Special Inspector General 

for Iraq Reconstruction

Iraq Reconstruction:

Lessons in Program and 

Project Management

[March 2007]

3
 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 

Contents

Preface

overview

Key Questions • A Note on Scope and Methodology

recommendations

Pre-ORHA through early cpa

(fall 2002 to August 2003)—

initiating the program

Initial Planning for Relief and Reconstruction • Insufficient 

Capacity To Meet Immediate Needs • ORHA Shifts to CPA • 

Management of Vested Iraqi Funds • Management of Seized 

Funds • Management of DFI Funds • Management of U.S. 

Funds • Program Review Board • Re-thinking the Relief and 

Reconstruction Program

The Later CPA Period (August 2003 to June 

2004)—Re-initiating the program

The Origin of the PMO • PMO Develops a Program 

Management Plan • PMO Struggles To Execute Its Plan 

• Project Execution Delays: Before the Design-build 

Contractors Arrived • Project Execution Delays: After the 

Arrival of the Design-build Contractors • The End of PMO

7

8

13

48

22
 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

U.S. Mission/Iraqi Government (July 2004 to 

Present)—Executing and Controlling the 

Program

Roles and Responsibilities Shifted and Clarified • The 

Reconstruction Program’s Realignment • Management of 

DFI Funds • Shift in Management Approach for Infrastructure 

Projects • Controlling Progress and Performance of 

Projects: Measuring Performance • Controlling Progress 

and Performance of Projects: Cost Control • Controlling 

Progress and Performance of Projects: Quality Management 

of Construction Projects • Controlling Progress and 

Performance of Projects: Contract Administration and 

Documentation • Controlling Progress and Performance: 

Rewarding Performance • Closing: Capacity Building and 

Transfer to Iraqis • Provincial Reconstruction Teams

endnotes

Forum Participants

82

149

127
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 
 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 

Preface

Iraq Reconstruction: Lessons in Program and Project Management is 

the third and final Report of the Special Inspector General for Iraq 

Reconstruction’s (SIGIR) Lessons Learned Initiative (LLI). Begun in 

September 2004, the LLI focused on three areas of the U.S. relief and 

reconstruction effort in Iraq:

• human capital management

• contracting and procurement

• program and project management

The LLI has sought to capture the key lessons learned from the Iraq 

reconstruction experience and to recommend systemic adjustments 

within the U.S. government aimed at promoting improved capacity 

and preparedness for future post-conflict relief and reconstruction 

operations. 

The first LLI Report, Iraq Reconstruction: Lessons in Human 

Capital Management, was released in early 2006. SIGIR published its 

second Report, Iraq Reconstruction: Lessons in Contracting and Procurement, in August 2006. The collected observations of these two 

Reports amplified the need for targeted reform of U.S. contingency 

relief and reconstruction planning. Significantly, the U.S. government has responded to a number of issues raised in both of these 

Reports.1

For this Report, SIGIR reviewed all relevant documents and conducted extensive interviews with those possessing direct experience 

managing programs and projects in Iraq. On April 12, 2006, SIGIR 

presented the findings of this research to a panel of 27 experts, who 

participated in a day-long conference at the National Defense University in Washington, D.C. The participants, who are listed at the 

end of this Report, examined and discussed SIGIR’s initial findings, 
 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

and the Report’s subsequent direction was shaped largely by their 

collective insight. 

Thousands of talented and dedicated men and women worked 

long hours under challenging and often dangerous circumstances to 

manage and execute the Iraq reconstruction program. They developed, in a very short period of time, a relief and reconstruction 

endeavor of unprecedented complexity and magnitude. The findings in this Report are intended neither to diminish their individual 

efforts nor to question their collective commitment. Rather, SIGIR 

has sought to factually review the evolution of program and project management in Iraq and to derive constructive lessons learned. 

Learning from the Iraq experience will improve the U.S. government’s capacity to execute future relief and reconstruction operations in contingency environments. 

Overview

The operation and management of U.S. relief and reconstruction 

efforts in Iraq was characterized by continual change. Three successive organizations bore responsibility for providing the program 

with strategic oversight and tactical direction: the Office of Reconstruction and Humanitarian Assistance (ORHA), the Coalition 

Provisional Authority (CPA), and the U.S. Mission-Iraq. 

ORHA and CPA—both under the aegis of the Department of 

Defense (DoD)—were dissolved within 14 months of the conclusion of the 2003 invasion of Iraq. The U.S. Mission-Iraq—under the 

Department of State (DoS)—assumed oversight of the program at 

the end of June 2004. Each responsible entity developed successive 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 

reconstruction strategies responsive to the evolving environment it 

faced in Iraq. 

ORHA emphasized planning for what was expected to be a 

relatively short-term relief and reconstruction endeavor, developing 

strategies to ameliorate expected humanitarian crises and potential 

disasters, such as oil-field fires. ORHA’s small reconstruction component intended to restore essential services rapidly back to pre-war 

levels. Its inchoate operations, however, were superseded by the 

advent of CPA in April 2003.

Concurrently, in April 2003, the Congress created the Iraq Relief 

and Reconstruction Fund (IRRF 1), appropriating $2.475 billion, the 

preponderance of which was allocated to the U.S. Agency for International Development (USAID). The scope and amount of IRRF 1 

reflected what many expected the post-invasion situation in Iraq 

to require: rapid relief efforts, minimal reconstruction, and some 

stimulus for basic economic development. Moreover, the Administration expected that Iraqi oil revenue would be a primary source for 

reconstruction funds.

The initial plan anticipated that, within 12 to 18 months, Iraq 

would assume complete sovereignty, including full responsibility for relief and reconstruction efforts.2

 These optimistic projections presumed that Iraq would promptly take on the oversight of 

most programs and projects, except oil restoration, which would 

receive continuing support from the U.S. Army Corps of Engineers 

(USACE) under the Task Force Restore Iraqi Oil (RIO) program.

The events of summer 2003, however, substantially altered the 

U.S. strategy in Iraq, including its approach to relief and reconstruction. The virtual collapse of Iraq’s governing structures, the recognition that Iraq’s infrastructure was severely dilapidated, and the rise 

in insurgent attacks forced ORHA’s successor organization, CPA, 
10 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

to conclude that the relief and reconstruction effort anticipated by 

IRRF 1 would need to be greatly expanded. In addition, the breakdown in Iraq’s oil production and export systems meant that oil 

revenue would not be sufficient to fund the program. 

CPA thus requested a much larger supplemental appropriation 

than the Congress had provided in the IRRF 1. In November 2003, 

the Congress appropriated $18.4 billion for the new program, 

IRRF 2, which, pursuant to CPA’s strategic plan, emphasized largescale infrastructure projects. To oversee this revised and expanded 

program, CPA created a new management entity: the Program Management Office (PMO). By March 2004, 12 major contractors had 

won competitively bid, large contracts to design and build projects 

in six infrastructure sectors. To support PMO’s management of these 

contractors, seven private-sector program management contractors 

were engaged. USACE partnered with PMO in this process, providing construction management and oversight. USAID’s influence 

correspondingly diminished during this period.

On June 28, 2004, the United States transferred sovereignty to the 

Iraqi Interim Government (IIG). The U.S. Mission-Iraq concomitantly took the lead in reconstruction management, and the Iraq 

Reconstruction Management Office (IRMO) was created under DoS 

to assume responsibility for the strategic direction of the reconstruction effort. The change to DoS leadership led to another shift in 

reconstruction emphasis. Capital-intensive infrastructure projects, 

funded by the bulk of the IRRF 2, were given less prominence. And 

the worsening security situation required substantial funding to be 

shifted to support the Iraqi Security Forces. USAID, which had a 

diminished voice during CPA’s tenure, regained prominence. And 

PMO became the Project and Contracting Office (PCO), which 

continued oversight of most construction projects. USACE’s Gulf 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 11

Region Division (GRD) increased its management presence and 

eventually absorbed PCO. 

Key Questions

In this Report, SIGIR explores five key questions about program and 

project management: 

• How did the original reconstruction planning efforts affect the 

ability of managers to oversee the execution of the initial relief 

and reconstruction projects?

• How was CPA’s PMO structured, and what were the advantages 

and disadvantages associated with this model? 

• What were the causes and effects of the reconstruction delays in 

fall 2003 and winter 2004? 

• How did managers meet the challenge of constant change—particularly the reprogramming that occurred during the summer 

and fall of 2004?

• What were the key execution issues relating to managing subcontractors and Iraqi firms, cost controls for U.S. and non-U.S. 

funds, and implementing performance metrics and capacitydevelopment initiatives? 

This Report is organized into three sections:

Pre-ORHA through Early CPA (Fall 2002 to August 2003)—

Initiating the Program: Section one provides an overview of the 

planning environment, which had a direct effect on the capacity of 

program managers to execute and control reconstruction projects. 

The Later CPA Period (August 2003 to June 2004)—

Re-initiating the Program: Section two analyzes PMO and the 

delays in executing reconstruction projects during this period. 
12 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

U.S. Mission/Iraqi Government (July 2004 to Present)—

Executing and Controlling the Program: Section three focuses on 

the three program realignments and their effect on the execution of 

the reconstruction program. This section also discusses the management of reconstruction projects, including performance management, cost and quality control, and capacity development. 

A Note on Scope and Methodology

To define program and project management, this Report uses the 

Project Management Institute’s (PMI) definition of these terms:

• A project is a “temporary endeavor undertaken to create a unique 

product of service.”

• A program is a “group of related projects managed in a coordinated way.” 

This Report also uses PMI’s five phases of program and 

project management: initiating, planning, executing, controlling, 

and closing. Within these phases, key components of project management—including scope, time, cost, quality, people, communication, and risk—are discussed.3

 

The development of contracting plans and the solicitation of 

contract awards are explained in Iraq Reconstruction: Lessons in 

Contracting and Procurement. Workforce planning, recruitment, 

and continuity of staff are discussed in SIGIR’s first Lessons Learned 

Report, Iraq Reconstruction: Lessons in Human Capital Management.

This Report describes the management and execution of IRRF, 

seized, vested, and DFI funds. It does not directly discuss the management of other funding streams, including the Economic Support 

Fund and the Iraq Security Forces Fund.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 13

recommendations
14 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

recommendations

Program management in Iraq grew increasingly complex from 2003 

to 2007, ultimately involving hundreds of contractors and thousands 

of projects. The reconstruction effort required, but did not initially 

receive, consistent and effective oversight. U.S. policymakers repeatedly shifted strategy in response to the constantly changing circumstances in Iraq. These policy shifts, including leadership changes, 

meant that program managers not only dealt with long periods of 

uncertainty, but also had to adjust to new systems, procedures, and 

reporting requirements. This compounded the difficulty of delivering projects on time, within scope and budget. 

Over the past four years, DoD, DoS, and USAID have adapted to 

relentless and challenging demands with commitment and agility, internalizing and drawing on important lessons learned in the 

course of their work. SIGIR offers these recommendations, based 

on these lessons learned, to both help the ongoing Iraq relief and 

reconstruction program and to promote systemic adjustment 

through legislative and regulatory reform. Such reforms are essential 

to preparing the United States for future post-conflict contingency 

relief and reconstruction operations.

1. The Congress should consider a “Goldwater Nichols”-like reform 

measure to promote better integration among DoD, USAID, and 

DoS, particularly with respect to post-conflict contingency 

operations.

In 1986, the Goldwater-Nichols Act initiated a fundamental reorganization of the Department of Defense. As a result of this Act, U.S. 

forces increased cooperation and integration. It was not an easy process, but over the past twenty years, the United States has benefited 

greatly from the improved coordination among the military services.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 15

The Iraq experience illustrates the need to expand cooperation 

and integration across U.S. agencies, but most especially among 

DoD, DoS, and USAID. Unlike other agencies, these three have 

missions that require them to operate primarily outside the United 

States and engage constantly with other governments and international entities. 

Steps have already been taken to move this integration forward. 

National Security Presidential Directive 44 and DoD Directive 

3000.05 both encourage interagency cooperation. USAID has created an office of military affairs to serve as a liaison to DoD. DoS, in 

response to NSPD-44, established the Office of the Coordinator for 

Reconstruction and Stabilization. USAID and DoS staff regularly 

attend military training exercises to share lessons learned and to 

brief military personnel on their responsibilities and capabilities. 

DoD’s Joint Concept Development and Experimentation Office is 

currently looking at ways to improve civilian/military planning. 

These steps, although important, are just a beginning. The experience of the Goldwater-Nichols Act suggests that the Congress should 

consider new legislation that could advance further cooperation 

among DoD, DoS, and USAID on post-conflict contingency reconstruction and relief planning and execution.

2. The Congress should adequately fund the Department of State’s 

Office of the Coordinator for Reconstruction and Stabilization. 

The Office of the Coordinator for Reconstruction and Stabilization 

(S/CRS) was created by the President in response to the need for 

better post-conflict contingency coordination among U.S. departments. S/CRS completed a post-conflict implementation plan in 

October 2006. This plan identifies short-, medium-, and long-term 

tasks that the U.S. government should execute to improve planning, 
16 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

preparation, and execution of post-conflict contingency operations. 

The plan commendably seeks to address many of the lessons learned 

from Iraq that SIGIR and others have identified. Most important, it 

aims at institutionalizing ongoing interagency contingency exercises 

and developing a civilian reserve corps. A lack of funding and weak 

recognition of S/CRS by some agencies have prevented the plan 

from being fully realized. The Congress should provide S/CRS with 

the funding and authority to fulfill its mission.

3. The U.S. government should clarify the authorities of the multiple agencies involved in post-conflict operations to avoid ambiguity 

over who is in charge.

Although no single U.S. agency demonstrated the capacity to manage the large and complex Iraq program alone, the resultant and 

unavoidably ad hoc response that sometimes ensued was less than 

optimal. Developing ad hoc organizations in theater, such as the 

PMO and IRMO, consumed significant U.S. resources and time. 

Moreover, these new offices did not have the appropriate staff, 

procedures, systems, or institutional strength to direct effectively the 

complex interagency rebuilding effort. 

S/CRS should be fully empowered to take up its presidentially 

mandated responsibility for coordinating the planning for future 

contingency relief and reconstruction operations. Additionally, 

S/CRS should be provided legal authority, working within the interagency structure and guidelines, to decide who should be in charge 

of what in any post-conflict reconstruction operation. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 17

4. Existing agencies should institutionalize the most effective 

project management systems, procedures, policies, and initiatives 

developed during the Iraq reconstruction effort.

Because U.S. government agencies did not have appropriate systems 

in place to properly manage a program of the magnitude and complexity of the IRRF, they often created new systems and procedures. 

Over time, many of these procedures became effective in practice. 

USAID, DoS, and DoD, should identify and institutionally incorporate the best practices from the Iraq experience. 

5. Program managers should integrate local populations and 

practices at every level of the planning and execution process.

In planning for future contingency operations, the U.S. government 

should involve, from the outset, a broad spectrum of individuals 

with familiarity about the affected nation (from policy makers to 

contractors to international experts). In Iraq, successful reconstruction managers took the time to understand local customs and 

practices. 

Project design and execution should incorporate local contractors 

and vendors. Also, planning for projects should consider local and 

regional quality standards, rather than trying to impose U.S. standards, which too often caused increased cost and delayed execution 

in Iraq. 

6. Funding designated for post-conflict contingency programs 

should support flexible programs and projects that yield both 

short- and long-term benefits. 

Consideration should be given to developing multi-year programs 

with properly-sequenced reconstruction projects. Both short- and 

long-term relief and reconstruction programs can be better planned 
18 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

and implemented through a multi-year financing strategy 

rather than through unscheduled supplemental appropriations. 

Contingency funding should also be made available for essential 

but unforeseen programs and projects. In Iraq, adequate reserves 

were not set aside to fund unanticipated projects, and the frequent 

reprogramming of funds adversely affected outcomes in several 

infrastructure sectors.

7. Develop policies and procedures to manage non-U.S. 

appropriated funds.

The United States deployed to Iraq without standardized policies and 

procedures to manage non-U.S. appropriated funds (e.g., the Development Fund for Iraq). Policies and systems were thus developed 

reactively and not implemented consistently. As a result, there were 

questions about the accountability of non-U.S. funds. As oversight 

entities pursue allegations of waste, fraud, and abuse, jurisdictional 

questions continue to surface. Before contingency operations begin, 

planners should develop clear policies regarding the management of 

non-U.S. funds.

8. Develop comprehensive planning for capacity development.

Before approving reconstruction funds, the Congress should require 

agencies to present a capacity-development strategy that will enable 

the effective transfer of operational responsibility for reconstruction 

projects to the host country.

In Iraq, capacity-development programs were not adequately 

integrated into the overall effort. Projects should include an organizational and management component as well as training in operations and maintenance. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 19

9. Future post-conflict contingency planning should provide for 

well-resourced and uninterrupted oversight of relief and reconstruction programs to ensure effective monitoring from the outset 

and permit real-time adjustments. 

An effective monitoring and oversight plan needs to be in place 

within each agency from the outset of contingency operations. 

This will allow for early and direct feedback to program managers, 

who can implement course corrections in operating practices and 

policies. Early and effective oversight will also deter fraud, waste, 

and abuse. For construction projects, there should be consistent 

oversight, including appropriate quality assurance and quality control programs. In Iraq, successful projects were usually those that 

received good quality assurance and effective quality control. 

Operations that involve multiple agencies, funding streams, 

and management systems require that the Congress take steps to 

standardize oversight and provide clear guidance on any reporting 

requirements involving multiple agencies.
20 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

IRAQ RECONSTRUCTIONProgram and Project Management Timeline

Up to $180M 

in IRRF 2 funding 

allocated for 

CERP

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

CERPcreated via FRAGO 89

IRRF 1

IRRF 2

DFI

100% of IRRF 2 obligated74% of IRRF 2 expended

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

DFI created under UN Resolution 1483

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

IRRF 1 establishedunder P.L. 108-11 $2.475B

IRRF 2established underP.L. 108-106 $18.4B

Major reprogramming of IRRF 2

Major reprogrammingof IRRF 2

11/6/03 9/2004

5/22/03 6/28/04

4/16/03

2 0 0 7

3/2005

6/19/03 11/6/03 5/11/05 7/2004

Apr Jul Jan Oct

1/5/04

Funding StreamsMajor Program and Project Management Events

1/2006

12/2005 12/2006

Management of DFI funds transferredto Iraqis. U.S. continues to administeroutstanding DFI contracts

CPA presented rst 2207 spend plan to the Congress for IRRF 2

Limited use of DoD O&Mfunds for CERP approved

CERP, CHRRP

PRE-WAR, ORHA, AND EARLY CPA C PA IRMO/U.S. Mission

83% of projects complete

92% of projects complete 79% of IRRF 2 expended

Up to $718M allocated for CERP

Major reprogrammingof IRRF 2

12/2004 9/2006

C PA IRMO/U.S. Mission

PRE-WAR, ORHA, AND EARLY CPA

IRAQ RECONSTRUCTIONProgram and Project Management Timeline

U

t

$180M 

CHRRP 

i

d $86M f

CERP

IRRF 1

IRRF 2

DFI

100% of IRRF 2 obligated74% of IRRF 2 expended

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

DFI created under UN Resolution 1483

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

IRRF 1 establishedunder P.L. 108-11 $2.475B

IRRF 2established underP.L. 108-106 $18.4B

Major reprogramming of IRRF 2

Major reprogrammingof IRRF 2

11/6/03 9/2004

5/22/03 6/28/04

4/16/03

2 0 0 7

3/2005

6/19/03 11/6/03 5/11/05 7/2004

Apr Jul Jan Oct

1/5/04

Funding Streams

1/2006

12/2005 12/2006

Management of DFI funds transferredto Iraqis. U.S. continues to administeroutstanding DFI contracts

CPA presented rst 2207 spend plan to the Congress for IRRF 2

Limited 

se of DoD O&M

CERP, CHRRP

PRE-WAR, ORHA, AND EARLY CPA C PA IRMO/U.S. Mission

83% of projects complete

92% of projects complete 79% of IRRF 2 expended

$

Major reprogrammingof IRRF 2

12/2004 9/2006
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 21

2/2003USACE named Executive Agent for Oil Restoration

Fall 2002 Planning began

1/14/04Army tasked to provide acquisition and program management support to CPA

1/25/04USACE-GRD activated

5/11/04NSPD-36 created PCO and IRMO

6/28/04PCO stood up

11/12/04CFC FRAGO 09-668 started operation of JCC-I

JCC-I

6/18/03

8/2003CPA created PMO

PRB established

3/2004PMO released Project Management Plan;Design-build contracts issued

2–6/2003DCC-W & DCMA provided contracting assistance to ORHA/CPA

USAID

7/27/03USAID opened Baghdad oce

1/2003USAID started contracting for reconstruction and humanitarian needs

3/2005PCO Cost Management Plan approved

PMO 

PCO 

12/4/05PCO merged with GRD

GRD-PCO 

10/14/06PCO (Iraq) terminated

GRD

C PA IRMO/U.S. Mission

10/2005PRTs established

PRE

WAR, ORHA, AND EARLY CPA

USACE

3/2004USAID initiated third O&M job order

3/2006USAID released Transition Strategy Plan

10/2006Bechtel completed second infrastructure contract

7/21/05GRD and JCC-I signed MOU

Up to $180M 

in IRRF 2 funding 

allocated for 

CERP

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

CERPcreated via FRAGO 89

2/2003USACE named Executive Agent for Oil Restoration

Fall 2002 Planning began

1/14/04Army tasked to provide acquisition and program management support to CPA

1/25/04USACE-GRD activated

5/11/04NSPD-36 created PCO and IRMO

6/28/04PCO stood up

11/12/04CFC FRAGO 09-668 started operation of JCC-I

JCC-I

6/18/03

8/2003CPA created PMO

Major Program and Project Management Events

PRB established

3/2004PMO released Project Management Plan;Design-build contracts issued

2–6/2003DCC-W & DCMA provided contracting assistance to ORHA/CPA

USAID

7/27/03USAID opened Baghdad oce

1/2003USAID started contracting for reconstruction and humanitarian needs

3/2005PCO Cost Management Plan approved

Limited use of DoD O&Mfunds for CERP approved

Up to $718M allocated for CERP

PMO 

PCO 

12/4/05PCO merged with GRD

GRD-PCO 

10/14/06PCO (Iraq) terminated

GRD

C PA IRMO/U.S. Mission

10/2005PRTs established

PRE-WAR, ORHA, AND EARLY CPA

USACE

3/2004USAID initiated third O&M job order

3/2006USAID released Transition Strategy Plan

10/2006Bechtel completed second infrastructure contract

7/21/05GRD and JCC-I signed MOU
22 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Pre-ORHA through Early CPA (Fall 2002 to 

August 2003)—Initiating the Program

Before military operations began in March 2003, several reconstruction plans were in place. Federal agencies had developed these various plans in classified environments to prevent speculation about 

war plans. As a result, they often worked independently from each 

other.4

Some assumptions upon which these plans were based later 

proved inaccurate, and the plans were never fully integrated into a 

single operational strategy. This lack of coordination subsequently 

affected the capacity of program managers to execute projects in 

Iraq.5

Initial Planning for Relief and Reconstruction 

Iraq reconstruction planning began during the fall of 2002.6 The 

National Security Council (NSC) Deputies Committee and the 

Office of Management and Budget (OMB) sponsored interagency 

working groups to prepare post-war plans. DoD created Joint Task 

Force IV7 to coordinate post-war plans, and other U.S. agencies, 

including USAID, developed internal planning groups.

In January 2003, just two months before the start of the March 

2003 invasion, ORHA was established as a temporary organization 

under DoD to coalesce the existing plans for humanitarian assistance and reconstruction. The establishment of ORHA, and the shift 

from an NSC to a DoD-led effort, was the first major evolution in 

the reconstruction program. ORHA was established partly because 

it became clear that there was a need for an operational entity on the 

ground in Iraq to play a primary coordinating role.8 But it proved 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 23

more challenging than expected to integrate the “disparate team of 

government agencies”9 involved under a newly created and poorly 

resourced lead organization. 

