notice to proceed required the project to be completed 

within 120 days, or by February 14, 2008. However, the electrical distribution project was not 

completed until January 13, 2009—15 months after the notice to proceed. The following issues 

resulted in project delays that the contractor could not control: 

the contractor awaiting final approval from the MOE 

the contractor awaiting permits for the project from the MOE 

work stoppages because of a death threat to the contractor and an explosion in 

Muhalla 312 

According to GRD, CTL submitted the final design to the MOE on November 27, 2007; 

however, the MOE did not approve the new design until January 27, 2008. Further, until GRD 

provided additional funding to increase the amperage of the circuit breaker from 630 to 1,000, 

the MOE did not provide the proper permits for the project. Additionally, the contractor did not 

receive an excavation permit until February 6, 2008, which delayed the start of construction until 

February 11, 2008. The contractor continued work on the project until GRC issued a stop-work 

order because the contractor received a death threat letter on May 6, 2008. GRC lifted the stopwork order the next workday. GRC issued a second stop-work order on August 18, 2008, 

because of an explosion in Muhalla 312.3

 

3 GRC was unable to provide the date when the second stop-work order was lifted. 
6

Contract Management and Oversight Were Generally 

Effective 

We found that the contract management and project oversight were generally effective. The 

CERP Standard Operating Procedures (SOP) listed the criteria for project approval and award, 

and we found that documentation in the contract file generally complied with the CERP 

guidance. Additionally, the Statement of Work for the contract was well defined, and GRC’s

quality assurance oversight of the Muhalla 312 project was effective. We reviewed all eight of 

the contractor invoices, receiving documents, and payment forms and found that the U.S. Army 

Corps of Engineers had followed CERP guidance for the payment process. 

Contract Files Contained Most Documents 

Our review of the June 1, 2006 MAAWS showed that MNC-I’s CERP SOP, dated April 24, 

2006, was the primary reference document for use of CERP funds. We reviewed the SOP and 

identified the approval process and the documents required for using CERP funds. The contract 

file contained most of the required documents, except for the MNC-I Commander’s Clearance 

Memorandum and the Major Subordinate Command Comptroller Clearance Document. Table 2 

shows the results of our contract file review. 

Table 2—Documents Required by MNC-I CERP SOP for the Muhalla 312 Project

Required Documents

Document 

Provided to 

SIGIR

DA 3953 (Purchase Request and Commitment)/DD Form 1149 (Requisition and 

Invoice/Shipping document) Yes

DD Form 577 (Appointment/Termination Record - Authorized Signature)

a N/A

Copy of complete contract Yes

SF 44 (Purchase Order-Invoice-Voucher) or SF 1034 (Public Voucher for Purchases 

And Services Other Than Personal) Yes

DD Form 250 (Material Inspection and Receiving Report)bYes

Invoice from vendor (if provided) Yes

Project proposal or statement of work Yes

Commander’s Clearance Memorandum Noc

Major Subordinate Command Comptroller clearance memorandum Noc

Legal reviews Yes

Notes: 

a A warranted Contracting Officer is required for this project.

b

Form ENG 93 was used instead of DD Form 250 for this project. The ENG 93 is a computer form generated by the U.S. Army 

Corps of Engineers’ financial management system.

c

These documents were not provided to SIGIR.

Source: MNC-I CERP SOP and SIGIR Analysis
7

Project Met MNC-I’s CERP Criteria 

The MNC-I Commander approved the Muhalla 312 project using regulations and guidance that 

were in effect at that time. The regulations and guidance gave Commanders wide discretion as 

to the types of projects that could be undertaken. However, the National Defense Authorization 

Act (NDAA) for 2009 now caps CERP projects at $2 million unless the Secretary of Defense 

waives the limit. As a result, future projects similar to the Muhalla 312 project will receive more 

scrutiny. 

