SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

2530 Crystal Drive • Arlington, Virginia 22202 

January 29, 2012 

LETTER FOR SECRETARY OF DEFENSE 

COMMANDER, U.S. CENTRAL COMMAND 

COMMANDING GENERAL, U.S. ARMY CORPS OF ENGINEERS 

SUBJECT: Few Contracts Terminated by the U.S. Army Corps of Engineers Resulted in 

Wasted Funds in Iraq (SIGIR 12-011) 

As of July 2011, over $38 billion had been appropriated or allocated to the Department of 

Defense for reconstruction programs in Iraq. Primary funding sources for the department’s 

contracts were: $4 billion of Commander’s Emergency Response Program funds, $14 billion 

from the Iraq Relief and Reconstruction Fund, and $20.5 billion from Iraq Security Forces 

Funds. 

This report examines the U.S. Army Corps of Engineers’ (USACE) Iraq reconstruction contracts 

terminated from June 2008 through April 2011. We undertook this review to examine the 

outcomes of USACE-terminated contracts to determine if the agency maintains effective controls 

over contracts and if wasted U.S. funds resulted from the execution of these contracts. 

USACE terminated 55 reconstruction contracts during the period reviewed. This is far fewer 

than the 227 contracts terminated by USACE from 2005 through June 2008. According to 

USACE senior contracting officials, the reduction is attributable to several reasons, including 

improved security conditions in Iraq, USACE improvements in contract management, and a 

smaller reconstruction program. Thirty-one contracts were terminated at the convenience of the 

government because requirements changed and the services were no longer needed, and 24 

contracts were terminated for default due to poor contractor performance. 

We could not determine if there was waste associated with 22 of the 55 terminated contracts 

because USACE could not find eleven contract files, and we could not determine from available 

documentation if the other eleven terminated contracts were reawarded and the projects 

successfully completed. For the remaining 33 terminated contracts, we determined that 10 

resulted in approximately $3.8 million in waste, 8 had possible waste in amounts that were 

indeterminate, and 15 had no waste that we could determine. Better planning and coordination 

by USACE, its customers, and the Iraqi government could have avoided much of the waste. We 

recognize that wasted funds on 18 terminated contracts do not indicate systemic problems for an 

agency that has managed hundreds of contracts. For example, according to USACE, it 

completed or terminated 864 contracts with a total value of $2.5 billion from June 2008 through 

April 2011. However, we believe lessons can be learned from these terminations. 

Background 

USACE changed its organizational structure in Iraq several times since 2005; however, we refer 

to the responsible contracting agency as USACE throughout the report. USACE’s reconstruction 
2 

contracts in Iraq were funded primarily by the Iraq Relief and Reconstruction Fund, the 

Commander’s Emergency Response Program, and the Iraq Security Forces Fund. 

The Federal Acquisition Regulation (FAR) provides the most authoritative government 

guidelines for terminating contracts and identifies three types of terminations: 

 Termination for Default—If a contractor fails or is anticipated to fail to perform its 

contractual obligations, the government has the right to completely or partially terminate 

the contract for default. Default terminations are most often due to the contractor’s 

failure to make delivery of the required supplies or perform the required services within 

the time specified in the contract. 

 Termination for Convenience—If the government determines that cancellation of a 

contract is in its best interest, it can cancel work under that contract for “convenience.” 

For example, the government can cancel a contract for convenience when funds are no 

longer available for continued contract performance, the requirements are no longer 

needed, or changed circumstances make it impossible for the contractor to perform the 

work. 

 Termination for Cause—If a contractor fails to comply with any contract terms and 

conditions for commercial items, or fails to provide the government, upon request, with 

adequate assurances of future performance, the government may terminate the contract, 

or any part of the contract, for cause. 

Missing contract files and incomplete documentation to determine project results limited our 

review of USACE’s contract terminations. In general, SIGIR believes that the missing contract 

files are a temporary condition resulting from the withdrawal of U.S. forces from Iraq and the 

relocation of files and records back to the United States. However, the result is that in some 

cases, we could not determine the total amount spent and the final outcome of the project, two 

elements necessary to identify waste. 