ORHA comprised individuals from a variety of agencies10 and 

backgrounds, with responsibilities divided into three pillars: 

• humanitarian assistance

• civil administration 

• reconstruction

Several assumptions influenced planning across each of ORHA’s 

three pillars. The expectation that a significant humanitarian crisis 

would occur meant that assistance resources were focused on 

providing refugees with water, food, and medicine. Reconstruction 

funding was limited and was designed to target critical infrastructure11

 in order to bring Iraq’s essential services back to pre-war 

levels. Iraq was expected to rapidly assume the financial burden for 

much of the reconstruction program with funding from oil 

revenues.12

Reconstruction planners assumed that events in Iraq would 

follow a fairly linear progression from war to recovery to stability. 

Humanitarian relief would supplant martial activity, and stabilization would permit rapid reconstruction.13 In February 2003, an 

interagency exercise, held in Washington, D.C., anticipated that a 

lack of security could cause looting, but no specific strategy to prepare for this contingency was developed.14 Stability was expected to 

be achieved relatively soon after hostilities ceased.

The plans were never fully integrated

into a single operational strategy. This 

lack of coordination subsequently 

affected the capacity of program 

managers to execute projects in Iraq.
24 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

I think our assumption [was that we would] have a certain degree of 

stability. The Iraqis are going to go back to work, the ministries aren’t 

going to be looted. You’re essentially going to have a functioning 

state, but unlike Bosnia, our assumption was this is an oil-rich state. 

So, within a year or maybe 18 months...there will be oil revenues 

flowing...

[We planned] out a series of discrete interventions...that [would] 

keep the place from falling apart and do the absolutely critical things 

that need[ed] to be done to pull Iraq back together...[until the] oil 

revenues [would come] pouring into the country.... Planning was 

done on operating assumptions that [were] so radically different 

from what ultimately evolved...15

The key assumptions regarding the anticipated post-conflict 

environment in Iraq—that stabilization would be quickly achieved; 

that Iraq’s governing institutions would resume operations; and that 

oil revenues would provide reconstruction funds—drove the plans 

developed by each of ORHA’s three pillars. 

Humanitarian Assistance Pillar

DoS and USAID partnered to develop ORHA’s humanitarian 

assistance pillar, which focused on preparing for the anticipated 

humanitarian crisis. The DoS Bureau of Population, Refugees, and 

Migration joined with USAID’s Office of Foreign Disaster Assistance (OFDA), to develop an assistance program aimed at providing immediate relief—including food, water, shelter, and medical 

care—to displaced Iraqis. 

USAID’s Disaster Assistance Response Team (DART), managed 

by OFDA, deployed to the Gulf Region and prepared to move into 

Iraq to meet the immediate needs of internally displaced persons.16

Before deployment, the DART team had participated in exten-
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 25

sive preparatory exercises, including disaster assistance training,17

instruction on Iraqi culture, and safety procedures. DART spent 

approximately $1 million on these preparations.18 USAID’s Office of 

Transition Initiatives (OTI)—an office that provides “fast, flexible 

short-term assistance targeted at key political transition and stabilization needs”19—partnered with DART in these efforts. 

By the time hostilities began in March 2003, the humanitarian 

pillar’s staff20 was in place in the Gulf Region, contingency funding 

was available,21 and contractors and non-governmental organizations (NGOs) were engaged. Importantly, by February 2003, the 

DoS/USAID interagency effort accomplished several important 

staging milestones:

• pre-positioned supplies throughout the region, totaling 

$26.5 million22

• fielded a 65-person team

• established a 24-hour support office

• secured contingency support funding through USAID

• identified and funded contractors and grantees

Civil Administration Pillar

The strategy for the civil administration pillar was intended to 

rapidly re-establish Iraqi governmental functions after hostilities 

ceased. This approach called for Coalition senior advisors to help 

Iraqi civil servants continue to operate Iraqi ministries,23 thereby 

maintaining the delivery of critical services, particularly water and 

electricity.

Unlike the humanitarian assistance pillar, the civil administration 

pillar, which operated under the aegis of DoD, accomplished little 

preparation before deploying to Iraq. The civil administration team 

was not sufficiently staffed, adequate funding had not been secured, 
26 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

and contractors required to supplement the staff had not been 

identified. 

There was no pre-planning done to address the civil administration 

needs. There was an assumption that Iraqis who normally took care 

of such things would continue to do so. When they didn’t, there was 

no plan in place on how to make these civil administration tasks 

happen.24

DoD deployed without adequate funding mechanisms, contracting support,25 or contract administrators to assist the senior advisors’ 

activities with Iraqi ministries.26 Although logistics and basic service 

support was to be provided through the Army’s Logistics Civilian 

Augmentation Program (LOGCAP) contract,27 the means for 

providing adequate funding to support senior advisors’ activities 

with Iraqi ministries were not established in advance. 

ORHA’s Comptroller and his limited team were prepared to manage the operating budget of ORHA28 but not to support reconstruction projects. The Principal Deputy Under Secretary of Defense, 

Acquisition, Technology, and Logistics requested that the Defense 

Contract Management Agency (DCMA) provide contracting support for ORHA, but specifically stated that DCMA’s support would 

not include reconstruction and humanitarian efforts.29 Only after 

arriving in Kuwait—and in response to increasing requests made 

once operations were established in Iraq—did the ORHA 

DoD deployed without adequate 

funding mechanisms, contracting support, 

or contract administrators to assist 

the senior advisors’ activities

with Iraqi ministries.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 27

Comptroller’s team expand its mandate and establish procedures to 

support reconstruction activities.30

Reconstruction Pillar

In the fall of 2002, before the creation of ORHA, the NSC and OMB 

sponsored initial planning for the reconstruction program. U.S. 

agencies involved included DoD, DoS, USAID, the Department of 

the Treasury (Treasury), and the Department of Justice. With the 

creation of ORHA, these interagency working groups became less 

active,31 and ORHA designated USAID to lead the reconstruction 

pillar, thereby activating many of the plans that USAID had already 

been developing. 

Agency Relief and Reconstruction Plans 

USAID developed relief and reconstruction plans for ten sectors: 

health, education, water and sanitation, electricity, shelter,32 transportation, governance and rule of law, agriculture and rural development, telecommunications, and economic and fiscal policy.33 These 

plans included “benchmarks to be achieved within one month, six 

months, and one year.”34 Activities targeted critical program interventions35 to bring Iraqi essential services back to pre-war levels.

During the fall of 2002, USACE concomitantly evaluated possible 

post-conflict damage scenarios for Iraq and developed a cost estimate for the reconstruction of Iraq’s infrastructure. The team estimated that the reconstruction effort would require $35 billion, based 

on a moderate damage scenario. USACE had not been specifically 

tasked to do this, and it is unclear whether this estimate was ever 

disseminated to inform others engaged in post-conflict planning.36
28 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

In March 2003, the Department of the Treasury created the Iraq 

Financial Task Force (IFTF) to “coordinate the planning and execution of Treasury’s role in post-war stabilization, administration, and 

reconstruction of Iraq.”37 Specific efforts included planning for a new 

Iraqi currency. Treasury also provided technical advisors to assist the 

Iraqi Ministry of Finance and the Central Bank of Iraq.

USAID concurrently began issuing contracts to support the 

planned relief and reconstruction effort, with most contracts issued 

during the spring of 2003.38 These contracts were eventually funded 

by IRRF 1, which the Congress approved in April 2003. The scopes 

of work for these contracts were based on easily accessible information about the country and region, which often proved to be inconsistent and/or misleading. For example, although program managers 

were able to develop fairly detailed plans for the rehabilitation of 

the Port of Umm Qasr (because of sound intelligence information), 

there was limited data available on the condition of Iraq’s water 

sector, and thus the scopes of work for projects in this sector were 

correspondingly inadequate.39

USAID deployed with approximately 27 personnel, including sector managers, contracting experts, financial officers, logistical teams, 

and inspector general personnel. USAID also hired a contractor to 

provide additional program management and logistical support, 

developing a “Mission-in-a-Box”—the people and systems needed to 

manage the anticipated effort in Iraq.40

USAID headquarters established an Iraq reconstruction office in 

Washington, D.C., comprising USAID personnel and contractors. 

This office acted as a liaison, providing reach-back and technical 

advice to USAID/Iraq. USAID also prepared to establish a relatively 

large infrastructure office in Iraq to manage USAID’s largest contract—a $1.03 billion infrastructure project awarded to the Bechtel 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 29

Corporation in April 2003. USAID’s Iraq infrastructure office was 

staffed by approximately 24 USAID and contract personnel. 

In late February 2003, the Department of the Army tasked 

USACE to repair the expected damage to Iraq’s oil infrastructure 

and to restore Iraqi oil and gas production capacity to pre-war 

levels.41 USACE’s Southwest Division was given the mission, and 

Task Force Restore Iraqi Oil (RIO) was formed to execute the 

program. To support the RIO effort, USACE entered into a contract 

with KBR42 and mobilized more than 100 USACE personnel, including project managers for oil production, refined products, communications, and security.43

USACE expressed interest in becoming more involved in international reconstruction efforts.44 Some believed that USACE was better 

suited—given its experience and mission—to oversee construction 

projects than USAID. This created some tension45 between the two 

agencies; but ultimately, in May 2003, the decision was made to have 

USAID and USACE enter into an interagency agreement that tasked 

USACE personnel to provide construction management and quality 

assurance support for USAID’s infrastructure projects. Specifically, 

USACE was to help “ensure that the reconstruction contractor’s 

work [was] completed in accordance with the job order, international standards, environmental requirements, and in compliance with 

U.S. government policies.”46

In addition to forming Task Force RIO and partnering with 

USAID, USACE planned to deploy up to ten Forward Engineering 

Support Teams (FESTs) to the region to support engineering needs 

in Iraq. These teams of five to ten military and civilian personnel 

were intended to augment an operational military unit’s existing 

engineering capability. Their primary responsibility was to conduct 
30 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

assessments of infrastructure needs encountered by the operational 

units.47 The teams employed “tele-engineering” to access support 

offered in the United States by a mix of military and civilian staff at 

the Engineer Infrastructure and Intelligence Reachback Center.48

In addition to its infrastructure reconstruction projects, USACE 

provided senior advisors to specific ministries such as irrigation, 

electricity, housing and construction, transportation and communications, and health.49

Funding and the Original Reconstruction 

Goals and Expectations 

In April 2003, the Congress appropriated $2.475 billion to IRRF 1 

under Public Law (P.L.) 108-11. The Congress designed the law to be 

flexible and to allow the transfer of funds across sectors (subject to 

notification). It also permitted reimbursement to agencies that 

had expended their own funds on reconstruction planning and 

activities.50

USAID’s “Vision for Iraq” plan supported much of the initial 

request for reconstruction funding under IRRF 1. NSC and OMB 

approved the plan in February 2003,51 which included milestones 

and goals for key sectors and established a timeframe for completing projects. Many of the goals defined by USAID sought to achieve 

quick results and reflected specific targets provided by the NSC or 

created by USAID in response to directives from the NSC.52 USAID 

included several of the same outcomes outlined in the document in 

the scopes of work for its initial reconstruction contracts. However, 

the plan did not clearly define what it meant to restore Iraq’s infrastructure to “pre-war levels.”53 Thus, reconstruction plans and programs were not consistently gauged to a specific goal.54 This was in 

part because there was difficulty getting accurate information about 

the state of Iraq’s infrastructure.55
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 31

The feasibility of achieving the initial reconstruction milestones 

was questioned at the time. From the outset, “there was a gap 

between goals and available funding—$680 million [the amount 

originally allotted for USAID infrastructure reconstruction efforts] 

was nowhere near the amount needed to attain the goals.”56 One of 

USAID’s critical goals was to help the Iraqi ministries become operational as quickly as possible,57 but one USAID contractor questioned 

how to accomplish capacity building in ministries that, for all practical purposes, had ceased to operate.58 

Table 1 illustrates the goals for selected components of the original reconstruction program as outlined in the USAID “Vision for 

Iraq,” USAID contracts, and the CPA strategic plan, which was 

created in July 2003. Reported program results are also included.59
32 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Early Reconstruction Goals and Eventual Program Results

USAID Vision 

Document 

(Feb. 2003)

USAID Contracts 

(FY 2003)

CPA Strategic Plan

(Summer 2003) Results

Schools Within six months, 

3,000 schools [will 

be] repaired or 

rehabilitated.a

Within six months 

the contractor 

will repair or 

rehabilitate up 

to 3,000 school 

buildings.b

By October 2003, 

rehabilitate 1,000 

priority schools.c

Since 2003, approximately 

3,000 schools had been 

rehabilitated, in full or in 

part.d

(In addition, GRD-PCO 

completed 807 schools and 

MNF-I completed 1,365.e)

Health Care Basic health services 

will be available 

to a targeted 50% 

of the population, 

and maternal/child 

health to 100% of 

the population, in 

secure areas, within 

six months.f

Basic health care 

available to 12.5 

million persons.g

By October 2003, 

restore basic health 

care services to 

95-100% of 

pre-war levels.h

USAID does not report 

results relating directly 

to percentage of 

population served. Rather, 

it posts several specific 

accomplishments relating to 

health services, including: 

• immunizing more than 

three million children 

under five

• vaccinating more than 

700,000 pregnant women 

against tetanus

• re-equipping more than 

600 health clinics with 

essential equipment and 

suppliesi

Electricity Within one year: 

Generation of 6,750 

MW achieved.j

Within 12 months 

generating 

capacity will be 

restored to 75% 

of the pre-1991 

level of 9,000 

MW (or 6,750 

MW.k)

(Note: Pre-war 

capacity has been 

estimated at 

4,500 MW.l)

By October 2003, 

improve generating 

capacity to 4,000 

MW.m By January 

2004, improve 

generating capacity 

to 5,000 MW.n By 

2005, improve 

generating capacity 

to 7,000 MW.o

The December 2006 quarterly 

average was 4,260 MW.p

Table 1
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 33

a USAID document, “USAID’s Vision for Post-Conflict Iraq,” February 2003 (online at: 

http://pdf.dec.org/pdf_docs/PDABY341.pdf, accessed May 12, 2006).

b USAID document, “Iraq Infrastructure Reconstruction Statement of Work,” April 17, 2003 

(online at: http://www.usaid.gov/iraq/contracts/pdf/BechtelSecC.pdf, accessed May 

12, 2006), p. 14.

c CPA document, “CPA Strategic Plan,” July 2003.

d USAID website, “USAID Assistance for Iraq: Education” (online at: http://www.usaid.

gov/iraq/accomplishments/education.html, accessed January 5, 2007).

e SIGIR Report, “SIGIR Quarterly Report and Semiannual Report to the United States 

Congress,” January 2007, p. 69.

f USAID document, “USAID’s Vision for Post-Conflict Iraq,” February 2003 (online at: 

http://pdf.dec.org/pdf_docs/PDABY341.pdf, accessed May 12, 2006).

g USAID document, “Health System Strengthening in a Post-Conflict Iraq Statement of 

Work,” April 30, 2003 (online at: http://www.usaid.gov/iraq/contracts/pdf/ABTSecC.

pdf, accessed May 12, 2006), p. 10.

h CPA document, “CPA Strategic Plan,” July 2003.

i USAID website, “USAID Assistance for Iraq: Health” (online at: http://www.usaid.gov/

iraq/accomplishments/health.html, accessed May 12, 2006).

j USAID document, “USAID’s Vision for Post-Conflict Iraq,” February 2003 (online at: 

http://pdf.dec.org/pdf_docs/PDABY341.pdf, accessed May 12, 2006).

k USAID document, “Iraq Infrastructure Reconstruction Statement of Work,” April 17, 2003 

(online at: http://www.usaid.gov/iraq/contracts/pdf/BechtelSecC.pdf, accessed May 

12, 2006), p. 12.

l SIGIR Report, “SIGIR Quarterly Report to the United States Congress,” April 2006, p. 57.

m CPA document, “CPA Strategic Plan,” July 2003.

n CPA document, “CPA Strategic Plan,” July 2003.

o CPA document, “CPA Strategic Plan,” July 2003.

p SIGIR Report, “SIGIR Quarterly Report and Semiannual Report to the United States 

Congress,” January 2007, p. 25.
34 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Insufficient Capacity To Meet Immediate Needs

In March 2003, ORHA personnel began deploying to Kuwait. In 

April 2003, members of ORHA’s humanitarian assistance, civil 

administration, and reconstruction pillars all moved into Iraq, 

where ORHA took the lead in U.S. relief and reconstruction efforts. 

However, ORHA was never able to develop a fully coordinated plan. 

In the absence of an integrated strategy, each participating entity 

deployed to Iraq with divergent understandings and assumptions 

about the goal of the reconstruction effort, its proposed length and 

scale, and the responsibilities and functions assigned to each agency. 

This led to confusion and duplication of effort. 

One former ORHA official stated: “We were bumping into one 

another as we tried to solve the same problem.”60 Another reported 

that he did not know USAID’s role and had never heard of DART or 

OTI until he arrived in Kuwait in March 2003.61

Initially we were told repetitively to stay in [our] lane and the lanes 

turned out to be, I think, more like stovepipes. So very few of 

us really had any idea what others’ capabilities were, what their 

mandate was. There was a lot of confusion that probably could have 

been avoided had there been much more consultation from the 

beginning.62

Existing strategic plans failed to reach some military units. For 

example, in April 2003, the 101st Airborne Division “began to be 

concerned with reconstruction, stability and ops, and [it] basically 

generated [its] own plan, based on the conditions there, in total segregation from whatever plans may have existed within ORHA and 

within the Corps of Engineers.”63

We were bumping into one another

as we tried to solve the same problem.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 35

The experience of a USACE FEST member based in northern Iraq illustrates the confusion that plagued the initial phase of 

reconstruction operations. As FEST teams completed assessments of 

infrastructure needs throughout the country, the information they 

acquired was sent to Baghdad, where needs were prioritized and 

then provided to various entities for execution. However, information was not clearly communicated, which created duplication of 

effort. In one instance, a local contractor hired by a FEST team to 

renovate a building found that a military unit was already doing the 

work.64

Once in Iraq, it quickly became clear that the anticipated humanitarian crisis had not materialized. There were not large numbers of 

refugees, nor had there been a general breakdown in the food distribution system. There was, however, an acute need to restore basic 

services—e.g., trash collection, sewage line repair, and electrical 

power. ORHA had neither the capacity nor the organization to carry 

out these tasks, so other agencies expanded their mandates to begin 

to meet these urgent needs.65

USAID’s OTI was a bright spot during the initial chaos, agilely 

responding to the needs it confronted. One CPA official noted that 

the OTI program succeeded because it had money and was “the easiest to access and the most useful.”66 An OTI staff member explained 

the early activities of the organization: 

I was astounded to find that OTI was practically the only organization in [Baghdad] that had any money in hand and had an ability to 

implement right at the beginning.67 We were there essentially to try 

to respond to events as they unfolded, and so initially, it was to try 

to employ as many people as possible, and secondly, to try to demonstrate that there was some things happening that were positive to 

the Iraqi people, and that’s essentially what our mission was.68
36 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

One of OTI’s initial tasks was to assist various ministry staff 

resume operations by replacing essential equipment that had been 

looted. Through grants, OTI provided desks, chairs, computers, and 

basic office supplies purchased from the local market.69 This initiative, “Ministry-in-a-Box,” helped more than 30 Iraqi ministries 

recover from the massive looting that had ransacked virtually every 

government facility in Baghdad.70

When the expected humanitarian crisis did not materialize, 

DART and its implementing partners became an underutilized asset, 

even though DART possessed the organic capacity to fund grants 

and write contracts for urgent relief and reconstruction needs, a 

function that ORHA’s civil administration pillar lacked. However, 

DART’s leadership was reluctant to authorize DART teams to operate in the insecure environment that constituted post-conflict Iraq.71

The degree to which civilians would be expected to work in hostile environments had not been adequately examined before the start 

of operations. This was a concern for DART and USACE’s forward 

engineer teams, which included both military and civilian personnel.72 Differing expectations among these organizations contributed 

to administrative logjams that delayed project execution because 

available capacity was not used to meet urgent needs.

ORHA Shifts to CPA

Soon after ORHA mobilized into Iraq, CPA was created, supplanting 

ORHA as the entity responsible for governing Iraq and overseeing 

the reconstruction effort. The first official recognition of CPA 

The degree to which civilians would 

be expected to work in hostile

environments had not been adequately 

examined before the start of operations.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 37

appeared in a U.S. Central Command (CENTCOM) order that 

Commanding General Tommy Franks issued on April 16, 2003. On 

May 9, 2003, the President appointed Ambassador L. Paul Bremer III 

as his envoy to Iraq, giving him specific direction:73

All USG elements in Iraq, other than those under the command of 

the Commander, U.S. Central Command, will keep you fully informed, 

at all times, of their current and planned activities.74

On May 13, 2003, the Secretary of Defense designated Ambassador Bremer as the CPA’s Administrator, providing that, as Administrator, he would be responsible for “the temporary governance of 

Iraq, and...oversee, direct, and coordinate all executive, legislative, 

and judicial functions necessary to carry out this responsibility, 

including humanitarian relief and reconstruction and assisting in the 

formation of an Iraqi interim authority.”75

CPA quickly absorbed the resources and operations of ORHA. On 

June 16, 2003, the Deputy Secretary of Defense stated that “ORHA 

is dissolved and its functions, responsibilities, and legal obligations 

[are] assumed by the CPA.”76 The memo also stated that the Secretary of the Army, who became the executive agent (responsible for 

providing administrative, logistics, and contracting support) for 

ORHA on May 21, 2003, would now be the executive agent for CPA. 

This rapid organizational evolution produced several significant 

challenges for those managing initial reconstruction projects and 

funds, including: unclear understanding of various agency capabilities; insufficient capacity to meet immediate needs; inadequate 

policies, procedures, and systems; shifting strategies and funding 

uncertainties; weak communication systems and large information 

demands; and lack of expertise in program management.
38 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Management of Vested Iraqi Funds

On March 20, 2003, the President signed Executive Order 13290, 

which provided that vested funds—Iraqi funds frozen in U.S. 

banks—would be transferred to the U.S. Department of the Treasury, and “should be used to assist the Iraqi people and to assist in 

the reconstruction of Iraq.”77 Under this authority, the ORHA Comptroller began using these funds to initiate reconstruction projects 

approved by Iraqi ministries. An interagency group determined that 

vested funds needed to be treated like U.S.-appropriated dollars.78

Management of Payments to Iraqi Civil Servants 

Using Vested Funds

Treasury was aware of the logistical and procedural challenges associated with paying nearly two million Iraqi civil servants: there was 

no functioning banking system and no easy way of identifying valid 

employees. Neither ORHA nor CPA was equipped with the necessary resources to accomplish this task. 

While in Kuwait, Treasury officials turned to the ORHA Comptroller for assistance in developing a plan to use vested funds to pay 

civil servants.79 The Comptroller requested $100 million to pay civil 

servants and to support humanitarian relief and small reconstruction. 

Washington approved the use of vested funds for these projects.80

After ORHA determined where the money would be housed, it 

set up the process for paying civil servants. An April 11, 2003 memo 

from the Deputy Secretary of Defense stated that Americans would 

have fiduciary responsibility for the money until it was transferred 

to another responsible individual or entity. After a discussion with 

an interagency group, ORHA decided that a “trusted Iraqi” would 

be used to pay the civil servants. The trusted Iraqi would assume 

responsibility for the funds after an American official transferred 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 39

the money. The trusted Iraqi was responsible for obtaining lists of 

civil servants to be paid and then distributing payments. The Army 

provided security as funds were disbursed to the trusted Iraqi and 

subsequently at the paying stations.81 After the payments were made, 

the trusted Iraqi was to provide a list of disbursements and signatures of the people who received the money. Compliance with this 

process, however, was inconsistent at best.