In January 2009, the DoD Financial Management Regulation was revised to implement the 

NDAA for Fiscal Year 2006, as amended by the NDAA for Fiscal Year 2008 and the NDAA for 

Fiscal Year 2009. The new regulation more clearly defines “urgent” as any chronic or acute 

inadequacy of an essential good or service that, in the judgment of a local commander, calls for 

immediate action. It also clarifies that CERP is intended for small-scale projects (less than 

$500,000). In Iraq, projects using CERP are capped at $2 million, but the Secretary of Defense 

may waive this limit if the Secretary determines that a project is required to meet urgent 

humanitarian relief and reconstruction requirements and notifies the Congressional Defense 

Committees within 15 days of the waiver. The law also requires the Secretary of Defense, or 

Deputy Secretary of Defense (if authority is delegated), to certify that all projects over $1 million 

address urgent humanitarian relief and reconstruction needs. MNC-I’s MAAWS manual has 

been updated to reflect these new requirements. 

Proper Contract Solicitation and Award Process Were Used 

The contract solicitation and award process for this project were proper. JCC-I/A issued the 

solicitation for award on September 19, 2006, and closed it on September 25, 2006. 

Documentation showed that 11 known Iraqi contractors selected by the contracting officer had 

the capability to meet the contractual performance requirements. According to JCC-I/A, the 

request for proposal listed two evaluation factors—technical and price. Technical was 

significantly more important than price. Four contractors submitted proposals, but JCC-I/A 

disqualified two because they were late. JCC-I/A determined that CTL was the only technically 

acceptable contractor. The contract was to CTL on November 26, 2006. 

Contract Statement of Work Was Well Defined 

The statement of work for this contract was well defined. It stated that the contractor would: 

Provide drawings, design, engineering, procurement, complete installation, testing, and 

commissioning for the installation of 11kV feeders and accessories. 

Install 46 kiosk4 substations, including transformers and ring main units. 

Install various cable sizes and lengths and 600 low-voltage feeder pillars5 and 

approximately 439 high-pressure mercury lamps. 

 

4

 A kiosk is a metal box that houses a transformer, high-voltage switchgear, and low-voltage switchgear. 

5

 A pillar is a plastic box that houses copper bars so that the low-voltage coming from the kiosk can feed into a 

centralized location and branch off into meter boxes at individual residences. 
8

Supply all engineering services and material—including all construction tools, 

equipment, and supervision necessary to rehabilitate the distribution networks per the 

MOE route surveys shown on the route map attached to the scope of work. 

Provide labor, fill, and any necessary construction equipment. 

Arrange for the MOE to be present for inspections and tests and to review changes to the 

work to ensure that any proposed resolution of problems was adequate technically and 

will produce a quality result. 

Be responsible for maintaining security on the work site 24 hours per day to deter theft of 

materials. Any lost materials would be the responsibility of the contractor. 

Use proven installation techniques attached to this scope of work. 

The statement of work also included the exact grid location of the electrical distribution grid in 

Muhalla 312. 

Contract Oversight Was Generally Effective 

Contract oversight was generally effective. During the project, GRC assigned two CORs that 

monitored the project’s progress, quality assurance and control, and approved payments made to 

the contractor. For example, one COR stated that he communicated with the contractor weekly, 

primarily via e-mail. The COR also stated that verbal communications with the contractor 

required the assistance of Iraqi bilingual employees who worked in the office. The Iraqi quality 

assurance representative (QAR) maintained project visibility for GRC to ensure that the 

contractor’s work complied with the terms and conditions of the contract. Further, the COR 

approved payments to the contractor based on a negotiated schedule of values that the QAR 

filled out periodically to verify the contractor’s completion percentage.