USACE performed contracting and construction management services for hundreds of 

reconstruction projects in Iraq on behalf of a customer, usually a U.S. military unit. The 

government of Iraq and the U.S. Embassy also played significant roles in the planning and 

successful completion of projects. In addition, unforeseen and uncontrollable events also 

impacted project outcomes. The decision to terminate a contract is sometimes in the best interest 

of the U.S. government when it prevents the further expenditure of funds on a project headed for 

an unfavorable outcome. The contracting agency and the customer jointly make decisions to 

terminate a contract or to continue. Each contract has multiple parties involved that share 

responsibility for contract success or failure and any wasted funds. 

USACE Contract Management Improvements and Other Factors 

Contributed to Fewer Contract Terminations

We found that only 55 USACE contracts in Iraq were terminated from June 2008 through April 

2011 whereas 227 USACE contracts were terminated through June 2008. There were fewer 

terminated contracts during the recent period because USACE managed fewer contracts, security 
3 

conditions in the country improved, contractor performance improved, and the agency improved 

its contract management. 

Fewer USACE Contracts Were Terminated in the Reconstruction Program’s Latter Stages 

Our prior review of contract terminations1

 found that 227 USACE Iraq reconstruction contracts 

were terminated, including 137 for the convenience of the government and 90 for cause or 

default. From June 2008 through April 2011, however, only 55 USACE reconstruction contracts 

were terminated: 31 for the convenience of the government, and 24 for default. None were 

terminated for cause. The reconstruction program in Iraq changed in size, scope, and direction 

between these two time periods, thus inhibiting a good comparison; nonetheless we believe the 

significantly smaller numbers indicate positive changes in the management of the contracts. 

Terminations Declined for Multiple Reasons, Including Contract Management Improvements 

USACE senior contracting officials cited multiple reasons for the significant decline in the 

number of terminations in the latter period. First, according to the officials, USACE used better 

tools for vetting potential contractors in Iraq before contract award. We were told by the 

officials that USACE contracting personnel review past performance evaluations in USACE’s 

Construction Contractor Appraisal Support System. The information system serves as a 

repository for USACE contractor performance evaluations required under Federal Acquisition 

Regulation 42.1502. 

USACE senior contracting officials further stated that in 2009, USACE gained access to U.S. 

Central Command Contracting Command’s Joint Contingency Contracting System, another 

information system that housed contractor data. The officials stated USACE also used the 

Federal Awardee Performance and Integrity Information System, a web-based system that came 

online in 2010 and that integrates information about contractors from multiple sources. In 

addition, inter- and intra-agency coordination improved over time. USACE senior contracting 

officials stated that starting in January 2004, USACE had three districts and multiple offices 

throughout Iraq. Information about a contractor in one office was not always effectively shared 

with the others. As the Iraq reconstruction program matured, USACE evolved, consolidated, and 

eventually drew down. The sharing of information among its offices improved, and coordination 

with U.S. Central Command and the United States Agency for International Development 

improved as well. 

In addition to better vetting of contractors, USACE contracting officials stated there were other 

reasons for the decline in the number of terminations. Improved security conditions in Iraq were 

a major factor supporting the successful completion of USACE contracts. In addition, as the 

Iraqi government was established, the country’s borders became more secure and it became 

easier to import construction materials. The officials stated that Iraq’s banking system improved, 

facilitating the financial component of construction projects. These advances contributed to an 

environment where contractors stood a better chance of completing their contracts. 

Senior contracting officials also stated that the agency improved its development of contract 

scope-of-work and became more sophisticated in determining the appropriate period of 

 

1 Iraq Reconstruction Project Terminations Represent a Range of Actions, SIGIR 09-004, 10/27/08. 
4 

performance. Furthermore, the officials stated they were able to emphasize to USACE 

customers the importance of performing preliminary reviews of potential projects in determining 

what could be achieved. These reviews pose questions such as: 

 Will contractors be able to bid on the proposed contract? 

 Will contractors be able to build the proposed structure? 

 Once built, will the users be able to operate the project? 

U.S. military units were USACE’s major customers and the units turned over frequently. 

USACE contracting officials stated that each time a new unit arrived with ambitious plans, 

USACE had to reargue the importance of planning and reviews. However, over time, USACE 

gathered enough historical evidence of the relationship between planning and the success of 

projects to impress arriving military units of the value of the preliminary review process. 