Management of Initial Reconstruction Projects 

funded by vested funds

In April and May 2003, the ministry advisors in ORHA’s civil administration pillar began to identify relief and reconstruction needs. 

These advisors immediately observed the damage that widespread 

looting had caused in Baghdad after hostilities ended: 

One of the biggest obstacles to the ability of ORHA to implement 

anything was the rampant looting that had taken place. The [Iraqi] 

ministry buildings effectively no longer existed. There were no 

windows or doors. They were just concrete shells of buildings.82

Initially, there was no process within ORHA’s civil administration 

pillar for funding rapid relief projects for the decimated ministries.83

Building on the process to pay civil servants, ORHA put together 

systems to fund project requests from the senior advisors and the 

military. The ORHA Comptroller became the conduit for submitting 

requests to the OSD Comptroller. The process required senior advisors or military officers to complete a standard form stating requirements based on the needs of the ministries. Initially, there was no 

formal review of requests in Iraq beyond the individual ministry 

approval of suggested projects. After project funding was approved, 

ministerial advisors designated a trusted Iraqi to be responsible for 

the project.84
40 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Funds were often disbursed before work was performed so materials could be purchased. The responsible individuals would later 

provide evidence that the project had been completed.85 There was 

limited capacity to provide oversight of these transactions. One official noted that the overarching goal was to get Iraqis back to work, 

restore basic services, and execute projects that quickly improved 

local communities. The conditions and time constraints presented 

by the chaotic post-conflict environment meant that depending on 

the trustworthiness of Iraqi workers was essential to the success of a 

project.86

As of June 2, 2003, $500,000 of vested funds had been given to 

support these emergency projects. An additional $2.1 million was 

set aside, pending DoD’s demonstration that the initial $500,000 had 

been spent on projects that benefited the Iraqi people.87

Management of Seized Funds

On May 7, 2003, based on a British model that gave British forces 

“walking around money,”88 a Combined-Joint Task Force 7 

(CJTF-7) operations order initially gave up to $25,000 in seized 

funds to individual brigade commanders.89 A three-page handout 

detailed the procedures to be followed by a paying agent and a field 

ordering officer, who were responsible for disbursing funds for small 

projects. The commanders were responsible for documenting the 

expenditures and providing reports to ORHA. By June 2, 2003, 

$4 million of seized funds had been given to the Brigade 

Commanders’ Discretionary Fund. This was supported by $400,000 

of vested funds.90 

On June 16, 2003, the CPA Administrator changed the fund’s 

name to the Commander’s Emergency Response Program (CERP), 

and on June 19, 2003, the Commander of CJTF-7 issued 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 41

Fragmentary Order (FRAGO) 89, ordering CERP into operation. 

Some CERP projects were managed by military officers with little 

reconstruction and development experience. 

One civil affairs officer noted that he needed “design and implementation assistance: none of us has ever built a landfill or paved 

city roads back in the United States.”91 Other CERP projects lacked 

sufficient oversight and appropriate documentation.92 But CERP 

went on to become one of the most important programs in Iraq’s 

relief and reconstruction.

Management of DFI Funds

On May 22, 2003, U.N. Security Council Resolution 1483 recognized the Development Fund for Iraq (DFI) as a primary source for 

funding Iraq’s recovery. The DFI subsumed the existing Oil-for-Food 

funds and frozen Iraqi assets that belonged to the Iraq government 

or that had been controlled by Saddam Hussein.93 The resolution 

underlined that these funds be transparently managed and disbursed 

under the direction of CPA for the benefit of the Iraqi people.94 On 

June 15, 2003, the CPA’s Administrator signed CPA Regulation 2, 

which applied to the “administration, use, accounting, and auditing 

of the DFI.”95

A CPA-IG audit of CPA’s management of the DFI found that CPA 

“policies and procedures, although well-intended, did not establish 

effective controls.”96 CPA failed to clearly define roles and responsibilities, failed to implement adequate controls, and did not consisCPA failed to clearly define

roles and responsibilities, failed to 

implement adequate controls, and did not 

consistently enforce its own rules to 

ensure transparency of the management 

and disbursal of the DFI.
42 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

tently enforce its own rules to ensure transparency of the management and disbursal of the DFI.97

Of particular concern were the insufficient financial and contractual controls. CPA was responsible for implementing U.S. financial 

management policies, such as the DoD Financial Management 

Regulations (FMR). The CPA-IG audit revealed that the DoD FMR 

“could have been easily adapted to establish policies and procedures 

to account for DFI cash.”98 CPA developed new policies and procedures to manage DFI, but failed to enforce them effectively. Further, 

CPA failed, pursuant to its own rules, to secure the services of an 

effective outside auditing firm to review and advise CPA on DFI 

controls. The accounting firm that CPA did employ only managed 

balance sheets for CPA’s comptroller.99

New Policies Launched without Proper Training 

CPA’s disbursing and paying agents were pressed into service before 

they could be given adequate training on the procedures governing the handling of DFI disbursements. CPA-IG’s review of 26 DFI 

disbursements found that only one included the documentation 

required under CPA’s regulations.100

An early 2005 review of CPA’s financial management practices 

by the OSD found that “effective, efficient financial management of 

non-U.S. fund sources was not accorded a high enough priority.”101

The OSD assessment report found that “financing of reconstruction 

activities began before procedures and staffing were fully in place,” 

and “many policies and procedures were developed in response to 

new situations, not in advance.”102 Further, the report noted that “the 

Army’s financial management system was selected, but the other 

services [members from Navy, Air Force, etc.] were not trained in, 

and therefore did not completely understand, this system.”103
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 43

The OSD review further observed that “at the onset of stability 

and reconstruction operations, there was a lack of clearly defined 

authorities and lines of accountability for financial management 

internal controls,” adding that “modern systems to conduct procurement, asset control, budget execution, and accounting were not in 

place. Financial records were largely kept in a manual system, limiting access only to in-theater personnel.”104 The concerns raised by 

this review were substantiated by CPA-IG’s audit of CPA’s management of DFI.105 

The story of the DFI’s management underscores the need to 

include an effective oversight component in the initial planning of 

any reconstruction effort.

Too Few Contract Administrators To Manage Contracts

Initially, only three contracting officers were in Baghdad to support 

CPA’s relief and reconstruction demands.106 This limited contingent 

constrained CPA’s capacity to provide effective execution of needed 

contracts and contract oversight. There was a similar dearth of contracting officer representatives (COR), who were needed to provide 

technical expertise and to monitor contract performance.107 Unsurprisingly, the lack of sufficient personnel to support CPA contracting 

early on produced problems. A CPA-IG audit found CPA “contract 

files to be in disarray.”108 Some contracts were missing, and others 

were stored on personal email accounts, individual hard drives, or 

external storage devices. See SIGIR’s Iraq Reconstruction: Lessons in 

Contracting and Procurement at www.sigir.mil.
44 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Management of U.S. Funds

Initially, USAID and USACE were the two main U.S. agencies 

responsible for managing U.S-funded reconstruction projects in 

Iraq. By early May 2003, USAID contractors and staff had established offices in Baghdad, although many personnel were still in 

Kuwait awaiting deployment. The formal establishment of the 

USAID mission in Baghdad was announced on July 27, 2003. During the summer of 2003, USAID managed 12 relief and reconstruction contracts and a number of grants and cooperative agreements. 

USACE simultaneously managed Task Force RIO and the FESTs 

deployed with operational Army units. During the spring and summer of 2003, both agencies faced challenges managing their projects 

because of shifts in program scope and funding uncertainties. 

In the spring of 2003, contractor mobilization and the execution 

of initial reconstruction planning efforts were limited by funding 

uncertainties. IRRF 1 was approved by the Congress in April 2003 

when USAID was beginning to implement its relief and reconstruction programs. Early delays were ameliorated when, on May 22, 

2003, the President issued Executive Order 13303, allowing contractors to spend U.S.-appropriated funds immediately on reconstruction efforts.109

Notwithstanding this new spending authority, many program 

managers in Iraq found that, during the summer of 2003, their 

budgets were being cut because of CPA’s shifting spending strategies. 

Consequently, some contractor staff demobilized, and some ongoing activities were canceled or de-scoped. One contractor had to 

lay people off, close regional offices, and scale down reconstruction 

efforts.110 Other contractors were asked by CPA to slow down spending as the IRRF 1 program strategy was being revised.111
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 45

CPA’s assumption of control over all reconstruction planning in 

June 2003 bred tension between CPA and USAID. As CPA expanded and began to exercise its broad authority, USAID contractors 

were required to coordinate their ongoing programs with the new 

strategic plan under development by CPA and the senior advisors. 

This collision of reconstruction management activities sometimes 

caused contractors to receive conflicting requests from different U.S. 

government entities or officials.112

Oversight of contractors became an immediate concern: 

The situation in Iraq was less than stable, and security was becoming a concern across the board. Security cost began to escalate rapidly and was the subject of almost daily briefings/discussions.... Not 

long after the award of the contracts, [USAID] did get four contract 

specialists into country to ‘oversee’ the contracts. I use that term 

rather loosely because I do not believe anyone was able to freely 

visit the contractor sites to see how progress was going...113

During this time, USACE faced growing challenges managing the 

expansion of the RIO project:

Project management was not an issue, program expansion was. 

Our original mission was to restore the oil infrastructure to keep 

crude oil flowing, thus enabling the Iraqi government to receive 

funds to support their recovery. Our first add-on mission was to 

restore the production of [liquified petroleum gas] LPG for cooking 

and boiling of water. That task fell to the RIO team. Then benzene 

(auto fuel) became an issue (gas lines) and our mission expanded 

to include purchasing and transporting fuel from Kuwait. Repairs to 

the production infrastructure were adversely impacted by acts of 

sabotage, but completed prior to hand-off back to the Iraqi Ministry 

of Oil.114
46 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Program Review Board

On June 18, 2003, in an effort to coordinate and prioritize reconstruction planning and projects, the CPA Administrator signed 

CPA Regulation 3, establishing the Program Review Board (PRB). 

The PRB reviewed proposed reconstruction projects—regardless of 

whether they were underwritten by seized, vested, DFI, or appropriated funds—and recommended expenditures.115

The PRB coordinator developed processes, forms, and instructions for requesting PRB approval for reconstruction projects. A 

database was created to track PRB-approved projects. Initially, this 

system only tracked the number of approved projects, and it provided no information on project status. This limited reporting capacity 

obscured visibility on the progress of reconstruction projects.116

Re-thinking the Relief and Reconstruction Program

During the summer of 2003, CPA developed a new reconstruction 

strategy that shifted the focus from a small-scale, discrete relief and 

development effort to an ambitious, large-scale reconstruction program. The shift in strategy was driven by the recognition that many 

initial assumptions that drove early planning proved off the mark. 

[Things] changed over the course of the summer of 2003 as the 

recognition set in that, in part because of the looting and in part 

because of the bad condition of the infrastructure...that the reconstruction issues [were] much larger than was originally believed and 

that the capabilities of the Iraqi ministries to do anything were very 

limited...117 

In July 2003, CPA created its first strategic plan, which established 

five priorities: security, essential services, economy, governance, and 

strategic communication. The plan included broad goals and metrics 

but was not tied to a specific budget.118
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 47

Simultaneously, CPA worked with the interim Iraqi ministries 

to develop the 2003 Iraqi government budget, and the World Bank, 

United Nations, and Bechtel simultaneously conducted infrastructure assessments. Bechtel’s assessment, completed in June 2003, 

identified approximately $16 billion of work in six infrastructure 

sectors.119 The joint World Bank and United Nations report, a draft 

of which was completed in July 2003 (it was later published in 

October 2003), estimated that $56 billion was needed to meet 

median-term reconstruction needs.120

Iraq’s available budget could not yet fund needed reconstruction projects, and thus CPA sought a very large U.S. appropriation. 

At that time, the United States was preparing for an October 2003 

international donor conference. A review of previous donor conferences showed that other countries had been more inclined to 

support “soft” projects, including those focused on education and 

governance. So the CPA Administrator made a strategic decision to 

concentrate the supplemental request on security, justice, and 

infrastructure projects.121

Based on these assessments, and various input from Iraqi ministries, senior advisors, USAID, and USACE, CPA’s budget and finance 

officials put together a large and ambitious supplemental request 

in less than two months. Participants in this process reported that 

there was little time or opportunity to debate.122 In August 2003, the 

CPA Administrator submitted to OMB a multi-billion dollar relief 

and reconstruction funding request to begin the restoration of Iraq’s 

infrastructure (original estimates ranged from $24-$27 billion123). 

In September 2003, OMB submitted a $20.3 billion request to the 

Congress, and in November 2003, the Congress passed legislation 

appropriating $18.4 billion to the Iraq Relief and Reconstruction 

Fund (IRRF 2).
48 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

The Later CPA Period (August 2003 to June 

2004)—Re-Initiating the Program

To manage its significantly expanded reconstruction program, CPA 

created the PMO in August 2003, giving this office the authority to 

oversee the execution of the thousands of projects funded by the 

$18.4 billion IRRF 2 program. The CPA Administrator directed 

PMO to develop a system to execute this program and oversee the 

implementation of more than 2,300 projects.

The Origin of the PMO

In the process of formulating its greatly expanded reconstruction 

program, CPA examined several program management options. 

CPA first considered having USACE, which was already overseeing 

projects in Iraq, manage the entire program. However, USACE officials demurred, contending that the agency did not have the capacity 

in Iraq to exercise oversight of this prodigious program.124 USACE 

was heavily engaged in managing oil and electricity programs under 

Task Force RIO and Task Force Restore Iraqi Electricity. Its primary 

expertise rested in construction management and execution, and not 

the kind of planning, programming, and budgeting demands inherent in CPA’s reconstruction program.125 Moreover, USACE maintained that it could not rapidly secure sufficient staff126 to manage the 

massive program in Iraq.127

CPA consulted with USAID about the structure and direction 

of the IRRF 2 program,128 but USAID did not have the staff nor 

the organizational capacity129 to manage so large an infrastructure-focused program. Additionally, CPA recognized that the Iraqi 

ministries were unable to manage the program, although they were 

included in the project selection process.130
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 49

When it became clear that neither USACE nor USAID nor the 

Iraqi ministries could manage the reconstruction program, CPA 

turned to a core group then serving within CPA, some of whom had 

significant infrastructure and engineering backgrounds. This group 

developed a concept paper that envisioned the formation of a new 

and novel program management office within CPA that would rely 

on contractors both for the management and the execution of the 

reconstruction program. That is, both oversight and execution of the 

program would be largely contracted out.

On August 15, 2003, the CPA Administrator approved the formation of the PMO and directed $10 million to fund its startup. To lead 

the effort, he appointed a retired U.S. Navy Rear Admiral, who was 

then the Deputy Senior Advisor to the Transportation and Communication Office Ministry.131

On September 6, 2003, OMB submitted CPA’s $20.3 billion 

budget request to the Congress seeking supplemental funding for 

Iraq-related activities, a portion of which would “finance the most 

critical needs for security and infrastructure that cannot be met with 

anticipated revenues from oil sales until the entire oil infrastructure 

becomes more robust.”132 To support this request, CPA developed a 

48-page document that discussed the current state of each of the key 

sectors, described illustrative projects, and provided estimated costs. 

However, the request included little analysis of how these costs were 

determined.

The following day, the President addressed the nation about funding Iraq’s relief and reconstruction, stating that the United States 

“will provide funds to help [Iraq] improve security and...help them 

to restore basic services, such as electricity and water, and to build 

new schools, roads, and medical clinics.”133
50 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

CPA immediately issued an information memo announcing the 

creation of PMO and detailing the mission of the office. The memo 

noted that: 

[The] implementation of such a large program, in such a short time, 

is an exercise unprecedented in the worlds of development and 

nation-building and will require an equally unprecedented effort 

in terms of its execution. [I have] therefore decided to establish a 

Program Management Office under CPA to drive this forward, with 

involvement from both the public and private sectors.134

On November 6, 2003, the Congress approved $18.4 billion for 

Iraq’s relief and reconstruction. Compared to the IRRF 1 law, this 

legislation was quite specific, defining allocations among ten sectors 

and outlining a number of requirements and duties that CPA had to 

carry out as it implemented the program.

IRRF-2 Key Components

• Ten sector allocations:

IRRF 2 Original Allocations by Sector

Electricity $5,560,000,000

Water Resources and Sanitation $4,332,000,000

Security and Law Enforcement $3,243,000,000

Oil $1,890,000,000

Justice, Public Safety Infrastructure, and Civil Society $1,318,000,000

Health Care $793,000,000

Transportation and Telecommunications $500,000,000

Roads, Bridges, and Construction $370,000,000

Education, Refugees, Human Rights, and Governance $280,000,000

Private Sector Development $153,000,000

Table 2
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 51

• Re-allocation across sectors. Up to 10% could be re-allocated 

between sectors, but could not increase a sector’s allocation by 

more than 20%.

• Availability of funds. Funds were to be available until September 

30, 2006.

• Cost to complete projects. Before the initial obligations of funds, 

CPA and OMB were to submit a proposed project-by-project 

report, called the Section 2207 Report. The report would list the 

major projects under each of the ten sectors, the costs required to 

complete each project, and anticipated obligations for each threemonth period. The first report was due by January 5, 2004.

• Clarification of responsibilities. The 2207 Report required a list 

of agencies responsible for executing each project. The agencies 

included CPA, DoS, Treasury, DoD, USAID, and the Department 

of Health and Human Services.135

• Capacity development. Agencies receiving funds were encouraged to “provide significant financial resources, technical assistance, and capacity building to counterpart organizations led by 

Iraqis.”136

The USG component of PMO was under-resourced from its 

inception, and thus PMO was dependent upon contractor support. 

When the Congress passed the supplemental funding legislation, the 

PMO director was supported by just two people from USACE and 

14 contractors.137
52 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

PMO Develops a Program Management Plan 

PMO developed a Program Management Plan (PMP), the first draft 

of which was completed by October 2003; the final version was 

approved in March 2004. The plan detailed PMO’s proposed organizational structure, financial controls, personnel needs, information management requirements, and project management tools. The 

PMP provided for the following: 

Limited U.S. government personnel: PMO planned to hire “‘just 

enough’ United States government employees to perform inherently governmental functions, augmented by multiple program 

management contractors who [would] be engaged to oversee the 

large construction contracts, delivering this historic volume of work 

on an accelerated schedule.”138 PMO estimated that a staff of 100 

government personnel would be needed to oversee the program.139

The PMO director—a government employee—would be responsible 

for integrating and coordinating the program, allocating resources, 

clarifying roles and responsibilities, and establishing polices and 

procedures. A Director of Programming would be responsible for 

synchronizing efforts across all the sectors.

Private-sector management support: Seven program management organizations would work with a core team of government 

staff to perform program and project management. One contractor 

would “provide program management support to the CPA/PMO to 

PMO was under-resourced from its 

inception and was primarily dependent 

on contractor support. When the supplemental passed, the PMO director was 

supported by only two people from 

USACE and 14 contractors.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 53

facilitate overall program coordination and management”140 and one 

to support the management of each of PMO’s six sectors: security 

and justice; electricity; oil; public works and water; transportation 

and communication; and buildings, housing, and health. The PMO 

contractor and the Sector Program Management Office Contractors 

(SPMOC) would be “capable of providing the full range of program 

management services including but not limited to: integration and 

coordination; scheduling; resource management; estimating; acquisition and procurement support; logistics support...[and] task order 

development.”141

A program management contractor described the model:

The role of the program management office was to set policies, 

processes, and procedures. It was also to be the overall program 

manager and integrator of the sector programs. The sector program 

managers would write requirements and develop project packages. 

They would also work with the design-build contractors on the 

design of the projects. Once the design was established and the 

project determined, the Corps would step in to oversee the activities 

and provide construction management.142

Private-sector construction expertise: PMO proposed hiring 

twelve design-build construction companies with particular experience in each of PMO’s six sectors to execute the work.143

Government construction management support: PMO asked 

USACE to provide construction management and quality control in 

each sector. A member of USACE was appointed Director of Construction, responsible for all “construction management, coordination, quality assurance, schedule, financial, and progress management at the PMO.”144 USACE was then establishing the Gulf Region 
54 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Division (GRD) to consolidate USACE’s existing offices in Iraq 

under one command-and-control authority.145 On January 25, 2004, 

USACE activated GRD, establishing its headquarters in Baghdad. 

GRD included three districts located in the northern, central, and 

southern regions of Iraq. Staffing for these districts and the division 

headquarters came primarily from four other USACE divisions. 

USACE members deployed to Iraq from these divisions on a rotating 

basis.146

Contract administration: CPA’s contracting office provided contracting officers to work with the PMO’s program managers. GRD 

worked with the CPA’s Head Contracting Authority (HCA) to divide 

up contract administration duties: GRD staff served as the administrative contracting officers, and HCA staff members served as the 

procuring contracting officers for PMO.147 The head of the contracting office also served as the Director of Non-construction, responsible for the procurement of equipment, supplies, and services. 

Integrated financial and information management: To manage 

costs and performance, PMO proposed the development of a new 

information management system that would track key performance 

indicators: cost, scope, and schedule. PMO expected to use part of 

the $50 million allocated in IRRF 2 for reporting and monitoring to 

fund this system.148

Utilization of Iraqis and capacity development: The PMP stated 

that the PMO would use “Iraqi capabilities—planners, administrators, contractors, subcontractors, suppliers, and other Iraqi personnel resources—to the greatest extent practicable.”149 PMO expected 

to coordinate with Iraqi ministries to develop project requirements 

and also expected the design-build contractors to transition their 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 55

skills and knowledge to the Iraqi people. The transfer of knowledge, 

skills, and abilities was a requirement in the program management, 

sector program management, and design-build contracts.150 This 

was expressed directly in design-build contractors’ award fee: 40% 

of their possible fee was based on their ability to meet subcontractor 

goals and train, develop, and transition projects to the Iraqis.151

Figure 2 illustrates the various layers of PMO.
56 

I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT SPMO: Oil Sector SPMO1: Electricity Sector D-B2 Contracts Direct Contracts

Subs3

Subs

Subs Subs

Subs

Subs Subs

Subs

Subs Subs

Subs

Subs Subs

Subs

Subs Subs

Subs

Subs

Program Management Oce (Government)

Program Management Oce Support 

(Contractor and Government)

SPMO: Public Works

/Water Sector

1 Sector Program Management Oce (Contractors and Government)2 Design-Build3 Subcontractors

SPMO: Comm/

Transportation

 Sector

SPMO: Buildings/

Education/

Health Sector

SPMO: Security/

Justice Sector

D-B

Contracts

Direct 

Contracts

D-B

Contracts

Direct 

Contracts

D-B

Contracts

Direct 

Contracts

D-B

Contracts

Direct 

Contracts

D-B

Contracts

Direct 

Contracts

PMO’s Layered Management ApproachFigure 2
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 57

PMO Struggles To Execute Its Plan

PMO was heavily reliant on its management contractors, but there 

was confusion about the actual roles and responsibilities of the various actors within PMO.152 In addition, a number of logistical issues 

impeded PMO’s progress, including hiring staff, developing the new 

information management system, and creating a plausibly executable project plan. Resolving these issues consumed most of PMO’s 

efforts from inception until March 2004, when the design-build 

contracts were all finally awarded. 

Defining Roles and Responsibilities

PMO’s government staff and its program management contractors 

had different understandings of their respective roles and responsibilities. Specifically, there was confusion about the scope of the 

supervisory contractors’ responsibilities.153 To address this issue, 

PMO began to develop standard operating procedures (SOPs). A 

team of contractors and government employees were tasked to create 

the SOPs; however, they were not completed until the summer of 

2004 and thus were never truly implemented during the life of PMO. 