GRC hired an Iraqi engineer who completed the daily quality assurance reports. These multipage documents identified the subcontractors and included information on the construction 

completed, tests performed, security and safety issues, progress, and problems. Daily reports 

indicated that Iraq MOE technical staff was present at the construction site. For example, one 

report noted that a high-pressure test was conducted to verify the integrity of the entire route and 

indicated a satisfactory result. The QAR for this project told SIGIR that he was sufficiently 

trained for his duties as a QAR, communicated with the COR closely, and had sufficient 

communication with the contractor. 

In May 2009, we conducted a site visit to the electrical distribution grid in Muhalla 312 and 

observed that CTL installed kiosks, pillars, and high-pressure mercury lamps. The contractor 

also provided all engineering services and materials for the project, and submitted drawings and 

designs to the MOE for approval. Further, the QAR documented that the MOE was also present 

at inspections and tests throughout the project. Documents also show that CTL prepared and 

implemented quality control plans, safety plans, security plans, activity hazard analysis, and 

weekly tracking reports. 
9

Payment Documentation Was Proper 

SIGIR received all supporting payment documents required by CERP guidance. We reviewed 

all eight of the invoices that were based on a detailed analysis by the contractor, which were later 

verified by the COR in order for the contractor to be paid. Our analysis determined that the 

amounts listed in these invoices equaled the amount of the total contract amount—nearly 

$11,764,810. Additionally, we received payment documents from the U.S. Army Corps of 

Engineers finance center to confirm payments made to the contractor. 
10

Project Was Coordinated with GOI But Not with U.S. 

Reconstruction Agencies 

The project was coordinated effectively with the GOI; however, we were unable to confirm that 

MNC-I coordinated the project with other U.S. reconstruction agencies. The contractor sought 

approval from the MOE for design plans, permits, and other equipment used at the project. 

The electrical distribution grid project was effectively coordinated with the GOI. Additionally, 

GRC documentation showed that CTL worked closely with the MOE and GRC on the design 

and installation of the electrical distribution grid and that the MOE approved the design and 

installation for the project. From April 2007 through January 2008, CTL sought approval from 

the MOE for design plans, permits, and other equipment used for the project. For example, on 

September 23, 2007, the MOE approved the concrete pillar design for the project and submitted 

its approval to CTL. The MOE also provided written agreement for the light fittings, kiosks, 

lighting poles, pillars, and concrete base designs CLT submitted for the project. 

Lack of coordination for this project with other U.S. reconstruction agencies did not adversely 

impact the successful completion of the project; however, this should not be construed as an 

accepted practice. According to CERP guidance, commanders should coordinate and determine 

project needs with local Iraqi government agencies, civil affairs elements, engineers, and the 

Provincial Reconstruction and Development Councils or the Provincial Reconstruction Teams to 

gain the greatest effect and reduce duplicative efforts. Coordination of efforts includes 

complementary programs provided by the U.S. Agency for International Development and other 

non-governmental agencies operating in their area of responsibility. An Iraq Transition 

Assistance Office official in the electric sector stated that they were not aware of any 

coordination efforts between their organization and MNC-I. A senior Iraq Transition Assistance 

Office official stated that they do not ordinarily coordinate with CERP projects. Lack of project 

coordination could reduce the overall impact of the intended results. 

In technical comments on a draft of this report, MNC-I stated that it coordinates projects with the 

Provincial Reconstruction Teams because the PRTs possess the most current information on 

projects in their areas. SIGIR agrees that coordination with the Provincial Reconstruction Teams 

is a step in the right direction. However, PRTs may not always be aware of plans at the Embassy 

and agency level. Consequently, SIGIR believes that higher level coordination would be a better 

means of deconflicting plans, particularly as reconstruction planning becomes centralized under 

the Embassy’s new Deputy Chief of Mission for Assistance Transition in Iraq. 
11

Transfer and Sustainment of the Project Has Been 

Effective 

GRC effectively transferred the project to the GOI on January 13, 2009. When this project was 

completed, there was no requirement for MNC-I to obtain a sustainment plan from the GOI. 