USACE officials believe this emphasis on reviews helped the program develop projects and 

contracts that had a better chance of success. 

Improvements in contract and project oversight also contributed to the reduction in terminations. 

The USACE contracting officials stated the agency significantly improved the contracting officer 

representative program, deploying better qualified staff to oversee projects. These 

representatives are the U.S. government’s most common interface with the contractors at the 

construction sites. The senior contracting officials further stated that USACE also developed 

smart and reliable Iraqi local nationals to support oversight. In addition, the officials stated the 

reconstruction program’s smaller size and improved contractor performance also contributed to 

the reduction in the number of terminations. 

USACE Used Performance Evaluations To Document PoorPerforming Contractors 

We identified 24 contracts terminated for default during the relevant period. USACE used 

performance evaluations to document poor performing contractors in Iraq. We could not find 

one instance where USACE referred a contractor for suspension or debarment, although we 

found a few instances that raised questions about the degree to which contractors’ performance 

are being reviewed for suspension or debarment. 

Federal Regulations Prescribe Conditions for Suspension and Debarment of Contractors 

The FAR states that an agency should consider debarment when a contractor is convicted or 

loses a civil judgment for commission of a fraud or criminal offense connected with obtaining or 

performing a public contract. Debarment should also be considered when a contractor is 

convicted or loses a civil judgment for, among other things, commission of embezzlement, theft, 

bribery, falsification of records, or commission of any offense indicating a lack of business 

integrity or business honesty that seriously affects the responsibility of a government contractor. 

A suspension of the contractor can occur when the agency merely suspects, with adequate 

evidence, the contractor of the same violations. The U.S. Army, Legal Services Agency has 

been designated the debarring and suspending authority for the Army. 
5 

The existence of a cause for debarment does not necessarily require that the contractor be 

debarred; the seriousness of the contractor’s acts or omissions and any remedial measures or 

mitigating factors should be considered in the debarment decision. The debarring official may 

debar a contractor for violation of the terms of a government contract or subcontracts, such as 

willful failure to perform in accordance with the terms of one or more contracts or a history of 

failure to perform or unsatisfactory performance. 

Agencies are required to post the names and addresses of suspended and debarred contractors on 

the Excluded Parties List System (EPLS), a web-based database system. The posting is to 

include the name of the agency taking the action, the cause of the action, the effect of the action, 

the termination date for each listing, and the identifying employer numbers, if available. The 

FAR, subpart 9.4, requires agencies to use EPLS to screen contractors prior to award of 

contracts. 

Contractors debarred, suspended, or proposed for debarment are excluded from receiving 

contracts, and agencies should not solicit offers from, award contracts to, or consent to 

subcontracts with these contractors, unless the agency head determines there is a compelling 

reason for such action. After the opening of bids or receipt of proposals, the contracting officer 

should review the EPLS. Bids received from any listed contractor should be rejected unless the 

agency head determines that there is a compelling reason to consider the bid. 

We Found No Records of Suspension or Debarment of USACE Contractors 

USACE terminated 114 contracts for default during the entire reconstruction period. Our earlier 

review found no records that USACE referred poor performing contractors in Iraq for suspension 

or debarment through June 2008.2

 Likewise, our current review found no records that USACE 

referred contractors for suspension or debarment from June 2008 through April 2011. We found 

two terminated contracts that raise questions about the degree to which contractor performance is 

being reviewed for suspension or debarment. 

USACE terminated contract W917BE-10-C-0004, a contract to construct a school, for default on 

October 25, 2010. The U.S. government did not spend any funds on the contract as it was 

terminated before any work was performed. A USACE engineer completed a performance 

evaluation on the contractor, writing in the remarks section: 

I heartily recommend we disbar or terminate this contractor based not only [on] 

information I’ve recently found out, but also for non-responsiveness in the 

execution of the contract. Primarily, however, the submission of fraudulent 

paperwork to attain this bid which they were awarded should be sufficient to 

stand by itself. With what I’ll present below, I’m 99.99% convinced [contractor’s 

name] used fraudulent paperwork and manufactured evaluation comments to 

attain the AI Oahkel School award. In short, the TEB [Technical Evaluation 

Board] board for this contract was ‘hoodwinked’ by [contractor’s name]. 