One contractor observed that “you need a unified program management approach. [We] never got that, never got anybody to agree that 

we were on the right coordinated track.”154 

Inherently Governmental Function 

The responsibilities of the program management contractors were 

not adequately detailed in their respective contracts. This was partly 

because of the “uncertainties of the reconstruction program.”155 The 

SPMOC contracts stated that “the duties to be performed under this 

contract [are] necessarily general. Attempting to develop a finite 

description of the tasks would serve little purpose given the irreducible uncertainties of the reconstruction effort.”156
58 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

This issue was not properly addressed until after the management 

contracts were awarded in March-April 2004. Only then were contractors asked to submit a program management plan that defined 

their roles and responsibilities within PMO. 

In August 2004, a review by DCMA and the Defense Contract 

Audit Agency (DCAA) concluded that the contractors’ program 

management plans were so broad that the contractors might have 

been performing inherently governmental functions. DCMA and 

DCAA recommended that these plans be approved only if they 

expressly limited the contractors’ scope of work to non-governmental duties.157 Later, a responsibility matrix was created to avoid 

any potential issue of contractors performing governmental duties, 

but the matrix was not made part of the contracts until the second 

year.158

Funding 

Pursuant to the CPA Administrator’s September 9, 2003 request, the 

OSD Comptroller approved $10 million in U.S.-appropriated funds 

to support PMO’s operations for the first six months.159 In addition, 

inherently governmental function

An inherently governmental function is 

one that “is so intimately related to the 

public interest as to mandate performance 

by Government employees.” An inherently 

governmental function includes activities that 

require either the exercise of discretion in 

applying Government authority, or the making 

of value judgments in making decisions for 

the Government. 

See FAR 7.5 for specific examples (online at: http://

www.acquisition.gov/far/current/html/Subpart%207_

5.html#wp1078196, accessed February 25, 2007).
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 59

USACE provided $9 million to prepare the project plan and initial 

scopes of work.160 During the fall of 2003, these funds supported 

PMO’s staff.161 Additional money was needed to hire government 

personnel to manage the program, but this funding was not yet 

available. See infra p. 61.

Thus, PMO was understaffed. PMO was structured such that 

“there could only be a few key government people providing 

oversight. The projects were many, so there needed to be a lot of 

contractor help to manage [the program].”162 More than $200 

million was allocated from IRRF 2 to fund the program management contractors.163

Hiring Staff

In November 2003, when the IRRF 2 supplemental passed, PMO 

was staffed with 3 people and supported by 14 USACE contractors. By January 2004, eight government personnel were working in 

PMO.164 PMO found that the government was not as agile as the private sector in hiring people, and some qualified candidates dropped 

out of the process because of lengthy delays.165 In August 2004, a 

year after PMO was created, the office had only 50 of the 100 people 

that the director had requested.166

Finding people with a comprehensive understanding of program 

management—including the development of an appropriate cost, 

scope, and schedules for each project and task order—proved to be 

an enormous challenge.167 In addition, the relatively short tours of 

some government personnel adversely affected continuity. Contractors hired people for one-year assignments, but the staff supplied by 

the various military services had tours of only four or six months, 

frequently with gaps during turnovers.168
60 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Establishing an Information Technology System

At its inception, PMO did not have an information management 

system to track projects. PMO leadership decided to fund the 

development of a specialized system to manage the program’s projects, which was expected to be eventually provided to the Iraqis.169

This decision was driven by the conclusion that “no existing DoD 

management solution provides the full complement of integrated 

capabilities that were required.”170

PMO sought to have an operating data management system by 

January 15, 2004.171 However, developing and implementing this system proved much more difficult than expected. First, PMO did not 

receive the $50 million earmarked in the supplemental appropriation 

for project management systems until May 2004. A SIGIR report on 

the use of these funds found that only $26.2 million was spent on 

system development. IRMO used the remaining funding for salary 

support.172 Second, many of the program management and designbuild contractors used different information systems; their contracts 

did not require all contractors to conform to a common standard.173

The PMO contracting and finance departments also used different systems. Integrating and managing these various databases was 

virtually impossible. 

The various information systems included:

• Standard Procurement System (SPS) and Procurement DesktopDefense (PD2) —DoD’s automated contracting system

• Resident Management System (RMS)—USACE’s construction 

management system

At its inception, PMO did not have 

an existing information management 

system to track projects. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 61

• Corps of Engineers Financial Management System (CEFMS)

• Primavera P3 (Project Management)—commercial software for 

planning and scheduling

• Maximo—commercial software for asset management, which can 

also integrate other program elements, such as contract 

management

In January 2004, GRD’s Director of Resource Management 

arrived to set up CEFMS, which is the USACE project tracking system. By February 2004, the first funding document was loaded into 

the system.174 However, it took additional time to integrate all of the 

systems: they were not fully integrated until the spring of 2005. See 

infra p. 107. 

Networking and storage space also posed significant challenges. 

Data storage capacity was limited, which constricted the ability of 

managers to maintain electronic files.175 Interoperability was also a 

serious obstacle. One official noted, “there was no connectivity or 

linking to any other office, except for email.”176

The delay in creating integrated information systems greatly hindered the capacity of program managers to oversee and control the 

program. PMO “needed a system just to [keep] track of the program. 

When you lose track of a program, a big program like this with 

[2,300] projects, you never get it back.”177

“We needed a system just to 

[keep] track of the program. When 

you lose track of a program, a big 

program like this with [2,300] projects, 

you never get it back.”
62 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Negative Effects of an Accelerated Timeframe: 

Developing the Project Plan, Establishing Metrics, 

and Managing Expectations

After the supplemental funding request was submitted to OMB, a 

team of consultants worked from October until December 2003 

to help PMO develop the specific projects that would make up 

the PMO’s reconstruction program. They worked with the senior 

advisors and ministries to determine the project list. The CPA 

Administrator directed that the CPA’s senior advisors and the Iraqi 

ministries—not the PMO—should determine which projects would 

be funded under the IRRF 2 plan.178 But the involvement of the ministries varied. Some ministries had “designs sitting on their shelf,” 

while others were not prepared to participate.179

USACE contractors identified about 5,000 projects, developed 

rough cost estimates (including security and program management 

costs) for each, and then prioritized the projects based on need and 

available funding. Lower priority projects fell below the funding cut 

line, and these proposals were given to Iraq’s Ministry of Development, Planning, and Cooperation, which was expected to work with 

other donors to fund them.

On December 1, 2003, the prospective project list was passed 

to the CPA Administrator. Over the next nine days, CPA regional 

advisors and military commanders in the field reviewed and further 

prioritized the projects.180 A final list of approximately 2,300 projects was completed on December 10, 2003, and sent to Washington, 

D.C., for final approval. This list was approved and incorporated into 

the first Section 2207 Report to the Congress, submitted on January 

5, 2004.181

However, PMO was severely limited by time and resources during 

the formulation of its program: 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 63

Forty-five days is not enough time. I don’t care how hard you work, 

or how good you are, or how smart you are, or what your agency is, 

that’s not enough time to put [an $18.4 billion] program together.182

At this time, CPA had also not tied this spend plan to its July 2003 

strategic plan. In September 2003, the Deputy Secretary of Defense 

tasked a team within the OSD to assist with the development of 

CPA’s metrics.183 One of the team’s first tasks was to link CPA’s strategic plan to the supplemental request. Based on the supplemental 

allocation, CPA’s five goals were funded as follows:184

• security: $4.315 billion

• essential services: $13.246 billion

• economy: $563 million

• governance: $563 million

• strategic communication: no funding

The CPA supported the development of metrics and continually 

monitored outputs in the oil, electricity, and water sectors. However, 

the CPA’s capacity to consistently collect and analyze information 

on the entire reconstruction program decreased in November 2003 

when the USG decided to transition responsibility to the IIG by June 

30, 2004. This decision forced the CPA to focus more of its attention 

on the immediate steps required for a successful political transition 

rather than on longer term reconstruction goals.185Program managers did not develop a consensus on the benchmarks for more specific 

outputs across all sectors until after June 2004. See infra p. 102.

Managing expectations became a growing challenge for the PMO 

during this period. The understanding was that the work would be 

done quickly: 
64 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

We were going to build the whole thing the first year. That was the 

message to the outside. No matter how hard we tried, that was the 

measuring stick that came over every video teleconference, not 

spending enough, not doing enough projects...Somehow we did not 

get the expectation right on what it would take to do 

$18 billion worth of work.186

After the supplemental request passed in November 2003, the 

Deputies Committee continued to debate the purpose of the money 

and how it would be managed. There was disagreement about the 

PMO, who should be responsible for the money, and what types 

of projects should be funded. This delayed the procurement of the 

design-build and program management contracts—and 

consequently, the execution of projects—by 30 to 45 days.187

The delay in the arrival of IRRF 2 funds had a severely constricting effect upon the reconstruction program.188 In addition, 

once money did arrive, the emphasis focused on project starts 

and amounts obligated and expended. Some failed to consider the 

inevitable time constraints associated with preparing designs, hiring 

subcontractors, and initiating work.189

Project Execution Delays: 

Before the Design-build Contractors Arrived

Between September 2003 and March 2004, before the arrival of 

the design-build contractors, several factors combined to slow the 

reconstruction effort. Existing government organizations lacked the 

capacity to manage “the scale and complexity of the reconstruction 

effort funded by IRRF 2,”190 but the decision to create PMO—and 

the significant amount of time and resources it took to develop the 

new office and hire its supporting contractors191—directly affected 

the execution of projects. With respect to existing projects, managers 

continued to face shifting priorities and changes in funding, which 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 65

affected their capacity to execute according to project schedules. 

For new activities, including the procurement of non-construction 

goods and services, the lack of operational systems and effective 

procedures limited progress. 

Shifting Priorities 

CPA’s decision to focus on large infrastructure projects created a 

deep division192 among those involved in the reconstruction effort 

about the appropriate priorities for reconstruction.193 Several USAID 

officials operating in Baghdad during this time did not agree with 

CPA’s direction,194 and argued that more funds were needed for agriculture, democracy, and economic reform (including private-sector 

business development).195

If I go to an elected official and say what do you need, they’re going 

to say build me something. They’re never going to say...please put 

me through the tortured process of [for instance] reforming our oil 

pricing system.... What needs to be done is never what the politicians ask for....

So, the reason the substantive issue was so difficult is that those of 

us who...were arguing, you know, do this stuff first, don’t build stuff, 

but on the other hand, I read the same...public opinion surveys that 

[others] read...and there was a huge imperative to build things.196

USAID developed a budget, which would have allocated $5 billion of 

IRRF 2 to the agency as follows:

• Infrastructure: $3.25 billion 

• Health, Education, and Humanitarian Assistance: $250 million

• Economic Governance, Agriculture, and Marshlands: 

$550 million
66 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

• Local Governance, Elections, and Community Programs: 

$800 million

• Monitoring and Evaluation: $150 million

This proposed budget was not included in the final supplemental 

request. However, by March 2007, USAID received approximately 

$3.9 billion of IRRF 2 funds.197 See infra p. 86.

Agreeing on who ultimately held decision-making power for the 

reconstruction programs and project selection was a problem. PMO 

executed the program, but was not the decision-maker. The senior 

advisors were the authorities on what projects should be funded and 

the direction of the overall program. “Ultimately, [the CPA Administrator] was the decision-maker.”198 Others involved with PMO, 

however, reported that conflicting agency interests hampered good 

decision-making.

We thought we knew, we were told who the decision-makers were, 

but the truth is on the ground...you had all of these advisors out 

in the various areas, you had all the [military] commanders [and] 

sometimes those priorities did not match and then you talked to the 

ministers or you talked to the leaders in the local Iraqi areas, and you 

were trying to overlay all those desires and hit a high pay-off target 

where they all say it was a priority.199

This tension created management challenges, but differences in 

priorities and opinions also presented significant challenges at the 

contractor level. In its audit of a USAID economic reform project, 

the USAID Office of Inspector General (USAID OIG) found that of 

38 planned activities, 10 had been completed, 6 were cancelled, and 

22 were ongoing, as of May 31, 2004.200 The audit found that some of 

the delays were the result of CPA’s changing strategies:
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 67

One of the challenges was the limited control that USAID/Iraq had 

in managing this program. As a development agency, USAID often 

adopts a long-term perspective that focuses on building the host 

country’s capacity and self sufficiency in order to promote self 

government. On the other hand, the CPA was more focused on 

addressing near-term priorities that would affect an orderly transition 

of power to a sovereign Iraqi government. Consequently, there 

were different priorities based upon these discrete institutional 

approaches and roles. As a result of the different priorities, the Mission could not exercise its normal latitude and control in addressing 

problems in the design and implementation of its activities.201

USAID Operations during CPA/PMO

In September 2003, USAID’s reconstruction portfolio included 

projects in health, economic governance, local governance, infrastructure, and education. Contractors had spent the previous spring 

and summer mobilizing, developing work plans, and commencing 

initial activities. USAID’s September 23, 2003 report highlighted 

some of its ongoing projects: infrastructure work and equipment 

repair at Baghdad’s International Airport; assessments and repairs 

of key bridges; identification of more than 500 community activities 

through the community action program; an accelerated program to 

rehabilitate 1,000 schools by October 2003; teacher training initiatives; the emergency repair and rehabilitation of power generation 

facilities and electrical grids; the distribution of health kits; the 

award of more than 800 rapid-response grants; opening the Port of 

Umm Qasr; the establishment of local councils; and renovations of 

major sewage treatment plants.202

After PMO was created, the scope of USAID’s operations significantly changed. Under IRRF 1, OMB apportioned reconstruction 

money directly to USAID, which gave the agency both fiduciary 
68 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

and executive responsibility for projects approved by ORHA or 

the CPA.203 Under IRRF 2, however, PMO “kept track of the funds 

and managed the overall program.”204 PMO managed the scope 

of USAID’s project activity under IRRF 2, which created friction 

between USAID and CPA/PMO: “[USAID] did not like the control 

that [PMO] exercised.”205

However, this coordination was required as PMO was in charge 

of all reconstruction activities funded by IRRF 2, and the Army was 

fiscally responsible for the execution of IRRF 2 funds.206

Failing to Use Existing Capacity 

From September 2003 to March 2004, only a limited number of 

organizations focused on infrastructure construction efforts because 

the design-build contracts were not issued until March 2004.207

Some of the military units with the capacity to execute reconstruction projects failed to receive resources needed because of the 

centralized structure of the program: 

We have the [PMO] working in August, September, October, November [2003] with almost no people to determine what the requirements 

are, even as military units across Iraq had had to submit any project 

that was valued at over $10,000 to Baghdad to be prioritized. We had 

hoped [these projects would] one day be funded and executed by 

someone since we weren’t authorized to execute it, even though we 

had designers, construction managers, quality assurance inspectors, 

contracting officers, finance officers. We had people, communications, transportation, security, and we had identified these requirements....When [the CPA Administrator] visited in mid-May to Mosul as 

an example, we gave him $20 million of scope of estimated work that 

needed to be done; we got $200,000. We left that capacity on the 

table for a year...that was a huge loss, and it was a loss because of 

this compartmentalization and this over-centralization.208
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 69

Bechtel’s second infrastructure contract, awarded in January 2004, 

was intended to bridge Bechtel’s first contract and the design-build 

contracts that PMO would manage. When the contract was awarded, 

Bechtel set up its organization and mobilized staff to manage a 

$1.8 billion program. Bechtel’s task orders were not issued as quickly 

as originally anticipated: between January and April 2004, Bechtel 

received only six job orders, totaling approximately $213 million.209

Bechtel was fully mobilized and could have moved forward 

to increase services throughout Iraq, as PMO awarded the other 

design-build contracts.210 In addition, the delay increased Bechtel’s 

overhead costs, thus reducing the amount available for actual 

construction. 

CPA Initiatives to meet immediate needs

During early 2004, CPA expanded the use of DFI funds for the 

reconstruction program, pending the award of the design-build 

contracts. CPA thereupon created a new program, the Accelerated 

Iraq Reconstruction Program (AIRP) and provided more funding to 

CERP and the Rapid Regional Response Program (R3P).

CPA had created R3P in September 2003 as a civilian equivalent 

to CERP. The program was “designed to provide maximum flexibility 

to regional and governorate coordinators in implementing projects responsive to the needs in their areas of responsibility.”211 The 

R3P was funded by approximately $250 million in DFI funds212 and 

focused on job creation and small, high-impact projects.213

By January 2004, regions could execute programs up to $500,000 

(up from $200,000) without prior Regional Program Coordinator 

approval.214 However, in at least one region, “personnel did not use 

effective procedures to monitor performance of contracts; and, in 

some cases, projects were not monitored at all.”215 SIGIR investiga-
70 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

tions uncovered a criminal scheme involving R3P funds in Hilla, 

Iraq, resulting in the prosecution and imprisonment of several 

individuals.

In April 2004, the CPA Administrator initiated the AIRP in 

ten strategic cities: Baghdad, Ba’quba, Falluja, Mosul, Ramadi, 

Samarra, Tikrit, Najaf, Diwaniya, and Kerbala. Teams deployed 

to these cities to help local officials prioritize projects. Technical 

experts assisted with the development of scopes of work, and 

provided contracting support.216Many of the AIRP projects focused 

on water and sanitation. 

According to a June 22, 2004 DoD status report, the AIRP had 

employed 5,400 Iraqis on projects.217 Some of those employed 

completed site preparation work in anticipation of the design-build 

contracts.218 At the time of transition, 33 contracts valued at about 

$130 million had been awarded,219 and approximately 150 projects, 

totaling $277 million, had been approved. See infra p. 101.

initial logistics challenges and Delays

The IRRF 2 supplemental request originally focused on infrastructure projects, not equipment. However, during the development of 

the first project spend plan, it became clear that senior advisors and 

the Iraqi ministries wanted funds for non-construction equipment 

and materials. The spend plan included approximately $4 billion for 

non-construction and $1.8 billion for capacity building.220

In December 2003, the head of PMO asked a Marine Corps Colonel to be PMO’s Director of Reconstruction Logistics, responsible for 

the acceptance, storage, and wholesale distribution of non-construction equipment and materials. Non-construction items included fire 

trucks, spare parts, hospital furniture, pumps, generators, and many 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 71

of the other needs of the ministries. Non-construction also included 

equipment for the Iraqi security forces. 

Initially, PMO was not set up to manage non-construction 

projects, including the logistics associated with shipping, handling, insuring, transporting, and storing this equipment. Logistics 

requirements took time, resources, and more personnel than were 

available.221

There was a crucial need to support the ministries and the New 

Iraqi security forces. To fill this need, contracting officers initially 

used DFI money to buy equipment and materials, often based on 

anticipated requirements. But there was no logistics system set up to 

handle the equipment purchased with DFI funds, and there was no 

specific agency responsible for “inventorying and signing for goods 

coming into Iraq.”222

Lacking a specific location to send equipment, contracting officers 

created an end shipping destination: “Baghdad Warehouse.” Initially, 

no such warehouse in Baghdad existed. When equipment arrived, 

contracting officers and program managers stored equipment 

wherever they could. One program manager observed that he “was 

ordering guns, ammunition, vehicles, and other items with no organized receiving point. For instance, the guns and ammo were going 

to the basement of the courthouse, the only place we could find.”223

In February-March 2004, an inter-agency assessment team traveled to Baghdad to examine contracting, acquisition, and logistics. 

Regarding logistics, the team found that the non-construction 

program was under-resourced and that a plan was needed to “synchronize, prioritize, [and] de-conflict movement of supplemental, 

non-appropriated, and donated material into theater/country.” An 

ongoing challenge was “clearly defining requirements for non-construction acquisition.”224
72 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

The team developed 17 recommendations to improve management of logistics and the non-construction program, including:

1. Creating a rear contracting office to handle non-construction 

buys

2. Establishing a non-construction office

3. Creating a program management team to assist the ministries in 

defining and determining requirements

4. Clarifying who has authority to purchase goods225

A similar review by the U.S. Army Audit Agency (USAAA) concluded that, “in the early stages of implementing the FY 2004 IRRF 

program, a limited number of personnel were available for determining the accuracy of the receiving reports and invoices.” PCO 

personnel indicated that “spot checks were occasionally performed, 

but without any standard process. Because of the increased security risks at the time, there was a problem getting personnel to the 

receiving points to inventory and sign the receiving reports.”226

Logistics Improvements

The Director of Reconstruction Logistics immediately recognized 

the need to improve accountability of equipment and supplies entering Iraq. After he received $16 million in DFI seed money, he located 

two storage facilities—one at the Umm Qasr port and another at 

Abu Graib—to become principal receiving points for “Baghdad 

Warehouse” materials. During the summer of 2004, he worked with 

the contracting team to award a logistics support contract and set 

up a database to track all equipment entering these two storage 

facilities. 

By the fall of 2004, the logistics team was able to account for 

all inbound IRRF non-construction equipment and materials that 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 73

would be stored at the Umm Qasr port and Abu Graib (this particular team was not responsible for tracking equipment and supplies en 

route to the warehouse). In January 2006, in a review of the accountability of FY 2004 IRRF funds, USAAA found that “PCO’s process 

for “receiving goods and services based on the invoice and receiving 

report”227 generally followed the required USACE guidance.

The logistics team did continue to experience some management 

challenges in the process of handling DD250 (material inspection 

and receiving report) accounts, including the government’s struggle 

to make timely payments, due to “receiving reports not properly 

signed and untimely submissions.”228 This resulted in some vendors 

becoming unwilling to deliver supplies to Iraq. To resolve this issue, 

PCO and DCMA developed a memorandum of understanding 

(MOU) to establish roles and responsibilities, ensuring that a representative was present to receive goods. This MOU was completed in 

October 2004 and renewed in 2005.229

Another significant challenge for the logistics team was personnel 

turnover. The logistics team consisted of eight certified U.S. government contracting officer representatives who supervised five separate 

contracts. Over the course of three years, 81 people filled these 8 

spots.230 In addition to the turnover within the logistics team, the 

turnover within organizations ordering the equipment meant the 

logistics team continuously had to re-educate them about the importance of proper logistics execution during planning and budgeting.

Project Execution Delays: After the Arrival 

of the Design-build Contractors

By April 2004, all contracts for program management support as 

well as the design-build contracts had been awarded, and contractors began to mobilize. Design-build and program management 
74 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

contractors were given 30 days to mobilize. Although some began 

work in April, many took 45 days to get started.231 Concerns about 

security caused some contractors to delay sending their people to 

Iraq.232

When they arrived, some contractors found an organization 

unprepared for their arrival. Because the program management contracts were awarded at the same time as the design-build contracts, 

a solid management structure was not yet in place.233 One designbuild contractor found that contracting officers had not yet received 

a copy of its contract:234

So we’ve been given tasks to mobilize, get ourselves to Iraq, and 

there was no one in Iraq that had even seen the contract. They had 

to get it from us.235

The contracting office was supposed to receive the contracts 24-

48 hours after the contracts were awarded, but the lack of integrated 

systems prevented this. Some information could be forwarded via 

email, but some of the files were too large. Most of the actual contracts did not arrive in theater until April 2004.236 Insufficient project 

information and slow funding also caused delays.

Insufficient Project Information 

The original goal was to have the program management contractors 

prepare the scopes of work for the design-build contractors. 

However, these contracts were not awarded until March 2004. 

Government staff, who did not necessarily have the skills to 

adequately complete this task, worked with the USACE contractors 

to prepare the initial scopes of work:
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 75

We knew that [it] had to be done, so we set ourselves to preparing 

these task orders...it was a very difficult time and challenging time 

for the people that were here to engage in this task order preparation. The task order preparation is where you define for the designbuild contractor exactly what it is that you want him to design and 

build, involves a lot of leg work, a lot of homework and putting a lot 

of documents together that eventually become part of the contract 

that tasks that design-build contractor to do the work. If it’s not done 

well that part of the design-build contractor’s work will not start out 

well. So, it was important work, but it was work that wasn’t intended 

to be...done by...government staff. It was intended to be done by 

contractors.237

USACE contractors worked with the government sector leads 

to create the initial sets of scopes of work, which would later be 

incorporated into task orders. After they were developed, they were 

put aside in anticipation that people would arrive later to implement 

them. At that time, the team prioritized efforts based on projects that 

would make an immediate impact or projects that already had plans 

in place.238

When program managers began to develop the task orders, they 

found that the utility of these initial scopes of work varied across 

sectors.239 In the end, some of the task orders did not provide accurate information on the current condition of Iraq’s infrastructure. 