Nonetheless, on May 20, 2009, SIGIR conducted a site visit to Muhalla 312 and found that the 

GOI was effectively sustaining the project. During the May site visit, SIGIR had an opportunity 

to speak with local Iraqis. It was evident that new businesses were in the process of opening, and 

the area was benefiting from the improved power distribution. 

Muhalla 312 Project Effectively Transferred to the GOI 

On January 13, 2009, GRC transferred the electrical distribution grid to the GOI. We reviewed 

the transfer letter and found that the COR and an MOE official signed the transfer letter officially 

transitioning the facility to the GOI. On January 13, 2009, the GOI received a notice of 

beneficial occupancy.6

 GRC’s QAR checked the construction and found no deficiencies. CTL 

provided a certificate of deliverables, dated January 13, 2009, signed by the COR, CTL, and an 

MOE official. CTL also provided a one-year warranty signed by the COR, CTL, and an MOE 

official which is effective until January 13, 2010. 

Sustainment of Electrical Distribution Grid in Muhalla 312 

Our comparison of the 2006 and 2009 versions of the MAAWS identified a key difference 

regarding CERP projects. The 2006 MAAWS did not require MNC-I to obtain sustainment 

plans from the GOI; consequently, MNC-I did not request sustainment plans. With MAAWS 

updates subsequent to 2006, there is a requirement for sustainment plans for all projects over 

$50,000. The intent of sustainment agreements is to educate GOI entities on the project and how 

to budget for the maintenance of an asset once it is transferred to them. 

On May 20, 2009, SIGIR visited Muhalla 312 and observed that the GOI was sustaining the 

electrical distribution grid project. While visiting the project, SIGIR observed several of the 

installed kiosks and pillars and confirmed that power lines from the distribution project were not 

visible. The cables from the kiosks were buried to prevent tapping into the power source. 

Further, SIGIR observed that the contractor had secured each of the kiosks and pillars with 

padlocks and metal bands. SIGIR observed that none of the kiosks or pillars appeared to have 

been tampered with (see Figures 2 and 3). According to an MND-B official, the project included 

the installation of 469 high-pressure mercury street lamps connected to the new distribution 

lines; cables from the kiosks and pillars are underground at least one meter to deter residents and 

shop owners from illegally tapping into the distribution lines. As shown in figures 4 and 5, the 

neighborhood appears to have a large amount of resident-installed electrical lines strung from 

building to building, which increases the risk of electrocution and disruption of power. 

 

6

 Occupants can move into an asset once it is completed even if the asset has not been transferred to the GOI. 
12

During our site visit, we interviewed local Iraqis. One Iraqi store owner was in the process of 

renovating his shop and connecting it to the renovated electrical distribution grid. We spoke 

with another Iraqi who stated that many of his neighbors’ homes were part of the new grid. An 

MND-B official stated that in his opinion the main contributing factor for the renewed business 

interest in Muhalla 312 was the result of improved security, the newly installed street lamps, and 

the improving supply of electrical power. Based on our observations in Muhalla 312, it was 

evident that new businesses were in the process of opening, and the area was benefiting from the 

improved electric distribution. 

Figure 2—Locked Kiosk

Source: SIGIR photograph taken during the site visit on May 20, 2009.
13

Figure 3—Banded and Locked Pillar

Source: SIGIR photograph taken during the site visit on May 20, 2009.

Figure 4—Resident-Installed Electrical Lines in Muhalla 312

Source: SIGIR photograph taken during the site visit on May 20, 2009.
14

Figure 5—Resident-Installed Electrical Lines in Muhalla 312

Source: SIGIR photograph taken during the site visit on May 20, 2009.
15

Conclusions and Lesson Learned 

Conclusions 

Although the project took longer to complete than anticipated because of GOI approval delays 

and construction site security issues, this was a successful CERP project. This supports an 

earlier SIGIR lesson learned that early engagement of GOI officials on projects can lead to a 

more effective transition and a commitment to sustain the project. Contract management and 

project oversight were effective, and the GOI is sustaining the electrical distribution grid even 

though MND-B did not obtain a sustainment agreement up front. The only minor problem noted 

is that the project was not coordinated with other U.S. reconstruction agencies. On the other 

hand, coordination with the GOI was excellent. 