The evaluator further states that the contractor was formerly a company that had been debarred 

and had simply changed its name and reestablished itself under the new name. The USACE 

 

2 Iraq Reconstruction Project Terminations Represent a Range of Actions, SIGIR 09-004, 10/27/08. 
6 

evaluator also found that the phone numbers and e-mail addresses of past performance evaluators 

listed in the contractor’s proposal were nonworking and concluded they were phony. In addition, 

the USACE evaluator determined that the contractor’s proposal was too similar in format and 

content to another proposal, suggesting they were prepared by the same company. The evaluator 

concluded that the contractor was just an offshoot of another already debarred contractor, only 

working under a different name. The USACE reviewer of the performance evaluation, a 

contracting officer, concurred with the evaluation. The evaluation suggests the contractor acted 

unethically, but there is no indication the Army suspended or debarred the contractor. 

USACE terminated contract W917BE-09-C-0031, a contract to refurbish the Al Rashad water 

compact unit, for default on March 25, 2010. The U.S. government did not spend any funds on 

the contract as it was terminated before any work was performed. In his contractor performance 

evaluation, the USACE Resident Engineer wrote, “Contractor refused to complete or start the 

project due to security concerns. The security situation did not change between the contractor’s 

bid and the start of the project. Contractor under bid (sic) the contract and sited (sic) security 

concerns in order to get out of the contract.” Again, the contractor acted unethically, but there is 

no indication the Army suspended or debarred the contractor. 

A senior USACE contracting official who served in Iraq stated that USACE would consider 

suspension or debarment of contractors if the circumstances warranted it. The official said that 

the agency must look at the contractor’s performance on all contracts, not just the one that ends 

in default. The official stated that terminations for default sometimes happen when good, 

productive contractors simply take on too much work and do not have the resources to finish it. 

The official further stated that tribalism in Iraq sometimes impacts contractor performance. The 

official said that a contractor might successfully complete projects in Baghdad, for example, but 

the same contractor might fail when taking work in Talil or southern Iraq. 

USACE contracting officials emphasized the contractor performance evaluations entered into the 

Construction Contractor Appraisal Support System as USACE’s primary action against poorperforming contractors. We did not find a case where the contractor on a contract terminated for 

default was subsequently awarded another contract that was terminated. One contractor had two 

terminations for default, but the periods of performance overlapped. We acknowledge that 

USACE’s contracting office has discretion regarding suspensions and debarments. However, we 

find it remarkable that USACE terminated 114 contracts for default since the start of the 

reconstruction program in Iraq, yet we cannot identify a single suspension or debarment. 

Some Terminated Contracts Resulted in Unfinished Projects and 

Wasted Funds 

We could not determine if there was any waste for 22 terminated contracts because USACE 

could not find 11 contract files, and we could not determine from available documentation if the 

other 11 terminated contracts were reawarded and the projects successfully completed. For the 

remaining 33 terminated contracts, we determined that 10 resulted in nearly $3.9 million in 

waste, 8 contracts at a total cost of $11.1 million resulted in possible waste of an indeterminate 

amount, and 15 had no waste that we could determine. The termination of a contract and any 

associated waste is not solely USACE’s responsibility. The U.S. military units that were the 
7 

customers for these projects share responsibility when poor planning, badly written contracts, lax 

oversight of poor performing contractors, and other deficiencies occur that result in waste. Other 

parties such as the contractor, the U.S. Embassy, and the government of Iraq and its ministries 

also contribute to the success or failure of construction contracts. For a full list of contracts that 

resulted in waste or possible waste, see Appendix B. 

Terminated Contracts Resulted in Approximately $3.8 Million in Waste 

We identified 10 terminated contracts that we believe resulted in $3.8 million of wasted funds. 

In most cases, the waste might have been avoided by better U.S. government planning and better 

coordination among the various parties, especially with the Government of Iraq. We recognize 

that 10 wasteful contracts out of the hundreds managed by USACE is not an indicator of 

systemic problems. For example, according to USACE, it completed or terminated 864 contracts 

with a total value of $2.5 billion from June 2008 through April 2011. However, we believe 

lessons can be learned from the two terminations discussed below. 