Others did not consider existing designs within certain ministries. 

“So we’ve been given tasks to mobilize,

get ourselves to Iraq, and there was no one 

in Iraq that had even seen the contract.

They had to get it from us.”
76 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

And some were developed without consulting Iraqis. Finally, some 

designs and design standards proved to be unworkable, too technically advanced, or not culturally appropriate. When contractors 

arrived onsite, unforeseen needs increased costs and delayed construction. For example:

• Before dredging could begin at the Port of Umm Qasr, the piers 

needed repairs.240

• Unanticipated land ownership issues delayed the construction of 

court facilities.241

• Unplanned site conditions delayed the construction of primary 

healthcare centers.242

Funding Delays 

During the spring of 2004, the original Section 2207 Report became 

an integral part of the project execution process. PMO program 

managers packaged projects, using this report as their guide.243 Then 

project requests were provided to the PMO finance office. Finance 

staff members worked with the contracting staff to ensure that task 

orders could be traced back to project descriptions in the Section 

2207 Report. 

The IRRF 2 supplemental directed that changes to projects identified in the initial Section 2207 Report must be justified and approved. 

In the end, some of the task orders did 

not provide accurate information on the 

current condition of Iraq’s infrastructure. 

Others did not consider existing designs

within certain ministries. And some were 

developed without consulting Iraqis.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 77

One official described this as an arduous process.244 The PMO 

finance department then forwarded the request to the Army, and the 

Army sent it to DoD. DoD provided it to OMB for final approval. 

OMB then released the funds to the appropriate executing agency. 

Initially, OMB delayed approval, which stalled the overall process.245

I think it’s the age-old dilemma [between Washington and the field], 

do you trust the people in the field when people back in Washington 

don’t really know what the people in the field are doing? ...I think 

there was the impression that, at least we thought so [in Iraq], that 

Washington wanted to look at everything. They wanted to have complete information–if you were working on an oil cap project, they’d 

want to know, well, who’s the contractor, and how’s it being done, 

and when’s it going to be finished?... I think that, in my 20-year experience at OMB, this was a level of control and oversight and intervention that I’d never seen before.246

The contracting staff could not issue the task order until funds 

were released. When the money was released, negotiations with the 

contractor would begin, which often took about 30 to 90 days.247

Effects of Incremental Funding: An Example of Inefficiency

Most reconstruction projects depend on other projects and must be 

properly sequenced. A senior advisor commented that “you’ve got to 

do the right projects at the right time or it doesn’t work. The whole 

thing will shut down if you don’t do those things in sequence.”248

Projects in Iraq, especially in the oil and electricity sectors, were not 

always developed in the proper sequence. 
78 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

There was a sequence of events...that had to be done.249 We did the 

engineering, the design, and parts list for [all the] task orders. [Then 

PMO] would come in and say, okay, we have [a certain amount of 

money]. Put it on task order number four. We’d come back, task order 

four is third in line to 11, 15, 19—you have to do 11, 15, and 19 first, 

before you do 4...We couldn’t get the thought process linked and 

sequenced to be able to do anything productive.250

Incremental funding, lack of direction, and turnover of staff were 

contributing factors. “There was never a continuous stream of funding. I went through seven contracting officers in six months. There 

was never a continuity of leadership, focus, thought...”251

Security Delays

All projects were affected by the change in the security situation, 

which became even more dangerous in April 2004. Some construction projects were destroyed after they were finished.252 Related 

factors contributed to delays, including reduced workdays to allow 

for staff to travel during daylight, evacuations because of civil unrest, 

and the inability of trucks to deliver supplies.253 One project experienced “three evacuations, a hijacking incident, and the ransacking 

of [two project] offices.”254 Looting, sabotage, and attacks on people 

occurred at some of the infrastructure contractors’ construction 

sites.255

Quantifying the Delays

PMO asked the design-build contractors to deploy to the region just 

after signing their contracts. They were given initial mobilization 

task orders to do so, and the contractors rapidly deployed assets to 

Iraq. It naturally takes time to mobilize and begin projects. But, due 

to the constraints discussed above (security, funding, inappropriate 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 79

scopes of work, and indecision) the design-build contractors were 

not immediately put to work by PMO. Under their cost plus contracts, the contractors continued to incur costs and charge overhead 

costs to the government, even though many were not working on 

actual reconstruction projects.

A recent SIGIR audit on this issue stated that 5 of the 12 designbuild contractors charged $27 million in mobilization costs, $62.1 

million in administrative costs, and only $26.7 million in direct 

project costs between March and November 2004.256

Of these five contractors, the first to receive a task order did so 

three months after it arrived in Iraq; one contractor waited nine 

months before substantial work began. The latter contractor, KBR, 

received its mobilization task order on February 14, 2004, but did 

not begin substantial work until November 19, 2004. During this 

time KBR billed $52.7 million in administrative costs and $13.4 

million in project costs. This is only a partial account of the indirect 

costs incurred during this time.257 Administrative task orders were 

not issued immediately, and when issued, they were not issued to all 

of the design-build contractors. 

Overcoming Implementation Challenges 

and Delays: An Example of Cooperation

The Blackwater incident in Falluja in April 2004 was a “defining 

moment, and everything changed.”258 It changed the way many 

contractors operated. The deteriorated security situation caused 

some contractors to run their programs remotely. Other contractors 

managing both construction and non-construction projects reduced 

security risks by calling on their Iraqi counterparts and the U.S. 

military.

Some contractors moved to northern Iraq and other safer areas, 
80 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

and they relied on their Iraqi staff to run the day-to-day aspects of 

the projects. Iraqi engineers and other employees working on the 

USAID-funded infrastructure project continued field inspections 

of work sites.259 Iraqi subcontractors were able to continue work on 

many water and sanitation projects even in areas where daily fighting was underway.260 Attacks appeared to target U.S. personnel; thus, 

it was important to reduce the appearance that projects were run by 

Americans.261

Officials and contractors stressed the need to hire and train local 

counterparts at the beginning of a reconstruction program. Iraqi 

involvement not only helped develop capacity, it minimized security 

risks.262

Overcoming Implementation Challenges and Delays: 

Another Example of Cooperation

In spring 2004, USAID and the 1st Cavalry Division (1st Cav) of 

the U.S. Army overcame many obstacles to progress by combining 

their strengths: USAID, through OTI, had the processes in place 

to issue grants, and the 1st Cav had people to provide protection 

and oversight. Together they implemented projects focused on job 

creation, with the common goal of improving security and basic 

services, such as sewage collection, trash removal, and water and 

electricity distribution. By focusing on these initiatives, USAID and 

1st Cav demonstrated to the Iraqi people a presence on the ground 

that could enhance their quality of life.263

Members of USAID and 1st Cav jointly approached the CPA 

Administrator, who approved the realignment of $162 million 

to support this effort.264 USAID and 1st Cav worked together to 

develop a scope of work for the project and then used OTI’s fast 

and efficient grant mechanism to initiate the work.265 Ultimately, the 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 81

project employed about 57,000 Iraqis per day.266

The 1st Cav and USAID worked well together for several reasons. 

OTI asked a member of the 1st Cav to sit in OTI’s office space. This 

helped alleviate differences in terminology between the two organizations. For example, the military and OTI used two different processes for identifying addresses, which sometimes caused delays and 

or confusion when locating a project site. This issue was addressed 

with the co-location of staff.267 The 1st Cav leadership understood 

the importance of thinking about non-military ways to improve the 

situation on the ground and reached out to various players to build 

partnerships and projects. In addition, because 1st Cav was in Baghdad, it could build off of existing resources more easily than units 

stationed in remote parts of the country.268

The End of PMO

The contractors and employees hired to manage contractors or 

design and build projects arrived in April and May 2004. They 

found an organization again in transition. On November 15, 2003, 

it was announced that the United States would transition authority 

to the Iraqis by July 1, 2004. And on May 11, 2004, President Bush 

announced that by June 30, 2004, the PMO would be dissolved and 

replaced by two new offices, PCO and IRMO.269 Contractors arriving 

during this transition were faced with an unexpected challenge: 

...we finally got...the majority of the contractors there in May. We 

did away with [the] PMO in July, and then we started [another] new 

organization.270
82 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

U.S. Mission/Iraqi Government 

(July 2004 to Present)—Executing and 

Controlling the Program

The third phase of the Iraq reconstruction program focused on 

jump-starting the infrastructure reconstruction effort, improving 

management systems and practices—including oversight—and 

responding to a continuing parade of organizational and programmatic shifts. Although progress was made in these areas, it was often 

reactive. And many of these program management enhancements 

were not fully implemented until a year or more after the start of the 

IRRF 2 program. 

Roles and Responsibilities Shifted and Clarified 

During the year following the dissolution of CPA, several significant 

organizational changes realigned program management responsibilities and functions among the various entities involved in the Iraq 

reconstruction program. 

In May 2004, National Security Presidential Directive 36 (NSPD 

36) made DoS responsible for the U.S. reconstruction program 

in Iraq, “with the exception of U.S. efforts relating to security and 

military operations, which would be the responsibility of DoD.”271

As a result, PMO’s duties were split between two new temporary 

organizations after the transition—the DoS-run Iraq Reconstruction Management Office and the DoD-led Project and Contracting 

Office. IRMO took on the overall management of the Iraq reconstruction program; PCO was tasked with acquisition and project 

management support for DoD construction and non-construction 

projects. USAID reported to the Chief of Mission and coordinated 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 83

with IRMO and PCO. This coordination, however, was inconsistent.

Under the new regime, IRMO’s responsibilities for the reconstruction program included “strategic planning, prioritizing requirements, monitoring spending, and coordinating with the military 

commander.”272 “The ministry advisors...essentially had the responsibility for looking at the program and prioritizing where the dollars 

went.”273 This was an important shift.

 PMO had played a paramount role in providing program 

requirements, which is not typical for an executing entity. With the 

transition, PCO took on a more traditional program management 

role, executing priorities outlined by IRMO and others.274But the 

legacy of PMO resulted in some jurisdictional tension between PCO 

and IRMO. 

PCO maintained responsibility for approximately $13.4 billion 

of the $18.4 billion, and the Army provided oversight of the PCO.275

PCO also oversaw the program’s financial management system used 

to prepare the quarterly Section 2207 Report (a former responsibility 

of PMO). But PCO did not oversee other executing agencies.276

Other changes included the creation of the Joint Contracting 

Command–Iraq (JCC-I) on November 12, 2004, through FRAGO 

09-668. This office was established because of the plethora of DoD 

offices involved in contract administration. JCC-I aimed at streamlining contracting procedures and processes.277 PCO and JCC-I leadership decided to have GRD perform contract administration support 

of awarded task orders.278 Although this arrangement began in 

spring/summer 2004, GRD and JCC-I did not sign a formal MOU 

until July 21, 2005.279

One reason for this delegation was GRD’s field presence. JCC-I 

was located principally in Baghdad, but GRD has offices in north, 
84 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

central, and southern Iraq. Because of this decentralization, GRD 

staff members could see the results on the ground and better 

respond to contractor needs and questions.280 JCC-I, GRD, and 

PCO created a matrix that delineated GRD and PCO’s responsibilities. Before contract definitization, most contract actions were the 

responsibility of the PCO. After definitization, most contract actions 

were the responsibility of GRD.281

In March 2005, PCO submitted a plan to merge with GRD. Preparations for this merger continued during the remainder of 2005, 

and the consolidation took place on December 4, 2005. The change 

recognized the increased number of projects moving into phases in 

the USACE area of expertise—from construction management to 

closeout.282 On October 14, 2006, PCO’s office in Iraq closed, leaving 

GRD responsible for overseeing the completion of its portion of the 

IRRF 2 construction program (the remaining $13.4 billion).

Effects of Organizational Shifts

These large organizational shifts were accomplished to improve 

interagency and intra-agency coordination. A USACE manager 

noted that one of the few times when the project management 

business process truly worked was when the program managers, 

field managers, and financial staff were all in the same office and 

could talk as issues arose.283 Beginning in the summer of 2004, PCO 

and USAID directors met every morning to improve communication, assign new work to the entity that could best and most rapidly 

execute it, and improve the inconsistent relationship that had existed 

between PMO and USAID.284 

The creation of these new offices, such as IRMO, PCO, and GRD, 

also created confusion about jurisdiction. Although IRMO selected 

projects and provided money, a former head of PCO believed that he 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 85

was not obligated to report to the IRMO director, but rather, to three 

other people: the military commander, the Secretary of the Army, 

and the Chief of Mission. The Chief of Mission would work with 

IRMO to determine programs, but ultimately these programs were 

approved by the Chief of Mission.285 

USACE, which managed many of the projects, did not report to 

IRMO, and JCC-I, which assigned many of the contracting officers, 

did not report to IRMO or PCO. The many layers of management, 

including the program management contractors, made it difficult 

to determine who had ultimate authority over money, people, and 

projects. One former IRMO advisor recognized that the complicated 

management structure truly increased the importance of personal 

relationships.286

An April 2005 DoS draft assessment of the electricity sector highlighted this complicated management structure:

There are two project management organizations, the [PCO] and 

USAID. PCO has hired Parsons as their owner-engineer to design 

and manage projects. USAID uses Bechtel as both project manager 

and primary contractor. IRMO Electric office decides on projects to 

be completed and assigns them to PCO and USAID to be executed. 

An example of this complex relationship is the Doura Steam plant 

rehabilitation of units 5 and 6. The [Ministry of Electricity] is the 

project manager. Bechtel is the prime contractor for USAID and 

subcontracts to Siemens and Emerson for generator and controls 

work. Siemens, under a UNDP contract, is subcontracting to Babcock 

for boiler work. The [Ministry of Electricity] is accountable for the 

The many layers of management,

including the program management 

contractors, made it difficult to 

determine who had ultimate authority

over money, people, and projects.
86 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

remainder of the plant work. Each contractor manages within [its] 

own scope but lack[s] accountability for the success of systems that 

cut across individual contractor scope. When one contractor at Doura 

was asked who is accountable for all the pieces fitting together, 

he said he was only accountable to doing his part. The [Ministry of 

Electricity] is ultimately accountable for project success, but they do 

not have project management skills and they do not seem to want to 

accept responsibility for success. A better approach is to have one 

experienced design and project manager over the entire job that can 

integrate and direct all subcontractor work.287

The Reconstruction Program’s Realignment

When the U.S. Mission-Iraq took over from CPA, the overall Iraq 

reconstruction program faced the challenge of the third significant 

leadership change within 18 months. And with this shift came a 

comprehensive review of the overall reconstruction program. This 

review resulted in an extensive realignment of priorities, and a series 

of reprogrammings that entailed a greater focus on security, economic development, and democracy building. 

Two other realignments took place—one in the fall of 2004 and 

another in the spring of 2005. These three realignments profoundly 

affected the shape and the execution of the reconstruction program. 

They also aggravated the already difficult operating environment 

for the reconstruction program managers, who found it difficult to 

implement projects in an atmosphere of continuously shifting 

priorities.

The first review examined the original IRRF 2 spend plan and 

the current status of the program, identified and pulled together the 

priorities and needs of the various stakeholders (including other 

donors), and developed a new plan based on these changing priorities.288 One aim of this effort was to shift money from planned 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 87

projects (that were not scheduled to begin until mid-to-late 2005) to 

high-impact projects.289

Realigning the reconstruction program was done in partnership 

with all U.S. government implementing agencies and the IIG:290

[The new General and Ambassador] had established a partnership 

before they came out there. They were in agreement that the focus of 

the program was going to be on security, democracy, and economic 

growth. 

In the realignment process...the MNF-I put [in]...a bid for funds and 

then MNSTC-I came in with their bid for funds. The senior advisors 

each got a vote in terms of their bid for funds. The PCO had a vote in 

terms of holding on to its funds....And USAID had an opportunity to 

bid on funds, and all of us had an opportunity to say how we thought 

the program ought to be running.

Everybody got a chance to bid and everybody got their thoughts 

on the table. That was the interagency process that had essentially 

never taken place up until then...

It gave us a chance to get in on the policy end of it. Win or lose, you 

got to speak your piece. You got to assist in the process of making 

policy, and then when the assignments were handed out, we had 

very clear lanes of implementation. We knew what it was we were 

supposed to do.

These three realignments profoundly 

affected the execution of the 

reconstruction program...

managers found it difficult to 

implement projects in an atmosphere 

of continuously shifting priorities.
88 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

But I think that there was a substantial change at that point and the 

whole process was much more transparent, and there was much better cooperation between the executing agencies.291

In September of 2004, the Congress approved the realignment 

of $3.46 billion of IRRF 2 among various sectors with a focus on 

“improving security, increasing Iraqi employment, and supporting 

the democratic transition in Iraq.”292 Funds for economic reform, 

private sector development, and agriculture increased by $380 million; democracy programs received $180 million; and jobs programs 

received $286 million. The security sector received an additional 

$1.8 billion, with the majority of it allocated for training and equipping Iraqi security forces.293

 Most of the money for these reallocations came from the water and electricity sectors because these sectors originally received the most funds and the majority of projects 

in these sectors were not scheduled to begin until mid-2005.294 The 

water sector’s budget was cut by nearly half.

Ongoing Realignments

The second realignment in the fall of 2004 moved some money back 

into the electricity sector to support the restoration of essential services in those areas most directly affected by the insurgency.295

A further realignment in spring 2005 focused on sustainability 

and capacity development; $607 million was allocated for a “management program (including operations and maintenance for the 

electricity and water sectors).”296 The April 2005 Section 2207 Report

presented the rationale behind this shift:

(1) the original estimate of the damage done to the basic infrastructure from decades of neglect and warfare was significantly underestimated; as a result, more time and resources are required to stand-up 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 89

and maintain systems than originally thought; and (2) the limited 

capacity of the Iraqi government to provide their own resources for 

near-term reconstruction.297

Between October 1, 2005, and December 31, 2005, an additional 

$253.3 million was realigned within and among sectors.298 Money 

was moved out of several infrastructure sectors, including electricity, health care, transportation, and water, and into non-construction sectors such as the justice, public safety infrastructure, and civil 

society sector as well as the education, refugees, and human rights 

sector.299

The following list illustrates the types of projects that lost more 

than $10 million because of the realignments:

• a transmission project

• Umm Qasr to Basrah water pipeline and sewage treatment plant

• a civil aviation project

• a potable water project

• nationwide hospital and clinic improvements300

As of January 2006, strategy changes had resulted in more than $5 

billion in realignments and reallocations: $3.46 billion in September 

2004 and an additional $2.128 billion thereafter.301 See Figure 3.

Although the realignments were consistent with evolving policy, 

the continuous reviews of the program caused frustration among 

some program managers,302 specifically regarding the drag that 

reprogrammings effected upon program momentum. A PCO official 

observed that “there needed to come a time when we stopped talking, stopped analyzing, and just executed the program.”303 “The 

impact of incremental reprogramming [had] a significant detrimental effect on the momentum of program execution... (it slows the 

pace) and consequently [resulted] in increased overhead costs.”304
90 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

The realignments unfolded within an environment of regular 

change among U.S. and Iraqi leadership. A former PCO Director 

of Programs noted that, although the ministries and advisors could 

articulate their needs at any given time, the turnover in leadership 

positions (three Iraqi governments in three years) made institutional 

progress difficult.305

Impact of Realignments

Funding and Project Delays

The realignment process caused funding delays that challenged 

program management and contracting officials. During the fourth 

quarter, FY 2004 (July-September 2004), all funding for the designbuild program, except for the security and justice sector, was frozen, 

pending the completion of the Mission’s review and re-prioritization of reconstruction plans.306 These funds were not released until 

the end of September 2004, which delayed the issuance of task 

orders and prevented work from starting.307 “We lost 60 to 90 days 

of construction because we didn’t have the money from the fourth 

quarter.”308

It was the uncertainty of funding or [finding out] that funding will be 

pulled away because the strategy has changed, and suddenly there’s 

a new priority. That’s very difficult because when you’ve got contractors mobilized and suddenly you have no money, you’ve [got to] start 

sending them home.309

Delays caused during the April 2005 realignment directly affected 

the electricity and water sectors. Funds were withheld and then 

reinstated six months later, “causing delays in awarding task orders 

and contracts. The delay increased the burden on the program management and contracting teams in Iraq to develop project scopes of 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 91

work, to make the necessary awards, and to obligate funds before the 

expiration of the IRRF 2 on September 30, 2006.”310

Effect on Ongoing Projects

The realignments also impacted ongoing projects. For example, a 

budget cut resulted in the cancellation of a water distribution system 

project that would have connected to the Erbil/Ifraz wastewater 

treatment plant (WTP).311 In the public works and water sector, 

“lack of funding for three and a half months resulted in actual Iraqi 

employment lagging original projection.”312

Effects of the reprogrammings included the cancellation of six 

transmission projects, eight primary healthcare centers, three large 

water treatment projects, and a reduction in scope of a project to 

renovate a water channel.313

Other projects received additional funds during these realignments. For instance, the rule-of-law program received an additional 

$53.6 million, democracy building received $38.5 million, and ministerial capacity building received $20 million.314 
92 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

NOV 03 MAR 04 JUL 04 NOV 04 MAR 05 JUL 05 NOV 05 MAR 06

$5,000

$6,000

$4,000

$3,000

$2,000

$1,000

0

Amount ($ Millions)

ELEC TRICIT Y

WATER RESOURCES AND SANITATION

SECURIT Y AND LAW ENFORCEMENT

JUSTICE, PUBLIC SAFET Y INFRASTRUC TURE, AND CIVIL SOCIET Y

PRIVATE SEC TOR DEVELOPMENT

Significant Realignments 2004-2006

Figure 3

Sources: Section 2207 Reports, January 2004-July 2006 (online at: http://www.state.gov/p/nea/rls/rpt/2207/, 

accessed November 15, 2006).
Sector

MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 93

Original 

Allocation 

November 6, 

2003

Allocation 

January 

2004

Allocation 

April 

2004

Allocation 

July 

2004

Allocation 

October 

2004

Allocation 

January 

2005

Allocation 

April 

2005

Allocation 

July 

2005

Allocation 

October 

2005

Allocation 

January 

2006

Allocation 

April 

2006

Allocation 

July 

2006

Security and Law Enforcement 3,243 3,243 3,243 3,235 5,045 5,045 5,036 5,017.6 5,017.6 5,036 5,036 5,036Justice, Public Safety Infrastructure, and Civil Society

1,318 1,476 1,489 1,484 1,953 1,953 2,130 2,188.5 2,242.5 2,349.8 2,354.7 2,326.9

Electricity 5,560 5,560 5,539 5,465 4,350 4,369 4,308 4,318.5 4,309.8 4,220 4,220 4,220

Oil 1,890 1,701 1,701 1,701 1,701 1,701 1,723 1,723 1,723 1,735.6 1,724.7 1,724Water Resources and Sanitation 4,332 4,332 4,148 4,247 2,311 2,279 2,157 146 2,146.6 2,131.1 2,131 2,131Transportation and Telecommunications 500 500 500 500 500 513 509 508.4 508.5 465.5 469.1 469.1

Roads, Bridges, and Construction 370 370 370 368 360 360 355 334 333.7 333.7 337.7 337.7Health Care 793 793 793 786 786 786 786 786 789 739 746.3 784.5Private Sector Development 153 184 184 183 843 843 860 840 443 453 805.3 805.3Education, Refugees, Human Rights, and Governance

280 280 259 259 379 379 363 363 363 410 410 410

Table 3Sources: Section 2207 Report, January 2004-July 2006 (online at: http://www.state.gov/p/nea/rls/rpt/2207/, accessed November 15, 2006).