Lesson Learned 

The Muhalla 312 electrical distribution grid project supports a key lesson learned that has been 

previously identified by SIGIR that should be applied in other CERP projects in Iraq and 

Afghanistan. The lesson learned shows that obtaining host country buy-in of a project and its 

design can contribute to an effective transition and commitment to sustain the project. 

Management Comments and Audit Response 

Management comments were not required because SIGIR did not make recommendations. 

Nevertheless, the Multi-National Corps-Iraq provided technical comments that we considered in 

preparing the final report. We included the comments in Appendix D. 
16

Appendix A—Scope and Methodology

The Special Inspector General for Iraq Reconstruction (SIGIR) initiated Project 9015 in April 

2009 to review the Commander’s Emergency Response Program (CERP) project for electrical 

distribution in Muhalla 312. SIGIR’s objectives for this report were to examine: (1) the project 

outcome, in terms of final costs and completion time; (2) the effectiveness of the contracting 

process and the oversight of the contract; (3) the coordination of the project with other 

reconstruction agencies; (4) the transfer to and sustainment by the Government of Iraq (GOI). 

To examine project outcome in terms of final costs and completion time, we: 

Met with officials from Joint Contracting Command-Iraq/Afghanistan (JCC-I/A), U.S. 

Army Corps of Engineers Gulf Region Division (GRD) and Gulf Region Central (GRC) 

district, Multi-National Division-Baghdad (MND-B), and Multi-National Corps-Iraq 

(MNC-I). 

Reviewed the contract, statement of work, and all modifications for the Muhalla 312 

project to examine project outcome. 

To examine the effectiveness of the contracting process and oversight of the contract, we: 

Met with officials from JCC-I/A, GRD, and GRC. 

Examined criteria and guidance in MNC-I’s Money as a Weapon System (MAAWS) and 

CERP Standard Operating Procedures (SOP) guidance, dated April 2006, to determine if 

the contracting process and oversight of the contract was effective. 

Reviewed the contract award documentation, solicitation paperwork, contract, statement 

of work, notice to proceed, and modifications for the Muhalla 312 project to determine if 

the contracting process was effective. 

Reviewed documents to determine if contract management was effective. 

Reviewed daily and weekly quality assurance reports completed by the Quality 

Assurance Representative (QAR) and the contractor to determine if project oversight was 

generally good. 

Reviewed remarks from surveys provided to the Contracting Officer Representative 

(COR) and the QAR that clarified their responsibilities and provided information on 

monitoring conducted during the Muhalla 312 project. 

To examine coordination of the project with other reconstruction agencies, we: 

Met with officials from Iraq Transition Assistance Office, JCC-I/A, GRD, and GRC. 

Reviewed documents that showed coordination between GRC, the contractor, and the 

GOI. 
17

To examine U.S. government efforts to transition to and sustainment of the project by the GOI, 

we: 

Met with officials from JCC-I/A, GRD, and GRC. 

Reviewed transfer documents for the Muhalla 312 project. 

Conducted a site visit to Muhalla 312 to observe the project and to determine if the GOI 

was sustaining the project. 

Interviewed local Iraqis to determine whether they believed the rehabilitation of the 

electrical grid was enhancing their standard of living. 

We performed this audit under authority of P.L. 108-106, as amended, which also incorporates 

the duties and responsibilities of inspectors general under the Inspector General Act of 1978, as 

amended. We conducted this review from April 2009 through July 2009 in accordance with 

generally accepted government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our audit objectives. 