Ghazaliya Pump Station Contract

On October 10, 2008, USACE terminated contract W917BG-07-C-0088 for the construction of 

the Ghazaliya sewage and pump station. USACE suspended work on June 24, 2008, because the 

Baghdad Amanat (the city’s public works department) sent a letter to USACE directing that the 

construction be stopped until the contractor obtained Amanat approval of all designs, material 

tests, and permit. The Mayor of Baghdad and the Amanat would not allow the contractor to 

resume work; therefore USACE terminated the contract for the convenience of the U.S. 

government. The U.S. government had already spent over $1.9 million on the project. While 

responsibility for the waste does not fall exclusively on USACE, we believe better planning and 

coordination between the U.S. agencies involved and the Baghdad government might have 

prevented $1.9 million in waste that could have been put to better use. 

Al Kut Force Protection Base Contract

On September 28, 2009, USACE awarded contract W917BK-09-C-0069 for the construction of a 

new training center in Al Kut. However, after more than one year of work, USACE and the 

customer, United States Forces–Iraq, determined that the facility was no longer needed by the 

Iraqi police because the Iraqi police planned to start constructing their own training facility in 

August 2011. Since the requirement for the contract no longer existed, USACE terminated the 

contract on December 18, 2010, for the convenience of the government. The U.S. government 

spent almost $1 million on the terminated contract. Better planning and coordination between 

the U.S. agencies and the Iraqi Police might have provided nearly $1 million that could have 

been put to better use. 

Terminated Contracts May Have Resulted in Additional Wasted Funds 

We identified eight contracts costing a total of $11.1 million that may have had an indeterminate 

amount of waste because we could not determine the utility of the contracts’ ultimate products. 

For example, two contracts, W917BG-07-C-0001 and W197BG-09-C-013, were for the 

renovation of the Baghdad International Airport Convention Center. The U.S. government spent 
8 

approximately $5.3 million on the two terminated contracts. As we previously reported3

, shortly 

before the transfer of the project to the government of Iraq on January 20, 2010, the convention 

center still required significant work and was not connected to the main power supply. 

Nonetheless, two events were held in an unfinished hall in late 2008 and a third in December 

2009. USACE provided pictures and a site inspection report from December 2011 indicating 

one terminal still required significant work, but the second terminal was functional. Although it 

appears funds were wasted on the project, it is difficult to determine the precise amount of waste.

In another example, the contractor abandoned contract W91BG-05-C-0218 for the renovation of 

the Radwaniya water treatment plant network, and USACE terminated the contract for default. 

On April 30, 2009, USACE unilaterally transferred the project to the Iraqi Ministry of 

Municipalities and Public Works “as is.” In a memorandum, USACE stated the project was 95% 

complete, but also identified deficiencies at the time of the transfer, including: 

 The service connections were not completed. 

 The reservoir tank was not installed. 

 The booster pumps were not installed. 

 The hydrostatic pressure test of the water network was not conducted. 

The U.S. government had spent approximately $2.9 million at the time of the transfer. The 

project was not functional when it was unilaterally transferred to the Ministry. If the Iraqis do 

not complete the project, the funds will be mostly wasted. 

Concluding Observation 

As the U.S.-led reconstruction program in Iraq matured, improvements in USACE’s contract 

management, as well as better security conditions and a more stable Iraqi government, reduced 

the number of USACE contract terminations and the associated waste. For USACE contracts 

terminated from June 2008 through April 2011, we identified approximately $3.8 million in 

waste on 10 contracts and an indeterminate amount of waste on 8 other contracts costing 

approximately $11.1 million. While all waste should be avoided, we believe that USACE, in 

conjunction with its customers, contractors, and the Iraqi government, executed its contracts 

more efficiently and effectively during this latter period. 

We found no evidence that USACE referred contractors in Iraq for suspension or debarment. 

However, the agency did use performance evaluations to identify poor-performing contractors 

and to avoid recurring problems. While the use of suspension and debarment tools is 

discretionary, they are appropriate remedies in certain situations where contractors behave 

unethically, as outlined in the FAR. We found examples of terminated contracts that raise 

questions about the degree to which contractor performance is being reviewed for suspension or 

debarment. 