IRRF 2 Quarterly Reallocations by Sector ($ millions)November 2003 ­‐ July 2006
94 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Management of DFI Funds

After the transition from CPA, IIG took over the management and 

control of DFI funds. But IIG was not prepared to administer and 

manage CPA contracts.315 Thus, on June 15, 2004, the Iraqi Ministry 

of Finance gave the PMO director the responsibility to manage and 

“facilitate disbursements for contracts signed by the former CPA, 

requiring payment subsequent to June 28, 2004.”316 The Minister of 

Finance stated that this responsibility would transfer to “the Chief 

of Mission of the United States Embassy and the Commander of the 

Multi-National Force-Iraq on June 30, 2004.”317

But immediately after the transition, no single U.S. agency had 

responsibility for the administration of DFI contracts. KPMG noted 

that, as of December 2004, PCO, USACE, Coalition forces, DoD, 

DoS, and Treasury were separately “performing budgeting, project 

management, contract administration, legal accounting, finance, and 

inspector general functions” of DFI contracts.318 JCC-I later became 

appointed as the responsible party for administering these DFI 

contracts.

As late as April 2005, U.S. agencies did not have complete 

accounting records of DFI contracts, nor did they have details of 

the procedures, policies, and controls necessary to effectively document and monitor DFI projects. This problem was cited in various 

audits spanning late-2004 to mid-2005. In an April 2005 audit, 

SIGIR noted that PCO and the Joint Area Support Group-Central 

(JASG-C) Comptroller could not accurately identify the current 

value of obligations, payments, and unpaid obligations for DFI contracts.319 SIGIR made 40 recommendations to the JASG-C, JCC-I, 

and the U.S. Ambassador. 

In April 2006, SIGIR found that each organization had implemented the majority of the recommendations, although some were 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 95

still in the process.320 However, a January 2007 SIGIR audit found 

that the U.S. government spent $1.4 million on audit services and 

equipment, but “DFI accountability has only slightly improved, and 

seven recommendations directed to the Joint Area Support GroupCentral remain open.”321

The transfer of DFI contract administration continues to be a 

challenge. A KPMG audit that examined DFI funds through June 

2005 stated that, although the United States had a committee to 

manage the handover of DFI-funded contracts,322 it did not have a 

comprehensive strategy.323 An audit conducted by Ernst and Young, 

which examined DFI funds from June 2005 to December 2005, 

reaffirmed many of KPMG’s findings, stating “the U.S. agencies did 

not maintain a complete and accurate database of outstanding contractual commitments for contracts signed by the former CPA.”324

Shift in Management Approach for 

Infrastructure Projects

In July 2004, the U.S. Mission, PCO leadership, and U.S. military 

commanders focused on starting construction projects. One former PCO official stated: “If we don’t move projects forward, we will 

just churn money—whether it is right or wrong, we just need to do 

something.”325 At this time, the design-build contractors were in 

place, but only 200 construction projects had actually started.326 Of 

more than $11 billion of IRRF funds that had been apportioned,327

only $366 million had been disbursed.328 Between August and 

December 2004, the pace of the program quickened: PCO construction starts grew by 91%, from 610 to 1167, and disbursements nearly 

doubled.329

Design-build contractors were hired partly because the U.S. 

government is not structured to have sufficient personnel to man-
96 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

age and execute large-scale infrastructure projects. The design-build 

contractors possessed organic management expertise and were 

charged with overseeing U.S., Iraqi, and third-country subcontractors. SIGIR audits have documented shortfalls in these areas by some 

contractors. 

The design-build contractors were also rewarded for their use of 

Iraqi subcontractors. As a result, much of the actual construction 

work was completed by local and regional firms, creating multiple 

layers of contractors for each project. 

The construction of one of Bechtel’s projects, the Basrah Children’s Hospital, illustrates the layered structure typical of designbuild contractors in Iraq. USAID issued a job order to Bechtel, 

which in turn hired a consortium of three contractors to design and 

build the hospital. These subcontractors hired additional local subcontractors and laborers to complete the work and were responsible 

for providing on-site project management and supervision. In this 

one instance, there were at least four layers of management, and each 

relied on the next to provide appropriate oversight. Iraqi subcontractors performed about 75% of Bechtel’s work in Iraq.330

The use of multiple layers of subcontractors, especially for construction projects, is not uncommon and can be quite effective.331

However, in Iraq, managing the subcontractors proved difficult for 

many of the design-build contractors. Many of the Iraqi contractors 

did not have sophisticated management systems; some had none. 

Moreover, the Iraqi subcontractors had to be trained in everything 

from safety and procurement policies to quality assurance.332

One contractor waived insurance requirements for some Iraqi 

firms and helped others obtain operating funds.333 Some local contractors did not understand U.S. government rules, regulations, and 

expectations. For example, the U.S. government expects that items 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 97

purchased will be new, even if this is not stipulated in a contract. 

Some Iraqi vendors provided used items in original packaging.334

Some of the delays for infrastructure projects were caused by the 

failure of Iraqi subcontractors to understand and conform to international standards.335 

As the security situation devolved, the design-build contractors relied more heavily on local subcontractors to complete work. 

Bechtel and others moved many of their full-time staff to Amman, 

Jordan, where managers continued to provide oversight remotely.336

In some cases, as a number of SIGIR inspections and audits have 

shown, this oversight proved too limited to ensure proper project 

completion. 

Iraqi-led Construction

In summer 2004, PCO and IRMO leadership decided to expand 

the strategy for infrastructure reconstruction beyond the prime 

design-build contractors. Program managers “needed any and all 

ways of showing progress.”337 The new plan was to hire local firms to 

construct smaller projects in addition to, or instead of, the designbuild contractors.338 To do this, a management team “established a 

portfolio of lower-risk projects to contract in the open market.”339

They decided to start with a roads project in Diyala and extend the 

initiative based on the results of this project. 

The use of multiple layers of 

subcontractors, especially for 

construction projects, is not 

uncommon and can be quite effective. 

However, in Iraq, managing the 

subcontractors proved difficult for many 

of the design-build contractors.
98 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Increasing the number of contractors involved in the IRRF 2 

program posed a challenge for PCO program managers. Managers 

needed to assess the risks and trade-offs associated with managing 

more local firms. Although design-build contractors were responsible for managing their subcontractors, whether they were from 

Iraq, the United States, or a third country, hiring more Iraqi firms 

directly required the government to take “on the risk of overseeing 

many more contractors in terms of execution and contract administration”340

 without a fully staffed organization. 

As of October 2005, upwards of 25% of the total dollar value of 

IRRF 2 construction projects had gone to Iraqi firms, either as direct 

contracts or through design-build contractors. GRD-PCO noted 

that it continued to increase this percentage.341

...the proportion of construction projects and dollars awarded to 

Iraqi firms either as direct contracts or subcontracts continued to 

expand. Most direct contracts—in terms of projects—were awarded 

in the [following sectors: facilities and transportation; communication; and electricity].342

Iraqi-led Management: An Example

Despite the challenges project managers faced overseeing Iraqi 

contractors, the shift proved to be beneficial in some areas, especially 

in the railway sub-sector. Local subcontractors who had experience 

working on railroads were hired to complete the work. PCO hired 

three experienced local engineers to oversee the contractors’ work. 

And the Iraqi Republic Railway Commission (IRRC), which drove 

many of the priorities, had a clear understanding of the railroad 

system and knew what was required to complete the job. The team 

was able to communicate and prioritize, given a finite amount of 

resources, and stay focused so they could accomplish the task.343
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 99

There were challenges associated with executing projects in this 

sub-sector, including construction delays and managing costs and 

security risks. But PCO managers felt the team worked well together. 

In addition, the IRRC had a straightforward goal: fix the stations, fix 

the tracks, and fix the communication system. The team focused on 

basic, standard, railway construction. They did not attempt to use 

the newest technology. They looked to the simplest solution instead 

of the best technology to complete the job,344 something not all 

teams in Iraq did.

Community Ownership

Some contractors worked with community groups to complete 

smaller-scale infrastructure projects. For example, a community 

group applied for a USAID-funded grant and worked with an Iraqi 

engineer to hire a local contractor to oversee construction. After the 

community group accepted the work, payments were made to local 

contractors. Grants managers were based throughout the country to 

oversee the projects. Projects often took longer to complete, but the 

community took ownership of the process.345

Several USAID and DoD officials told SIGIR that it was important to engage local citizens and contractors earlier in a reconstruction effort, especially on community-based infrastructure projects.346 

However, officials also noted the importance of selecting and coordinating these efforts with larger-scale infrastructure projects. USAID 

noted: “It may be useful to use local firms to construct or rehabilitate 

small projects like water or sewer pumping stations. However, without a source of treated water from rehabilitated sewage treatment 

facilities, the utility of the smaller projects will not be realized.”347
100 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Regional Management

PMO started out with a centralized focus as it set up its operations 

and initiated its projects. However, PMO planned to move project 

managers into the field as more projects started. As part of the transition plan, PMO put together a strategy for regional teams to work 

in each of the 18 governorates to gather local priorities and communicate these to the central office in Baghdad.348 These teams would 

coordinate with local leaders and military commanders on construction projects. Further, these teams would take over the regional 

presence that CPA had established during its tenure. As part of the 

transition from CPA to the IIG, several regional CPA offices closed.

PMO recognized that it would be valuable to move project managers into the regions to align reconstruction efforts with regional 

priorities and the U.S. military. PCO, however, had limited success349

in implementing PMO’s plan. Initially, DoS did not support this 

proposal, primarily because of security concerns.350 And PCO did 

not have enough staff to fill these slots. 

One regional program manager expressed concern over the lack 

of human resources in the field:

A strong and visible PCO presence at all levels of reconstruction is 

needed to ensure the success of IRRF. In order to fully support the 

interests of all Coalition members, the Iraqi people and the military 

ground commanders, PCO must deliver the necessary people and 

resources to adequately lead and manage the reconstruction effort. 

The greatest contributing factor to PCO’s slow start and limited credibility with the MSCs, State Department, and local Iraqis has been 

the inadequate presence of PCO personnel in the field. Not committing qualified and capable personnel will only further exacerbate our 

difficulties.351
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 101

Regional Management: An Example

In April 2004, PMO created AIRP, funded by DFI, to initiate projects 

that could be “quickly implemented to improve the daily lives of the 

Iraqi people, by creating jobs and providing additional security.”352

These projects were to be high-impact and focus on infrastructure, 

including bridges and roads. Work was to be carried out in coordination with local councils, the military, and various ministries.353

Although all of the AIRP projects had been contracted by the end of 

June 2004, many still had not yet begun. 

After the dissolution of CPA, many of the staff responsible for 

implementing AIRP projects concluded their term. One program 

manager replaced a regional team of seven or eight people. He was 

tasked with the management of a $50 million AIRP program with 

136 projects, ranging from $18,000 to $4 million. To assist him, he 

had one Iraqi engineer. Together, they faced several challenges.

First, they operated exclusively with cash. The local military 

commander assigned an Army captain to act as the pay agent for 

the reconstruction program. When cash was needed, he would fly to 

Baghdad, fill a duffle bag with cash, and bring it back.354 Because of 

the inconsistent cash controls earlier in the effort, this team decided 

it was necessary to keep as much cash on hand as possible so they 

could pay vendors and contractors reliably. At one point, the team 

had $23 million in cash in storage.355 By the spring of 2005, more 

stringent cash controls were put in place.

Second, the region lacked continuity in contracting and financial 

management staff associated with this program. Over one year, there 

were about five contracting officers and five finance officers.356 The 

main office in Baghdad provided little support or guidance on processes and procedures.357 The team thus created their own.
102 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Although faced with enormous execution challenges, this AIRP 

program completed about 80% of its projects between May 2004 

and June 2005. After July 2004, none of the projects were canceled 

or de-scoped. This success is directly attributable to the cooperation 

of Iraqi engineers, the local Iraqi government, and the U.S. military. 

Well-trained local engineers were hired and priority was given to 

local contractors—not just Iraqi, but members of the dominant tribe, 

which reduced security problems. 

The program management team put in safeguards against corruption and established oversight processes and procedures. To reduce 

corruption, they put up signs in local areas to increase public awareness of the projects. Before the program manager made a payment, 

contractors submitted an approved invoice that included pictures 

(digital cameras were provided to the engineers). The engineers 

and the relevant ministry and/or the local council reviewed and 

approved each invoice. In late July 2004, the management team also 

created a Project Quality Review Board to give Iraqis ownership of 

the reconstruction efforts in their region.358

Controlling Progress and Performance of Projects: 

Measuring Performance

After the transition, IRMO, PCO, and USAID each put a concerted 

effort into the development of a more formal metrics framework. 

For example, PCO’s framework, a draft of which was completed on 

September 30, 2004, comprised four main categories: 

• output/outcome 

• project and financial performance 

• special contract requirements 

• capacity-building metrics359
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 103

PCO’s sector program managers were responsible for gathering and monitoring data for all projects based on this framework. 

This information fed into PCO’s monthly reports. PCO also initiated regular review meetings to monitor high-impact, high-dollar 

projects in each of the main sectors. These reviews focused on three 

key performance indicators—scope, cost, and schedule. During 

these meetings, contracting officers and program managers reviewed 

progress and discussed concerns. The overarching goal was to identify projects that would not be delivered on budget and to develop 

alternatives.360

Although PCO’s analytical framework applied to all projects, initial high-level reviews were conducted only of major task orders. A 

USAAA audit identified a need to monitor all projects, at all levels, 

regardless of size, complexity, or importance.361

Insufficient and ineffective management, monitoring, and communication between contractors and the U.S. government sometimes led to delayed construction, cost overruns, and an unclear 

understanding of projects started and completed. For example, 

an earlier identification of potential problems associated with the 

management of the primary healthcare facilities could have led to 

remedial actions that would have allowed for the completion of these 

buildings. Rather, corrective actions were not taken until July 2005, 

more than a year after the task orders were awarded, and, as a result, 

the vast majority of the clinics in the program were not completed.362

The late focus on metrics made it difficult to coordinate information across agencies. In particular, the lack of consistent definitions, 

assumptions, and common metrics across agencies working on similar projects caused “a potential for misunderstanding by USAID/

Washington and other interested users.”363
104 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

The rehabilitation of schools throughout Iraq provides an illustrative example. GRD-PCO, USAID, and USAID’s contractors each 

used a different definition of a rehabilitated school. For reporting 

purposes, USAID’s definition was “schools for which rehabilitation 

work was started but not necessarily completed.” USAID’s contractor, however, considered a school rehabilitated when “all the work 

was performed and inspected, and the final payment made.”364 This 

difference led to a report stating that 144 more schools had been finished than were actually completed. GRD-PCO’s program aimed to 

“refurbish existing facilities to bring them up to an acceptable level, 

which would be conducive to a good learning environment.”365

The tardy focus on metrics limited the USG’s ability to assess the 

impact of certain projects. A July 2006 audit of USAID’s Local Governance program found that it “could not determine if USAID/Iraq’s 

local governance activities achieved their intended outputs because 

USAID/Iraq did not require [the contractor] to submit all reporting 

and monitoring documents specified in the contract.”366

Measuring the performance, progress, and impact of Iraq reconstruction projects continues to be difficult because of limited performance data.367

 In February 2006, GAO testified before the Congress 

that, while broad goals have been established and some progress 

has been made, “limited performance data and measures make it 

difficult to determine and report on the progress and impact of U.S. 

reconstruction.”368 In February 2006, DoS was still “finalizing a set of 

metrics to track the impact of the reconstruction efforts.”369
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 105

Controlling Progress and Performance 

of Projects: Cost Control

The security situation limited the ability of managers to manage cost 

effectively. Initial security estimates were included in the vast majority—if not all—of the contracts. Many IRRF 2 projects estimated 

between 7-10% for security; however, this amount increased as the 

security situation worsened.370 A Congressional Research Service 

report found that 10-25% of reconstruction costs went to personnel 

protection, “draining funds from the purposes for which they were 

intended.”371 GAO reported that under Task Force RIO, security 

costs for one contractor were 18%, while costs for another contractor 

were 14.3%.372 More recent reports, including a January 2007 SIGIR 

fact sheet, conclude that security costs for design-build contractors 

ranged from 7.6% to 16.7%.373

But the deteriorating security situation was just one reason why 

it was difficult to manage costs. PCO, USAID, and IRMO did not 

always have an appropriate grasp of the actual costs of many of 

the reconstruction projects. This problem persisted well into 2006, 

despite steps taken after the transition in June 2004 to determine 

cost-to-complete estimates, develop a comprehensive cost management plan, and improve the definitization process.

Cost To Complete

P.L. 108-106, passed in November 2003, required CPA/OMB to 

report quarterly on the progress of all projects under each of the ten 

sectors and provide cost-to-complete estimates. (This responsibilPCO, USAID, and IRMO did not 

always have an appropriate grasp 

of the actual costs of many of the 

reconstruction projects.
106 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

ity was later transferred to DoS.) Cost-to-complete estimates are 

determined by:

• progress toward contract completion to date

• cost of the contract work completed to date

• reasons for variances from initial estimates374

Estimates are then developed based on the amount of work remaining to be completed and the cost of that work.375

Agencies that received funds from IRRF 2 had to track costto-complete information separately, and submit reports quarterly. 

Project and cost information was then combined and submitted to 

the Section 2207 Report. But agencies did not immediately comply 

with this requirement. 

GRD-PCO produced its first monthly cost-to-complete report 

in June 2005. GRD-PCO, USAID, and the Multi-National Security 

Transition Command-Iraq (MNSTC-I) first submitted a cost-tocomplete report to IRMO in September 2005, although the original 

report was due in January 2004. Reasons for the 21-month delay 

included the lack of unified guidance regarding the cost-to-complete 

method and inadequate information management systems.376

Unclear Guidance

A January 2006 SIGIR audit found that although GRD-PCO, 

USAID, and MNSTC-I started to produce cost to complete estimates 

during fall 2005, the estimates were burdened by errors. A significant 

reason for this was because the legislation did not provide adequate 

guidance on how to complete these estimates, and IRMO did not 

provide formal written guidance to these agencies.377 The audit also 

found that the agencies did not have strong internal controls and 

processes to determine cost-to-complete estimates. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 107

For example, in July 2005, GRD-PCO issued a summary outlining 

its methodology for determining cost to complete; however, it did 

not widely disseminate this summary across PCO’s sectors, which 

meant that each sector developed different approaches to determining cost-to-complete estimates.378 In December 2005, MNSTC-I 

developed procedures for construction projects, but not nonconstruction projects. This policy, however, did not include a 

provision for projecting future costs, which would have aided in 

determining the total cost of a project.379 In February 2007, USAID 

presented IRMO with its formal cost-to-complete policies.380

Inadequate Financial Management Systems

PCO planned to develop an integrated program and financial 

information system, but PCO did not complete this system until 

the spring of 2005,381 and it was not fully integrated and operational 

until the summer of 2005.382 Integrating systems was one of PCO’s 

greatest challenges. An October 2005 SIGIR audit made these 

observations:

PCO management has experienced difficulties integrating financial 

and program management data across its management information 

systems infrastructure...The inability to share data has negatively 

impacted PCO’s ability to link the financial information in CEFMS to 

program information. Consequently, it is difficult for project management to prepare cost-to-complete estimates.383

USAID’s existing system was not set up to handle requests generated from P.L. 108-106, and it could not support requests from 

PMO and later IRMO. USAID normally tracks its funds by strategic objective; however, IRRF 2 legislation required USAID to track 

costs by the sectors and sub-sectors described in the IRRF 2 spend 
108 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

plan. Initially, USAID created off-line reports by hand, which led 

to misunderstanding and disagreement about numbers because of 

different interpretations and data-entry errors. In the spring of 2005, 

USAID completed a web-based system to track disbursements and 

obligations by sector and sub-sector. This greatly facilitated reporting.384 USAID staff recommended creating a standing set of funding 

categories and reporting requirements that could be used across 

agencies for future interagency contingency operations.385

PCO’s Comprehensive Cost-management Plan

Recognizing the need for a more effective way to measure costs, 

PCO leadership developed a comprehensive cost-management 

plan, which received final approval in March 2005. The document 

emphasized managing administrative overhead costs of design-build 

contractors. The plan relied “on a combination of risk-management 

tools, contingency-management tools, and earned-value principles 

[to] gauge the effectiveness of individual sectors as they execute their 

respective programs.”386

In April 2005, an assessment team went to Iraq to review the 

financial management of IRRF 2. The team found that, despite 

improvements made to managing costs, there was still no strategic 

approach for handling cost overruns.387 It recommended that weekly 

reviews, “project by project,” be conducted to ensure projects were 

executed “in a manner consistent with current time-to-complete and 

cost-to-complete estimates.”388

But challenges with cost management continued. In January 2006, 

USAAA noted that CEFMS, the financial management system used 

by PCO, still lacked “written guidance describing its financial management system procedures,”389 causing some control weaknesses. In 

response to the USAAA report, GRD-PCO developed a number of 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 109

standard operating procedures and issued guidance that addressed 

and satisfied USAAA’s recommendations. The most recent version 

was completed in September 2006. 

In July 2006, when 70% of IRRF 2 had been expended, cost management continued to be a concern of both USAID and PCO. Several projects continued to report cost overruns, while data for other 

projects were not adequate to conduct a proper trend analysis. In 

periodic reviews of the financial information in the Iraq Reconstruction Management System (IRMS), SIGIR has identified a number of 

data entry errors, reporting irregularities, and inconsistencies. 

SIGIR’s audit of the Basrah Children’s Hospital illustrates the continuing challenges agencies and contractors have had in managing 

costs.390 In November 2003, Congress allocated $50 million in IRRF 

2 funds to build a pediatric facility in Basrah. USAID estimated that 

the original completion date would be December 2005. However, 

contracting delays and problematic program oversight pushed this 

date to July 2007. In its July 2006 audit, SIGIR estimated that the 

hospital would cost an additional $69.5-$89.5 million to construct.391 

Earned Value Management and Improvements 

to Definitization Process

PCO used earned value management392 (EVM) as the primary 

metric to monitor and manage project costs.393 EVM can allow 

for visibility of costs and realistic planning. However, EVM is not 

an effective tool until a project is definitized because the method 

requires an agreed-on completion cost and schedule. EVM’s 

effectiveness was limited because of the complicated definitization 

process and various managers’ different approaches to EVM.

Although program management contractors were required to 

use EVM, no standard approach was prescribed in their contracts. 
110 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Therefore, the contractors in each sector used different methods.394

This limited the ability to have a standard method across PCO 

sectors. 

The Cost Management Plan, approved in March 2005, outlined 

PCO standards for EVM. It clarified responsibilities and definitions 

and established a procedure that could be followed across PCO:

• Design-build contractors were required to execute projects using 

a Work Breakdown Structure.

• Design-build contractors were required to establish a base schedule with financial information. These schedules would be incorporated into the Resident Management System.

• Actual data would be updated and analyzed at least monthly.

• Sector program managers would be responsible for performing 

EVM, using the Primavera software, and maintaining all data and 

records.395

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. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 111

The SIGIR report, Iraq Reconstruction: Lessons in Contracting and 

Procurement, discussed the problems with definitizing task orders 

under the design-build construction contracts—the finalization of 

negotiations between the government and contractors about the 

specific work to be done, costs, and schedules for individual projects. 

These challenges affected PCO’s ability to effectively control the costs 

of specific projects and overall indefinite delivery/indefinite quantity 

(IDIQ) design-build contracts. 

Of note, a July 2006 SIGIR audit stated that the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation 

Supplement do not provide specific direction on the definitization 

of task orders under IDIQ contracts. But contracting officers in Iraq 

felt that they had a “fiduciary responsibility to protect the government, including the timely definitization of task orders under IDIQ 

contracts.”396 The U.S. Army concluded that task orders under IDIQ 

contracts would be considered undefinitized if the terms and conditions were not agreed on before the beginning of a project.