Use of Computer-processed Data 

We used computer processed data from the U.S. Army Corps of Engineers’ Financial 

Management System and the Iraq Reconstruction Management System to determine if payments 

were obligated and paid for this project. To determine the reliability of the data provided, we 

validated the data provided with other documents in the JCC-I/A and GRC contract files. We

determined that this data was the best available for the purposes of our review. 

Internal Controls 

In conducting the audit, we assessed certain internal controls pertinent to the audit objectives 

regarding the administration and oversight of CERP. Specifically, we identified and reviewed 

internal and management control procedures in the MNC-I CERP SOP and MAAWS for CERP 

projects. We relied on available documents in the contract files and analyzed these documents to 

determine if the internal controls for this project were adequate. The specific results of our 

review are contained in the findings sections of the report. 

Related Reports by SIGIR 

Commander’s Emergency Response Program: Hotel Construction Completed, But 

Project Management Issues Remain Unresolved (SIGIR 09-026), 7/23/2009. 

Commander’s Emergency Response Program in Iraq Funds Many Large-scale Projects 

(SIGIR 08-006), 1/25/2008. 

Management of the Commander’s Emergency Response Program in Iraq for Fiscal Year 

2006 (SIGIR 07-006), 4/26/2007. 
18

Management of the Commander’s Emergency Response Program for Fiscal Year 2005 

(SIGIR 05-025), 1/23/2006. 

Management of Commanders’ Emergency Response Program for Fiscal Year 2004 

(SIGIR 05-014), 10/13/2005. 
19

Appendix B—Acronyms 

Acronym Definition

CERP Commander’s Emergency Response Program

COR Contracting Officer’s Representative

CTL Civilian Technologies Limited

GOI Government of Iraq

GRC U.S. Army Corps of Engineers, Gulf Region Central

GRD U.S. Army Corps of Engineers, Gulf Region Division

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

MAAWS Money as a Weapon System

MNC-I Multi-National Corps-Iraq

MND-B Multi-National Division-Baghdad

MOE Ministry of Electricity

QAR Quality Assurance Representative

SIGIR Special Inspector General for Iraq Reconstruction

SOP Standard Operating Procedures
20

Appendix C—Audit Team Members 

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

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

Reconstruction. 

The staff members who conducted the audit and contributed to the report include: 

Clarence Brooks 

Dorian L. Herring 

Milton L. Naumann 

Nancee K. Needham 

William Shimp 
21

Appendix D—Management Comments 
22

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

operations in Iraq, the Special Inspector General for Iraq 

Reconstruction provides independent and objective:

oversight and review through comprehensive audits, 

inspections, and investigations

advice and recommendations on policies to promote 

economy, efficiency, and effectiveness

deterrence of malfeasance through the prevention and 

detection of fraud, waste, and abuse

information and analysis to the Secretary of State, the 

Secretary of Defense, the Congress, and the 

American people through Quarterly Reports

Obtaining Copies of SIGIR 

Reports and Testimonies

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

SIGIR’s Web site (www.sigir.mil).

To Report Fraud, Waste, and 

Abuse in Iraq Relief and 

Reconstruction Programs

Help prevent fraud, waste, and abuse by reporting 

suspicious or illegal activities to the SIGIR Hotline:

Web: www.sigir.mil/submit_fraud.html

Phone: (703)602-4063

Toll Free: (866) 301-2003

Congressional Affairs Hillel Weinberg

Assistant Inspector General for 

Congressional Affairs

Mail: Office of the Special Inspector General 

for Iraq Reconstruction

400 Army Navy Drive

Arlington, VA 22202-4704

Phone: (703) 604-0368

Email: hillel.weinberg@sigir.mil

Public Affairs Daniel Kopp

Assistant Inspector General for Public Affairs

Mail: Office of the Special Inspector General 

for Iraq Reconstruction

400 Army Navy Drive

Arlington, VA 22202-4704

Phone: (703) 428-1217

Fax: (703) 428-0818

Email: PublicAffairs@sigir.mil