 

3 Commander’s Emergency Response Program: Projects at Baghdad Airport Provided Some Benefits, but Waste 

and Management Problems Occurred, SIGIR 10-013, 4/26/10. 
9 

Management Comments and Audit Response 

USACE stated that it believes the report should clarify that USACE does not have the authority 

to suspend or debar contractors. SIGIR believes that it has addressed USACE’s concern in the 

final report. The final report states that the U.S. Army, Legal Services Agency has been 

designated the debarring and suspending authority for the Army. Also, the report now states that 

SIGIR found no records that USACE referred contractors for suspension or debarment. 

- - - - 

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

report, please contact Glenn D. Furbish, Assistant Inspector General for Audits (Washington, 

DC) (703) 604-1388/ glenn.d.furbish.civ@mail.mil or Jim Shafer, Principal Deputy Assistant 

Inspector General for Audits (Washington, DC), (703) 604-0894/ fred.j.shafer.civ@mail.mil. 

Stuart W. Bowen, Jr. 

Inspector General 
10 

Appendix A—Scope and Methodology 

Scope and Methodology

In April 2011, the Special Inspector General for Iraq Reconstruction (SIGIR) initiated Project 

1108 to examine U.S. Department of Defense terminated contracts in Iraq and potential waste. 

In October 2011, we issued a report on the U.S. Central Command Contracting Command’s 

terminated contracts.4

 Our objectives for this report are to examine the outcomes of the U.S. 

Army Corps of Engineers’ (USACE) terminated contracts to determine if USACE maintains 

effective controls over contracts and to determine whether terminated contracts resulted in 

wasted U.S. funds. This report discusses USACE contracts terminated from June 2008 through 

April 2011. This audit was performed by SIGIR 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. SIGIR conducted its work from April 2011 through January 

2012 in Baghdad, Iraq and Winchester, Virginia. 

To identify the numbers, types, and basis for all USACE-terminated reconstruction contracts, we 

obtained and reviewed a list of terminations provided by USACE. We also reviewed contract 

files. 

To determine why the number of terminated contracts had decreased over time, we interviewed 

USACE contracting officials. We also reviewed contract files. 

To determine actions taken against poor performing contractors, we reviewed relevant sections 

of the Federal Acquisition Regulation and contractor performance evaluations in the contract 

files. We also interviewed senior USACE contracting officials. 

To determine whether terminated contracts resulted in waste, we obtained and analyzed financial 

data, planning documents, contracts, modifications, termination letters, and correspondence in 

the terminated contract files provided by USACE. We also obtained and analyzed additional 

information about project outcomes provided by current USACE officials. 

The audit was conducted 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 

To achieve the audit objectives, we relied on computer-processed data contained in the Corps of 

Engineers Financial Management System and Excel spreadsheets. We also used the Iraq 

Reconstruction Management System as a secondary source to confirm data and to fill in some 

missing data where records were incomplete. We sampled source documents to test the accuracy 

 

4 U.S. Central Command Contracting Command Had Few Contract Terminations That Resulted in Wasted Funds in 

Iraq, SIGIR 12-005, 10/28/2011. 
11 

of the data. Based on these tests, we conclude the data are sufficiently reliable to be used in 

meeting the audit’s objectives. 

Internal Controls 

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

with respect to USACE’s contract management. Specifically, we identified and assessed 

management controls, including procedures for (1) management and legal review of contracting 

actions, (2) vetting non-U.S. vendors in Iraq, (3) determining responsible prospective 

contractors, and (4) terminating contracts. 

Prior Coverage 

We reviewed the following reports by SIGIR and the Government Accountability Office: 

Special Inspector General for Iraq Reconstruction 

U.S. Central Command Contracting Command Had Few Contract Terminations That Resulted in 

Wasted Funds in Iraq, SIGIR 12-005, 10/28/2011. 

Iraq Reconstruction Project Terminations Represent a Range of Actions, SIGIR 09-004, 

10/27/2008. 

Interim Report on Iraq Reconstruction Contract Terminations, SIGIR 08-013, 4/28/2008. 

Government Accountability Office 

Defense Acquisitions: Termination Costs Are Generally Not a Compelling Reason to Continue 

Programs or Contracts that Otherwise Warrant Ending, GAO-08-379, 3/2008.