Definitization is extremely important to control the contractors’ 

rate of expenditure, or burn rate. Because the design-build contracts were cost-plus, as soon as contractors mobilized they started 

to incur and charge costs. Definitization enabled PCO managers to 

establish clear expectations about the work that would be performed 

under individual task orders. Such information allowed managers to 

better inform the public and the government about the program and 

provide clear reasoning for adjustments to initial plans.397

During the summer and fall of 2004, PCO took steps to improve 

the definitization process, including creating a single administrative 

task order. This task order covered all administrative costs in IDIQ 

contracts, instead of including overhead as part of each individual 

construction task order. This gave managers a better understand-
112 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

ing of the direct and indirect costs associated with the work of the 

contractors. By segregating costs, PCO could also avoid paying for 

the same indirect costs for two different projects. 

This required contractors to change their accounting and billing 

systems, which they did, but at a cost. This change would have been 

easier if the billing system had been set up this way at the beginning. Instead, it became more complex because it was done after the 

fact. By March 2005, administrative costs for several contracts were 

separated.398

USAID’s Method

Although both USAID’s and PCO’s infrastructure contracts were 

cost-plus contracts, the two agencies used different methods for 

tracking costs. USAID and Bechtel negotiated a fixed fee, including 

overhead and indirect costs, based on the value of work anticipated 

to be awarded to Bechtel.399 Estimates for each project included a 

proportionate share of these costs. For each job order, USAID and 

Bechtel negotiated a rough order of magnitude (ROM), estimating 

direct and indirect costs.400

USAID encouraged Bechtel to implement projects quickly; as a 

result, Bechtel sometimes began construction before the design was 

complete. Bechtel used many401 fixed-price subcontracts for equipment and labor. To measure progress, USAID and Bechtel held 

weekly meetings and completed a trend analysis.402
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 113

Controlling Progress and Performance of Projects: 

Quality Management of Construction Projects

USACE-GRD provided construction management and quality 

assurance (QA) for PCO. USACE also had an interagency agreement with USAID to provide construction management of USAID’s 

infrastructure projects. With PCO, USACE-GRD was responsible 

for design-build task orders with U.S. and foreign firms and direct 

contracts with Iraqis.403 Once task orders were let, GRD staff took 

over the responsibility for the monitoring of the projects’ progress as 

related to the specifications detailed in the contract, in particular the 

contractors’ quality control (QC) plan. 

After the June 2004 transition, a SIGIR audit found that PCO 

issued more than 100 standard operating procedures (SOPs). Of 

these, “42 were related to construction and contracting quality 

management.”404 Of particular significance was the procedure that 

required GRD’s QA representative to maintain daily QA reports. 

SIGIR inspection teams found that, despite these SOPs, GRD’s ability 

to perform adequate QA and construction management varied.

SIGIR inspection teams traveled to various sites throughout Iraq 

to review the progress and quality of construction efforts. In particular, they ensured that results aligned with the contract objectives. 

They determined whether designs were appropriate and whether 

actual construction met these standards, and they assessed the QA 

oversight provided by the U.S. government. These inspection teams 

completed 42 assessments as of April 2006 and found mixed results 

in terms of design, execution, and oversight. In a review of these 

projects, results of twelve were not consistent with the contract’s 

original objectives, eleven were not adequately designed, and eleven 

did not meet the standards of the original design. 
114 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

An example of a well-designed, well-constructed, and wellmanaged project was the Zakho Military Academy in Zakho, Iraq. 

A SIGIR inspection report published in April 2006 cited these 

reasons for the project’s success:

• The project was well designed. The designs were accurate, 

properly sequenced, compatible with “existing and new facilities,” 

and considered local materials and labor.405

• Construction met design standards. Construction was completed with a “high level of workmanship by the contractor.”406

The USACE project engineer and QA representative lived on site 

and were actively engaged in day-to-day activities.407

• QC and QA plans and programs were detailed and effective.

The plan was detailed, and the contractor provided daily QC 

reports. USACE maintained daily progress reports and monitored the contractor’s quality plan.408

USACE failed to provide adequate oversight of other construction projects. For example, at the aviation base building in Kirkuk, 

construction deficiencies were not “identified and corrected before 

sign-off and turnover to the Iraqi Air Force.”409 The oversight of the 

Ninewa Village Roads Segment 3 project had poorly designed plans. 

According to a SIGIR assessment, “there appeared to be limited 

coordination between the GRD-North District and PCO as to who 

had responsibility for design....”410

GRD-North was not aware that the State Commission for Roads 

and Bridges provided designs to the contractors. PCO, however, 

knew of this process.411 On the same project, the QC plan was not 

adequate. “The contractor’s quality control (CQC) plan submitted by 

the contractor consisted of five lines in an email message.”412 It was 

unclear whether it was approved, and the CQC reports are incomplete.413
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 115

In some cases, contractors who were required to submit a QC 

plan did so, but did not follow it. In other instances, contractors 

did not even submit a plan. The government’s QA program can 

mitigate poor construction, and improvements can be made with 

proper oversight. However, the U.S. government did not consistently 

apply QA of reconstruction projects in Iraq. Instead, some border 

posts did not have proper security fences. A teaching hospital’s roof 

leaked, and several police stations’ renovated walls were cracked 

and peeling. Other common deficiencies were found in plumbing, 

electrical, and finishing work associated with new and renovated 

buildings. 

Another issue that affected the quality of some construction 

projects was the disconnect between Iraq’s standard construction 

procedures and internationally accepted guidelines. In the case of 

the Baghdad Police Academy, according to SIGIR reports, an Iraqi 

subcontractor used cement joints to seal wastewater pipes, a practice used by Iraqi construction companies, but not an international 

standard. These cement joints leaked, causing major interior damage 

to the police facilities. Concerns were raised about health hazards 

within the building, because wastewater leaked through floors, 

ran down walls, and filled ceiling lights. In addition, there were 

structural issues with the buildings themselves, including foundation 

cracks, and honeycombing problems in the concrete. As a result of 

the substantial repairs required to fix these problems, some of the 

planned construction for this $72.75 million project was canceled.414

Controlling Progress and Performance of Projects: 

Contract Administration and Documentation

Measuring performance and cost and providing QC are critical 

components of monitoring a project’s progress. The information 
116 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

gathered during these QC reviews often led to adjustments to scope, 

cost, and/or schedule, which then triggered a change to a contract. 

But USAID and PCO did not always make timely, responsive contract modifications, affecting the government’s ability to adequately 

oversee and control contractors.

In USAID’s health sector, an audit by the USAID Office of Inspector General (OIG) found that 60% of the activities “did not achieve 

their intended outputs.”415 The audit found that the contractor did 

not properly manage the contract and that staff in Iraq did not 

always respond to contractor requests in a timely fashion. The audit 

made a recommendation to ameliorate this problem.416

In response, USAID clarified the process for modifying contract SOWs and emphasized the importance of doing so “prior to 

implementation of changes by the contractor and within a reasonable timeframe of notification of the requirement for a change.”417

 A 

2004 USAID OIG audit of the economic reform program found that 

USAID staff in Iraq needed to improve recordkeeping procedures 

and revise their reporting requirements.418 USAID/Iraq staff used 

“an informal recordkeeping system”419 (e-mail correspondence, for 

example). Actions were taken on both of these recommendations.420

However, a 2006 USAID OIG report found similar weaknesses, 

partly “because of the high turnover of the Cognizant Technical 

Officers (CTO).”421

In its infrastructure sector, USAID OIG concluded that “the mission’s management controls related to the infrastructure reconstruction and rehabilitation projects are in need of improvement.”422 As a 

result, USAID OIG recommended that USAID establish procedures 

to ensure that each job order includes an environmental review, a 

specific plan, a process for handling excess charges, and closeout 

procedures.423 A May 24, 2004 letter from the mission director to 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 117

USAID OIG noted that actions had been taken in response to these 

recommendations.424

DoS and PCO-GRD also did not always respond to contract 

requests in a suitable timeframe. Under PCO-GRD, the construction 

of the primary healthcare centers illustrates the importance of diligent contract oversight and proper documentation.425 Poor contract 

administration of a DoS contract “resulted in millions of dollars put 

at unnecessary risk, and property that can not be accounted for that 

was acquired...”426

Contract documentation and data continued to be an issue 

throughout the reconstruction effort. In a review of selected projects, 

SIGIR found that PCO could not provide a task order worth more 

than $2 million and data in IRMS, which utilizes information that is 

stored in CEFMS and other financial and contract systems, was inaccurate for eleven projects surveyed. In another instance, GRD-PCO 

was unable to provide the SOW for a hospital project, and a dataentry error in IRMS misstated the project’s value.427

Controlling Progress and Performance:

Rewarding Performance

In a January 2004 presentation to potential bidders of design-build 

contracts, PMO described the proposed award fees. Contractors 

would receive monthly feedback, but would receive an award-fee 

determination every six months. Sixty percent would be based on 

technical performance, and 40% would be based on management, 

including the use of local subcontractors. A contractor’s base fee 

would be 3%, but each contractor could be eligible for up to an additional 12%, based on performance. 
118 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

To determine these awards, PCO established an Award Fee Evaluation Board and created policies and procedures. However, these 

policies and procedures were not consistently followed. Evaluation 

criteria were subjective, contract files were incomplete, and monthly 

assessments were not regularly performed. A SIGIR audit concluded 

that “the effect of stated evaluation criteria without established definable metrics could result in over-inflated contractor performance 

evaluations.”428 In response, on July 25, 2005, JCC-I published a 

memo outlining the Award Fee Board Policy. The policy highlights 

these important components of the award fee:

• The contractor earns an award fee by performing the work 

requirements as stated in the contract and by excelling in the 

areas specified in the award-fee process—not by doing what the 

program manager or other government personnel may want of 

the contractor on a particular day.

• The contractor begins each evaluation period with 0% of the 

available award fee. Contractors do not begin with 100% of the 

available fee and have deductions withdrawn to arrive at the 

evaluated fee.429

In addition, a JCC-I official told SIGIR that award-fee officials 

had received training, and the award-fee process was monitored 

more closely.430

Managers debated the appropriate amounts of award fees. Some 

argued for more “penalties for poor performance and rewards for 

desired performance.”431 This was especially true for completion 

dates. Missing agreed-on completion dates would cause additional 

costs.432 Balancing the risks assumed by the contractor and the 

government was an additional challenge. The lack of clarity on this 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 119

issue resulted in the government having responsibility for some cost 

increases—not the contractor.433

Closing: Capacity Building and Transfer to Iraqis

Although capacity development was a component of the IRRF 2 

supplemental legislation, PCO did not formally begin to address 

capacity development until late 2004. Two important decisions—first 

to transfer sovereignty to Iraqis on June 30, 2004 and second, to 

move responsibility for the reconstruction program from DoD to 

DoS—disrupted operations and delayed the integration of capacity 

development in the overall program management plan.434

In August 2004, PCO began developing the “Iraq Capacity 

Development PCO Management and Interface Plan,” which the PCO 

Director formally approved in December 2004. This plan outlined a 

five-level approach to capacity development:

• Level One: Policy

• Level Two: Laws and Regulations

• Level Three: Inter-organizational

• Level Four: Iraqi Ministries

• Level Five: Infrastructure

PCO realized that the success of IRRF 2 infrastructure projects 

hinged on the support of the Iraqi government and every U.S. 

agency involved in Iraq reconstruction. Regulations, budgets, 

ministerial systems and processes, and training in operations and 

maintenance were each a necessary and critical component of the 

successful operation of any facility. 

Throughout early 2005, PCO briefed agencies, think tanks, 

congressional staff, and contractors on its five-level framework to 
120 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

improve awareness and gain support.435 Significantly, PCO worked 

with other agencies to develop its capacity framework into the 

“Sustainability Program Transition Plan.” This plan was signed in 

September 2006.

 Within the five levels outlined in PCO’s framework, capacitybuilding efforts in Iraq can be further categorized into three broad 

areas relating to program and project management: 

• Operations and Maintenance: providing technical training and 

ensuring the financing needed to sustain infrastructure projects 

funded by the IRRF 2 and DFI

• Management Skills: strengthening techniques necessary to 

administer programs, such as financial management, contract 

administration, leadership, and program management

• Vendor Base: building the capacity of Iraqi and regional contractors to bid for and manage U.S.-funded contracts

Operations and Maintenance 

USAID was the first entity to focus on providing training to Iraqis 

to ensure the long-term sustainability of infrastructure projects. 

Operations and Maintenance (O&M) was a component of every task 

order awarded for infrastructure work, but processes were initially 

ad hoc. By the summer of 2004, program managers recognized the 

need for a more formal process for training and transferring projects 

to Iraqis.436 This was partially because some of the “initial Bechtel 

projects began to fail because the Iraqis could not operate or maintain them.”437

In the summer of 2003, USAID issued two job orders specifically 

focused on O&M. One worked with the Ministry of Electricity to 

“provide technical, procurement, cost, and schedule assistance in 

planning and preparing for the winter 2003 and spring and fall 2004 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 121

major generating unit overhaul outages to restore existing installed 

generation to reliable operation.”438 The second O&M job order 

provided technical support for the “day-to-day operations and maintenance to improve plant performance.”439 A third O&M-focused 

job order was issued in March of 2004, and was initially assigned “to 

provide a program of in-plant mentoring and training at the grassroots level in the 19 existing Ministry of Electricity power plants 

across Iraq.”440

As stated above, PCO formally began its capacity-development 

program in August 2004, when it initiated the “Iraq Capacity Development PCO Management and Interface Plan.”441 In the fall of 2004, 

PCO awarded a contract that specifically focused on capacity development.442 In December 2004, the PCO director approved the PCO 

plan, which focused on infrastructure O&M. Throughout early 2005, 

PCO took additional steps to improve its capacity-development 

program. These included the establishment of standard operating 

procedures, which were approved in February 2005.443

By May 2005, it became clear that additional efforts would be 

needed to ensure that Iraqis would be able to sustain projects, especially in the electricity and water and sanitation sectors. At this time, 

an interagency group444 formed to focus on these issues. The group 

reported that “a number of critical infrastructure facilities constructed or rehabilitated under U.S. funding have failed, will fail, or 

will operate in sub-optimized conditions following handover to the 

Iraqis.”445 To mitigate anticipated problems, the group recommended 

that support be provided to Iraqis for up to one year, increased from 

90 days, after project transfer.446

Recently, DoS has developed a cost-sharing program with the 

Iraqi government for sustainment of U.S.-funded power plants, a 

portion of which will include O&M capacity building.447 In addition, 
122 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

PCO reports that since July 2005, eight additional interagency working groups, task forces, or committees have been formed to focus on 

capacity-development issues.448

In January 2006, a SIGIR audit outlined concerns about the 

process used to transfer assets to the Iraqis. SIGIR found that the 

processes in place were geared more toward transfer at the local level 

and “do not address the information needs of the Government of 

Iraq and the Iraqi ministries responsible for planning the integration 

and sustainment of completed projects.”449 However, two initiatives 

are underway to mitigate problems highlighted in the audit:

• The Information Technology Working Group focuses on gathering 

all project asset information into a single database.

• The Asset Recognition and Transfer Team Working Group is developing common policies and processes to facilitate the transfer 

of assets to the Iraqi government. (This group merged with the 

Sustainability Working Group and is now called the Asset Recognition, Transfer, and Sustainability Group.)

Management Skills

Initial efforts to provide O&M training to Iraqis revealed an apparently unforeseen need to develop the capacity of Iraqi staff tasked 

with overseeing U.S.-funded reconstruction projects. Many of these 

Iraqis had not been trained in budgeting, managing systems, scheduling repairs, or advanced planning. They also needed leadership, 

direction, and support from managers and ministry staff to ensure 

the sustainment of an integrated program or system of facilities. One 

SIGIR interviewee categorized this need as one for “operations and 

maintenance at the ministerial level.”450

By March 2005, PCO recognized this need and expanded 

capacity-building efforts beyond O&M to include training 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 123

ministerial staff in business systems, human resources, and “other 

administrative functions necessary to the successful operation and 

sustainability of completed infrastructure facilities.”451 PCO modified the sector program management contracts to include increased 

emphasis on ministerial training. 

In its January 2006 Section 2207 Report, DoS announced that it 

had created a new project code for “ministerial capacity” and reallocated funds to support this work. These funds would be used for 

“maximizing the relationship between the Mission’s Senior Consultants and the Ministerial Assistance Teams and the Ministries to 

focus on sustainability as a core mission of the Ministry, supporting 

core skills development training in the areas of operations and maintenance budgeting, and focusing on Asset Recognition and Transfer 

(ART) capabilities.”452 At least three working groups were established 

to build the capacity of the ministries: 

• public-sector working group

• capacity-development working group

• ministerial-assistance-team working group

Vendor Base

The involvement of Iraqi vendors varied at the beginning of the 

reconstruction effort. Although hiring local subcontractors was a 

priority in summer 2003, building the capacity of these firms took 

time. 

Another issue involved women-owned companies. As of June 

2005, only one women-owned Iraqi firm was involved in the reconstruction effort. To encourage greater participation of Iraqi women 

in the reconstruction program, PCO joined with GRD and JCC-I 

to develop a program of networking sessions, training, and general 

marketing to Iraqi businesswomen, in addition to providing incen-
124 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

tives to contractors to hire women-owned firms for subcontracting 

work. As of February 2006, 220 women-owned Iraqi firms were carrying out work under the IRRF 2 reconstruction program.453 

In January 2005, PCO established the Subcontracting Excellence 

and Capacity Development Database, which tracks the number of 

subcontractors hired by the design-build contractors and the number of capacity development activities sponsored by the design-build 

contractors.

Provincial Reconstruction Teams

The Provincial Reconstruction Teams (PRTs) exemplify another shift 

in the way reconstruction projects are implemented and managed. 

PRTs are joint civilian-military bodies focused on coordinating 

reconstruction efforts—related to infrastructure and noninfrastructure—and acting as the primary interface with the U.S. 

government in provinces throughout Iraq. In October 2005, the U.S. 

Embassy-Iraq and Multi-National Force-Iraq (MNF-I) jointly issued 

Cable 4045 establishing the PRTs. In November 2005, PRTs were 

created in Mosul, Kirkuk, and Hilla. To date, ten PRTs are operating 

throughout Iraq. 

DoS’s stated goals for the PRTs are to “develop a transparent and 

sustained capability to govern, promoting increased security and 

rule of law, promoting political and economic development and providing provincial administration necessary to meet the basic needs 

of the population.”454 The PRTs report to the National Coordination 

Team, which works through the U.S. Embassy in Iraq, and receives 

strategy guidance through the Executive Steering Committee. PRTs 

are planned to have staff of up to 100 people, depending on needs 

in the province, who will be provided by the military, DoS, USAID, 

GRD-PCO, and others.455
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 125

Although a similar model is used in Afghanistan, “there is little 

formal doctrine, military or civilian, on PRTs/PRDCs or their function.”456 A recent House Committee on Appropriations report stated 

that:

it will be critical for the chief of mission to provide detailed guidance 

on their functions in Iraq... it should be clear that PRTs—under the 

guidance of the chief of mission—are the agent for the management, 

auditing, and coordination of all U.S. government reconstruction 

funds available in the region, including civilian agency funds and 

military reconstruction funds such as the Commander’s Emergency 

Response Program and the Commanders Humanitarian Relief and 

Reconstruction Program.457

The Committee recommended $622 million in funding for the 

program, of which a portion would be allocated from IRRF 2. However, before spending these funds the Committee required that DoS 

provide:

(1) the formal assessment completed by the U.S. embassy and 

military command in Iraq of the initial performance of the first three 

demonstration PRT projects; (2) a complete program plan, including 

total cost and staffing requirements of the PRTs/PRDCs program in 

Iraq; (3) the official implementing guidance that incorporates the recommendations cited above in this report; and (4) a plan to transition 

PRTs/PRDCs in Iraq by the end of FY 2007.458

On October 23, 2006, DoS submitted this report to the 

Congress.459

An October 2006 SIGIR audit noted that the PRTs face several 

challenges, including security, inadequate resources, and unresolved 

roles and responsibilities, especially regarding civilian and military 

integration.460
126 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

The lessons learned while managing the Iraq reconstruction 

program during the last three years—including the need for sufficient oversight, clear roles and responsibilities, adequate policies and 

systems, and coordination—can and should be applied to this new 

approach for managing Iraq reconstruction. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 127

1. For example, on June 22, 2006, the Deputy Secretary of Defense announced the 

formation of a Task Force to Support Improved DoD Contracting and Stability 

Operations in Iraq. Also, the Department of State’s Office of the Coordinator for 

Reconstruction and Stabilization, as part of its implementation plan, is considering 

the development of a “civilian reserve corps.”

2. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 37).

3. PMI document, “A Guide to the Project Management Body of Knowledge 

(PMBOK® Guide),” 2000 Edition.

4. See SIGIR Lessons Learned Forum, Program and Project Management, 

Washington, D.C., April 12, 2006.

5. See SIGIR Lessons Learned Forum, Program and Project Management, 

Washington, D.C., April 12, 2006.

6. See e.g. Air War College, “Pre-war Planning for Post-war Iraq” (online at http://

www.defenselink.mil/policy/sections/policy_offices/isa/nesa/postwar_iraq.html, 

accessed July 23, 2006); SIGIR report, Iraq Reconstruction: Lessons in Contracting 

and Procurement, July 2006. 

7. Phase IV is a term used by the military to describe those activities that take place 

post-combat. 

8. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 202-203).

9. Senior military planning officer, interview, June 23, 2003.

10. Military planners, especially those associated with Phase IV, were not consistently 

involved in ORHA’s planning efforts. “Unfortunately, a lot of effort was being 

duplicated by the parallel field and Washington teams.” Source: Senior USAID 

official, interview, November 2, 2003.

11. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 33).

12. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 37).

13. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 31-33).

14. Former ORHA official, interview, February 2, 2006.

15. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 64-65).

Endnotes
128 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

16. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 28).

17. See “The Field Operations Guide” (online at http://www.usaid.gov/our_work/

humanitarian_assistance/disaster_assistance/resources/pdf/fog_v4.pdf, accessed 

February 5, 2007).

18. USAID document, “USAID Consultations on Iraq Contingency Planning,” 

February 24, 2003 (online at: http://pdf.dec.org/pdf_docs/PDABY342.pdf, accessed 

June 7, 2006).

19. OTI provides “fast, flexible short-term assistance targeted at key political transition 

and stabilization needs.” (Source: USAID/OTI Staff, written comments to SIGIR, 

March 9, 2006.)

20. DART has a Response Alternative for Technical Services (RATS) program, and OTI 

used staff from its “bullpen;” both groups can be activated quickly to respond to an 

urgent request.

21. At this point, USAID used mostly International Disaster Assistance (IDA) and 

Transition Initiatives (TI) funds.

22. USAID document, “USAID Consultations on Iraq Contingency Planning,” 

February 24, 2003 (online at: http://pdf.dec.org/pdf_docs/PDABY342.pdf, accessed 

June 7, 2006).

23. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 44).

24. Former ORHA staff, interview, February 2, 2006.

25. Sixteen service contracts were issued for subject matter experts, linguists, 

and in support of the Iraqi Free Media Program and Iraqi Reconstruction 

and Development Council. (Source: DoD IG Report, “Contracts Awarded for 

the Coalition Provisional Authority by the Defense Contracting CommandWashington,” March 8, 2003, pp. 4-5.)

26. The Defense Contract Management Agency (DCMA) was not asked to provide 

contract support, including the administration of contracts, until February 27, 2003. 

(See: GAO report, “Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures 

and Management Challenges,” Report 04-605, June 2004.)

27. For more information on LOGCAP, please see SIGIR report, Iraq Reconstruction: 

Lessons in Contracting and Procurement, July 2006.

28. A GAO report found that “there were not always sufficient in-country personnel to 

administer the contracts or task orders when they were initially awarded or issued.”

(See: GAO report, “Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures 

and Management Challenges,” Report 04-605, June 2004.)

29. DoD memo, “Contracting Support for Office of Reconstruction and Humanitarian 

Assistance,” March 29, 2003.

30. Former ORHA official, interview, December 9, 2005; former ORHA official, 

interview, March 15, 2006. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 129

31. Former senior USAID official, interview, November 2, 2005.

32. This sector was eventually dropped. (Source: Former USAID official, interview, 

February 9, 2006.)