 
12 

Appendix B – Contracts That Resulted in Waste or 

Possible Waste 

Contracts That Resulted in Waste 

We found 10 terminated contracts that resulted in waste totaling $3,833,834. The U.S. Army 

Corps of Engineers (USACE) did not reaward these contracts, and there is no evidence of a 

completed project. Table 1 presents a summary of the contracts. 

Table 1—Summary of USACE Contracts with Waste 

Contract Number Services Reasons for 

Termination 

Wasted Funds

W917BG-07-C-0088 Construct Sewage and 

Pump Station 

Baghdad City 

Government Did Not 

Approve Plans 

$1,964,451

W917BK-09-C-0069 Construct Force 

Protection Base 

Iraqi Police Were 

Constructing Their Own 

Base 

986,090

W917BG-07-D-0013-

0008 

Water Project Discovery of Closer 

Water Source 

498,500

W917BG-06-D-0021-

0008 

Construct Boys School Failure to Obtain 

Required Land Deed 

253,524

W917BE-08-C-0015-

0007 

Construct Police Station Failure to Obtain 

Required Land Deed 

54,538

W917BG-09-C-0035 Construct Police Station Iraqi Police Did Not 

Want to Vacate Site to 

Allow Construction 

40,000

W197BG-08-C-0061 Construct Fuel Station Failure to Obtain 

Required Land Deed 

11,880

W917BK-07-P-0021 Assessment of Primary 

Healthcare Centers 

Contractor Failed to 

Perform 

10,000

W917BG-07-D-0007-

0026 

Repairs at Taji National 

Depot 

Services No Longer 

Required 

7,500

W917BG-07-D-0010-

0014 

Repairs at Taji National 

Depot 

Services No Longer 

Required 

6,901

Total $3,833,834

Source: SIGIR Analysis of USACE contract files and other USACE documentation. 

Contracts with Possible Waste 

We found eight contracts that resulted in possible waste, the amount of which we could not 

determine. The projects were not completed as planned, but the customer may have received 

some value, such as procurement of supplies and equipment used elsewhere, in return for the 
13 

spending on the contract. Therefore, although waste on the contract is likely, we could not 

determine the amount. Table 2 presents a summary of the contracts. 

Table 2—Summary of USACE Contracts with Possible Waste 

Contract Number Services Reasons for 

Termination 

Total Spent on the 

Contract

W917BG-07-C-0001 Construct Baghdad 

Convention Center 

Poor Contractor 

Performance 

$5,103,028

W917BG-05-C-0218 Construct Water 

Treatment Plant 

Contractor Failed to 

Complete 

2,931,385

W91GY0-08-C-0054 Construct Police 

Stations 

Poor Contractor 

Performance 

1,950,563

W917BE-08-C-0018 Rosti Valley Joint 

Venture 

Flash Floods Destroyed 

Most of the Project 

560,542

W917BG-09-C-0013 Construct Baghdad 

Convention Center 

Failure to Negotiate 

Management Contract 

227,929

W917BK-05-P-0127 Construct School Poor Contractor 

Performance 

162,800

W917BG-09-P-0220 Signal Maintenance 

Platoon Facility 

Poor Contractor 

Performance 

152,340

W91GW-08-C-2013 Mosul Dam Grout 

Mixing Plant 

Change in 

Requirements 

25,383

Total $11,113,969

Source: SIGIR Analysis of USACE contract files and other USACE documentation. 

 
14 

Appendix C—Acronyms 

Acronym Description 

EPLS Excluded Party List System 

FAR Federal Acquisition Regulation 

SIGIR Special Inspector General for Iraq Reconstruction 

USACE U.S. Army Corps of Engineers 

 
15 

Appendix D—Audit Team Members 

This report was prepared and the audit conducted under the direction of Glenn D. Furbish, 

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

Reconstruction. 

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

Angelina Johnston 

Robert Pelletier 

William Shimp 

 
16 

Appendix E—Management Comments 
17 

Appendix F—SIGIR Mission and Contact Information 

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 

2530 Crystal Drive 

 Arlington, VA 22202-3940

Phone: 703-428-1059 

Email: hillel.weinberg.civ@mail.mil 

Public Affairs Christopher Griffith 

Director of Public Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

2530 Crystal Drive 

 Arlington, VA 22202-3940

Phone: 703-604-0693 

Fax: 703-428-0818 

Email: PublicAffairs@sigir.mil