33. OMB document, “Testimony of OMB Director,” July 29, 2003.

34. OMB document, “Testimony of OMB Director,” July 29, 2003.

35. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 33).

36. USACE official, written comments to SIGIR, July 27, 2006.

37. Department of Treasury report, “International Assistance Programs: Review of 

Treasury Activities for Iraq Reconstruction,” OIG-06-029, March 23, 2006, pp. 2-3.

38. 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 by authorizing the use of “a 

less than full and open competition process” to meet the pressing needs to prepare 

for potentially significant relief and reconstruction efforts. Between February 

and May 2003, USAID awarded eight major IRRF 1-funded contracts. Although 

Congress did not approve IRRF 1 until mid-April 2003, USAID issued contracts in 

the anticipation of the eventual appropriation. For more information on USAID’s 

contracting process, please refer to SIGIR report, Iraq Reconstruction: Lessons in 

Contracting and Procurement, July 2006.

39. Former USAID contractor, USIP interview, September 8, 2004 (online at: http://

www.usip.org/library/oh/iraq.html, accessed July 23, 2006).

40. Former USAID contractor, interview, June 29, 2006.

41. See USACE document, “Frequently Asked Questions: 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 May 29, 2006) and 

USACE official, interview, June 25, 2003.

42. This contract was signed March 8, 2003. For more information on this contracting 

process, please see SIGIR report, Iraq Reconstruction: Lessons in Contracting and 

Procurement, July 2006.

43. USACE official, interview, June 25, 2003.

44. Former USACE official, interview, October 30, 2006.

45. Former USAID official, interview, November 2, 2005; USACE official, interview, 

June 27, 2004.

46. USAID press release, “USAID Selects Technical Advisors for Iraq Reconstruction 

Programs,” July 3, 2003 (online at: http://www.usaid.gov/press/releases/2003/

pr030703_1.html, accessed July 24, 2006). 

47. USACE official, interview, March 1, 2006.

48. USACE official, interview, March 1, 2006.

49. USACE document, “USACE and the Reconstruction of Iraq,” January 12, 2004, 

slides 11 and 12.
130 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

50. See Public Law 108-11, p. 117 (STAT 573). Until April 2003, USAID and other 

agencies used their own operating budgets to fund initial contracts, grants, 

cooperative agreements, supplies, and purchases, and to pay for other costs 

associated with the planning efforts.

51. See USAID document, “USAID’s Vision for Post-Conflict Iraq,” February 2003 

(online at: http://pdf.dec.org/pdf_docs/PDABY341.pdf, accessed May 12, 2006).

52. See former senior USAID contractor, interview, January 5, 2006; former senior 

USAID official, interview, February 9, 2006.

53. USAID document, “USAID’s Vision for Post-Conflict Iraq,” February 2003 (online 

at: http://pdf.dec.org/pdf_docs/PDABY341.pdf, accessed May 12, 2006).

54. USAID notes that the “lack of accurate pre-war data made it difficult to establish 

goals based on a pre-war baseline.” Source: USAID, written comments to SIGIR, 

February 22, 2007.

55. USAID, written comments to SIGIR, February 22, 2007.

56. Former senior USAID contractor, interview, January 5, 2006.

57. Senior USAID official, written comments to SIGIR, April 11, 2006.

58. USAID contractor, interview, February 22, 2006.

59. Delays in achieving program results were partly due to the deteriorating security 

situation, which became more dangerous in late 2003.

60. Former senior advisor, interview, July 18, 2003.

61. Former ORHA official, interview, March 15, 2006.

62. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 27).

63. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 29). 

64. Former FEST member, interview, July 20, 2003.

65. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 27).

66. Former CPA senior advisor, written comments to SIGIR, January 18, 2006.

67. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 25).

68. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 30-31).

69. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 25).

70. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 25-26).

71. See e.g. USAID official, interview, January 20, 2006; former ORHA official, 

interview, February 2, 2006.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 131

72. See USACE official, interview, March 1, 2006.

73. Congressional Research Service document, “The Coalition Provisional Authority 

(CPA): Origin, Characteristics, and Institutional Authorities,” updated June 5, 2005, 

p. 2.

74. White House letter, President to Paul Bremer, May 9, 2003.

75. DoD memo, “Designation as Administrator of the Coalition Provisional Authority,” 

May 13, 2003.

76. DoD memo, “Authority of the Administrator of the Coalition Provisional Authority 

and Support Relationships,” June 16, 2003.

77. Federal Register, Executive Order 13290—Confiscating and Vesting Certain 

Iraqi Property, Part IV, March 24, 2003 (online at: http://www.treas.gov/offices/

enforcement/ofac/legal/eo/13290.pdf, accessed July 23, 2006). 

78. Former ORHA/CPA official, interview, March 15, 2006.

79. Former ORHA/CPA official, interview, December 7, 2005.

80. Former ORHA/CPA official, interview, March 15, 2006.

81. Former ORHA/CPA official, interview, December 7, 2005.

82. Former ORHA/CPA official, interview, March 23, 2006. 

83. Former ORHA/CPA official, interview, March 23, 2006. 

84. Former ORHA/CPA official, interview, March 15, 2006.

85. Former ORHA official, interview, March 15, 2006.

86. Former ORHA official, interview, March 15, 2006.

87. U.S. Army/Office of CPA document, “Vested Funding Program Release Document,” 

June 2, 2003.

88. Former ORHA/CPA official, interview, December 7, 2005.

89. Former ORHA/CPA official, interview, December 7, 2005.

90. U.S. Army/Office of CPA document, “Vested Funding Program Release Document,” 

June 2, 2003.

91. Former Army officer, interview, December 21, 2005.

92. See USAAA report, “Commander’s Emergency Response Program and Quick 

Response Fund,” A-2005-0173-ALE, May 2, 2005; USAAA report, “Follow up Audit 

of the Commanders’ Emergency Response Program and Quick Response Program,” 

A-2005-0332-ALE, September 20, 2005; SIGIR Report, “Management of the 

Commander’s Emergency Response Program for Fiscal Year 2005,” 

SIGIR-05-025, January 23, 2006; USAAA Report, “Follow up Audit II of the 

Commander’s Emergency Response Program and Quick Response Program,” 

A-2006-0090-ALE, March 31, 2006. 

93. See UN Security Council Resolution 1483, May 22, 2003 (online at: http://

daccessdds.un.org/doc/UNDOC/GEN/N03/368/53/PDF/N0336853.

pdf?OpenElement, accessed May 29, 2006).
132 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

94. UN document, UN Security Council Resolution 1483, May 22, 2003, Section 

13 (online at: http://daccessdds.un.org/doc/UNDOC/GEN/N03/368/53/PDF/

N0336853.pdf?OpenElement, accessed May 29, 2006).

95. SIGIR Report, “Coalition Provisional Authority Comptroller Cash Management 

Controls Over the Development Fund for Iraq,” SIGIR 04-009, July 28, 2004, p. i.

96. SIGIR Report, “Coalition Provisional Authority Comptroller Cash Management 

Controls Over the Development Fund for Iraq,” SIGIR 04-009, July 28, 2004, p. 4.

97. See SIGIR Report, “Oversight of Funds Provided to Iraqi Ministries through the 

National Budget Process,” SIGIR 05-004, January 30, 2005.

98. SIGIR Report, “Coalition Provisional Authority Comptroller Cash Management 

Controls Over the Development Fund for Iraq,” SIGIR 04-009, July 28, 2004, p. 4.

99. See SIGIR Report, “Oversight of Funds Provided to Iraqi Ministries through the 

National Budget Process,” SIGIR 05-004, January 30, 2005.

100. SIGIR Report, “Coalition Provisional Authority Comptroller Cash Management 

Controls Over the Development Fund for Iraq,” SIGIR 04-009, July 28, 2004, p. 5.

101. Interagency Assessment Report, “Financial Management Internal Controls Lessons 

Learned—Working Draft,” Pre-decisional, p. 27.

102. Interagency Assessment Report, “Financial Management Internal Controls Lessons 

Learned—Working Draft,” Pre-decisional, p. 27.

103. Interagency Assessment Report, “Financial Management Internal Controls Lessons 

Learned—Working Draft,” Pre-decisional, p. 36.

104. Interagency Assessment Report, “Financial Management Internal Controls Lessons 

Learned—Working Draft,” Pre-decisional, p. 2.

105. See SIGIR Report, “Oversight of Funds Provided to Iraqi Ministries through the 

National Budget Process,” SIGIR 05-004, January 30, 2005.

106. Former ORHA contracting official, interview, November 22, 2005.

107. DoD Report, “Contracts Awarded for the Coalition Provisional Authority by the 

Defense Contracting Command-Washington, “ D-2004-057, March 18, 2004, p. 24.

108. SIGIR Report, “Administration of Iraq Relief and Reconstruction Funds,” 05-007, 

April 30, 2005, p. 5.

109. White House document, “Executive Order Protecting the Development Fund for 

Iraq and Certain Other Property in Which Iraq Has An Interest,” May 22, 2003 

(online at: http://www.whitehouse.gov/news/releases/2003/05/20030522-15.html, 

accessed July 23, 2006).

110. USAID contractor, interview, February 21, 2006.

111. Former USAID official, interview, February 9, 2006.

112. USAID contractor, interview, February 22, 2006; former USAID official, interview, 

February 9, 2006.

113. USAID official, email to SIGIR, December 2005.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 133

114. USACE official, email to SIGIR, September 9, 2006.

115. Former ORHA/CPA official, interview, March 23, 2006.

116. Former ORHA/CPA official, interview, March 23, 2006. 

117. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 58).

118. Senior USAID official, interview, November 3, 2005; former USAID official, 

interview, February 9, 2006.

119. See Bechtel document, “Iraq Infrastructure Reconstruction Program, 

Recommended Implementation Plan,” June 2003 (online at: http://www.usaid.gov/

iraq/contracts/pdf/iirii_rfp031002attach6.pdf, accessed March 9, 2007).

120. UN document, “United Nations/World Bank Joint Iraq Needs Assessment,” October 

2003, pp. x-1.

121. CPA official, interview, March 9, 2007.

122. See SIGIR Lessons Learned Forum: Program and Project Management, 

Washington, D.C., April 12, 2006; former USAID official, interview, February 9, 

2006.

123. CPA official, interview, March 9, 2007.

124. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 96).

125. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 98).

126. The majority of USACE’s 35,000 personnel are civilians and are not required to 

deploy overseas. 

127. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 97-98).

128. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 86).

129. Official involved felt that USAID could not manage more than $3 billion. See 

former CPA official, interview, January 13, 2006. 

130. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 77).

131. Note: The CPA Administrator approved by initialing an approval box on a memo. 

Initials dated August 15, 2003. See CPA memo, Director, CPA-OMB, “Management 

of Large Appropriated Construction Contracts,” August 15, 2003. 

132. CPA info memo, Chief of Staff to CPA Staff, “President’s Supplemental—CPA 

Program Management Office,” unclassified, September 9, 2003.

133. White House document, “Address of the President to the Nation,” September 7, 

2003 (online at: http://www.whitehouse.gov/news/releases/2003/09/20030907-

1.html, accessed June 6, 2006).
134 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

134. CPA info memo, Chief of Staff to CPA Staff, “President’s Supplemental—CPA 

Program Management Office,” unclassified, September 9, 2003.

135. See Public Law 108-106 (online at: http://www.export.gov/Iraq/pdf/public_law_

108-116.pdf, accessed July 31, 2006).

136. United States Public Law 108-106, “Emergency Supplemental Appropriations Act 

for Defense and for the Reconstruction of Iraq and Afghanistan,” 2004, p. 1223. 

137. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 78-79).

138. PMO document, “Draft PMO Program Management Plan,” October 15, 2003, p. 11.

139. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 85).

140. Army, written comments to SIGIR, March 9, 2007.

141. PMO document, “PMO Program Management Plan,” March 26, 2004, p. 21.

142. Army, written comments to SIGIR, March 9, 2007.

143. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 118).

144. CPA PowerPoint, “Iraq Infrastructure Reconstruction: The Way Ahead,” October 

20, 2003.

145. These offices included the Iraq Provisional Command, the Iraq Reconstruction 

Office, Task Force Restore Iraqi Oil, Task Force Restore Iraqi Electricity, and the 

Iraq Area Office.

146. McGuiness, John Lt. Col., “Contracting to Rebuild a Nation: The roles and 

responsibilities of U.S. contracting activities in Iraq,” March 2005. 

147. SIGIR interview with senior contracting official, November 2-3, 2005.

148. See P.L. 108-106, (online at: http://export.gov/iraq/pdf/public_law_108-116.pdf, 

accessed February 25, 2007).

149. PMO document, “PMO Program Management Plan,” March 26, 2004, p. 1.

150. PMO, written comments to SIGIR, March 7, 2007.

151. PMO presentation, “Iraq Reconstruction Pre-proposal Conference Briefing,” 

January 21, 2004. 

152. PMO/PCO program management contractor, interview, March 14, 2006.

153. Former senior DoD contracting official, written comments to SIGIR, April 2006.

154. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 91).

155. USAAA Audit, “Program Management in Support of Iraq Reconstruction,” A-2005-

0194-ALA, May 26, 2005, p. 22.

156. Language in SPMOC contracts issued by the Pentagon Renovation Program, 

Section A, March 10, 2004.

157. USAAA Audit, “Program Management in Support of Iraq Reconstruction,” A-2005-

0194-ALA, May 26, 2005, p. 22.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 135

158. USAAA Audit, “Program Management in Support of Iraq Reconstruction,” A2005-0194-ALA, May 26, 2005, p. 48 (PCO followed a USAAA recommendation to 

have the matrix legally reviewed and approved so functions of the contractors were 

clearly stated in the award of the second-year option contracts).

159. CPA document, “Program Management Plan,” October 15, 2003, p. 16.

160. CPA document, “Program Management Plan,” October 15, 2003, p. 16.

161. Former senior DoD contracting official, written comments to SIGIR, April 2006.

162. Former senior DoD contracting official, written comments to SIGIR, April 2006.

163. PMO document, PowerPoint Presentation by PMO Deputy Director, April 24, 2004.

164. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 86).

165. Senior PMO official, interview, March 3, 2006.

166. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 86).

167. Former senior DoD contracting official, written comments to SIGIR, April 2006.

168. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 91).

169. Senior PMO official, interview, March 3, 2006.

170. CPA document, “Program Management Plan,” October 15, 2003, Figure 2.

171. CPA document, “Program Management Plan,” October 15, 2003, p. 26.

172. SIGIR memo, SIGIR to U.S. Ambassador to Iraq and Director, IRMO and 

Commanding General, USACE-GRD, “Fact Sheet on the Use of the $40 Million 

Appropriation To Support the Management and Reporting of the Iraq Relief and 

Reconstruction Fund,” SIGIR 05-026, January 27, 2006. 

173. PMO/PCO program management contractor, interview, March 14, 2006.

174. Army, written comments to SIGIR, March 9, 2007.

175. PMO/PCO program management contractor, interview, March 14, 2006.

176. Senior DoD contracting official, interview, November 2-3, 2006.

177. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 92).

178. Former senior CPA official, interview, March 3, 2006.

179. USACE contractor, interview, March 9, 2006.

180. USACE contractor, interview, March 9, 2006.

181. USACE contractor, interview, March 9, 2006.

182. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 93).

183. PCO official, interview, August 21, 2006.
136 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

184. PCO official, interview, August 21, 2006.

185. PCO official, interview, August 21, 2006.

186. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 219).

187. Former PMO official, interview, August 23, 2006.

188. CPA official, interview, March 9, 2007.

189. SIGIR Lessons Learned Forum: Program and Project Management, Washington 

D.C., April 12, 2006 (transcript p. 219).

190. Army, written comments to SIGIR, March 9, 2007.

191. See SIGIR report, Iraq Reconstruction: Lessons in Contracting and Procurement, 

July 2006. Also, PCO notes: “Because many contracts for the reconstruction of Iraq 

were previously awarded on a sole source or limited competition basis, language 

was developed in the Supplemental appropriations requiring funds to be expended 

on contracts awarded pursuant to full and open competition. The supplemental 

appropriation was passed in November 2003. Time was needed to develop RFP’s, 

go through the solicitation and selection process, award the contract, and mobilize 

contractors to Iraq. This was done within a period of four to five months.” Source: 

Army, written comments to SIGIR, March 9, 2007.

192. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 131).

193. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 99).

194. See former senior USAID official, interview, January 19, 2006. 

195. See former USAID official, interview, February 9, 2006; former senior USAID 

official, interview, January 19, 2006. 

196. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 131).

197. CPA document regarding USAID plans for FY 2004 supplemental, October 18, 

2003; former USAID official, interview, February 9, 2006; USAID/Iraq, written 

comments to SIGIR, June 8, 2006; IRMO document, “Weekly Status Report,” March 

6, 2007.

198. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 78 and 105).

199. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 105).

200. USAID OIG Report, “Audit of USAID/Iraq’s Economic Reform Program,” E-266-

04-004-P, September 20, 2004, p. 5.

201. USAID OIG Report, “Audit of USAID/Iraq’s Economic Reform Program,” E-266-

04-004-P, September 20, 2004, p. 7.

202. USAID document, “Fact Sheet #65,” September 23, 2003 (online at: http://www.

usaid.gov/iraq/updates/sep03/iraq_fs65_092403.pdf, accessed July 23, 2006).
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 137

203. See e.g. senior USAID official, interview, November 3, 2005; USAID contracting 

official, interview, November, 2, 2005. 

204. Former senior CPA official, interview, July 1, 2004.

205. Former senior CPA official, interview, July 1, 2004.

206. Army, written comments to SIGIR, March 9, 2007.

207. For more information on the contracting process for the design-build contractors, 

please see SIGIR report, Iraq Reconstruction: Lessons in Contracting and 

Procurement, July 2006. 

208. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript pp. 124-127).

209. USAID, written comments to SIGIR, March 12, 2007.

210. Senior USAID official-Baghdad, interview, January 19, 2006.

211. SIGIR Report, “Management of Rapid Regional Response Program Contracts in 

South-Central Iraq,” SIGIR 05-023, January 23, 2006, pp. 1-2.

212. GAO Report, “Rebuilding Iraq: Resource, Security, Governance, Essential Services, 

and Oversight Issues,” June 2004, p. 32 (http://www.au.af.mil/au/awc/awcgate/gao/

d04902r.pdf, accessed March 7, 2007).

213. Army, written comments to SIGIR, March 9, 2007.

214. SIGIR Report, “Management of Rapid Regional Response Program Contracts in 

South-Central Iraq,” SIGIR 05-023, January 23, 2006, p. 2.

215. See SIGIR Report, “Management of Rapid Regional Response Program Contracts in 

South-Central Iraq,” SIGIR 05-023, January 23, 2006.

216. PCO PowerPoint, “Accelerated Iraqi Reconstruction Program (AIRP): Faster, 

Cheaper, Safer,” July 16, 2004.

217. DoD Iraq Status Working Paper, Unclassified, June 22, 2004, p. 18.

218. Former PMO official, interview, November 15, 2005.

219. PCO PowerPoint, “Accelerated Iraqi Reconstruction Program (AIRP): Faster, 

Cheaper, Safer,” July 16, 2004.

220. Former PMO official, interview, August 23, 2006.

221. Former PCO official, interview, April 24, 2006.

222. USAAA Report, “Fund Accountability for FY 2004 Iraq Relief and Reconstruction 

Funds,” A-2006-0046-ALA, January 31, 2006, p. 12.

223. CPA finance/budget official, written comments to SIGIR, February 4, 2005.

224. DoD briefing document, “Acquisition Management Strategic Assessment Team,” 

March 4, 2004.

225. DoD briefing document, “Acquisition Management and Logistics Assessment 

Team,” February-March 2004.

226. USAAA Report, “Fund Accountability for FY 2004 Iraq Relief and Reconstruction 

Funds,” A-2006-0046-ALA, January 31, 2006, p. 11.
138 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

227. USAAA Report, “Fund Accountability for FY 2004 Iraq Relief and Reconstruction 

Funds,” A-2006-0046-ALA, January 31, 2006, p. 8.

228. USAAA Report, “Fund Accountability for FY 2004 Iraq Relief and Reconstruction 

Funds,” A-2006-0046-ALA, January 31, 2006, p. 11.

229. USAAA Report, “Fund Accountability for FY 2004 Iraq Relief and Reconstruction 

Funds,” A-2006-0046-ALA, January 31, 2006, p. 19.

230. PCO official, interview, March 8, 2007.

231. Former senior DoD contracting official, interviews, November 2-3, 2005.

232. Former senior DoD contracting official, interviews, November 2-3, 2005. 

233. See e.g. USACE official, interview, June 27, 2004.

234. SIGIR Lessons Learned Forum: Contracting II, Washington, D.C., December 13, 

2005 (transcript p. 57).

235. SIGIR Lessons Learned Forum: Contracting II, Washington, D.C., December 13, 

2005 (transcript p. 58).

236. Former senior DoD contracting official, interviews, November 2-3, 2005.

237. Former PMO/PCO sector program manager, interview, June 15, 2004.

238. USACE contractor, interview, March 9, 2006.

239. PMO/PCO sector program management contractor, interview, March 24, 2006.

240. SIGIR Report, “Challenges Faced in Carrying Out Iraq Relief and Reconstruction 

Fund Activities,” SIGIR-05-029, January 26, 2006, p. 9.

241. SIGIR Report, “Challenges Faced in Carrying Out Iraq Relief and Reconstruction 

Fund Activities,” SIGIR-05-029, January 26, 2006, p. 9.

242. SIGIR Report, “Management of the Primary Healthcare Centers Construction 

Project,” SIGIR-06-011, April 29, 2006, p. 8.

243. Senior DoD contracting official, interview, December 14, 2005.

244. Senior DoD contracting official, interview, December 14, 2005.

245. Senior DoD contracting official, interview, December 14, 2005.

246. Former CPA official, United States Institute for Peace, interview, September 14, 

2004 (online at: http://www.usip.org/library/oh/iraq.html, accessed May 26, 2006).

247. Senior DoD contracting official, interview, December 14, 2005.

248. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 144).

249. SIGIR Lessons Learned Forum: Contracting II, Washington, D.C., December 13, 

2005 (transcript p. 96).

250. SIGIR Lessons Learned Forum: Contracting II, Washington, D.C., December 13, 

2005 (transcript pp. 95-97).

251. SIGIR Lessons Learned Forum: Contracting II, Washington, D.C., December 13, 

2005 (transcript p. 100).
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 139

252. Congressional Research Service, “Recent Developments in Reconstruction 

Assistance,” updated May 12, 2005, p. 11.

253. GAO Report, “Rebuilding Iraq: Resource, Security, Governance, and Essential 

Services, and Oversight Issues,” GAO-04-902R, June 2004, p. 93.

254. USAID OIG Report, “Audit of USAID/Iraq’s Community Action Program,” E-267-

05-001-P, p. 9.

255. USAID OIG Report, “USAID/Iraq’s Infrastructure Reconstruction and 

Rehabilitation Program,” June 3, 2006, E-266-04-002-P, p. 6.

256. See SIGIR Report, “Review of Administrative Task Orders for Iraq Reconstruction 

Contracts,” SIGIR-06-028, October 23, 2006. Note: GRD did not agree with the 

analytical methods used in this audit. Source: DoD, written comments to SIGIR, 

March 7, 2007.

257. SIGIR Report, “Review of Administrative Task Orders for Iraq Reconstruction 

Contracts,” SIGIR-06-028, October 23, 2006, p. 9.

258. Former military officer, interview, December 22, 2005. 

259. Former USAID official, interview, February 9, 2006.

260. Former USAID contractor, interview, January 5, 2006.

261. USACE official, interview, March 9, 2006; former USAID contractor, January 5, 

2006.

262. DoS document, “Draft Report, Electricity Assessment Team,” April 2005, p. 16; 

former senior advisor, interview, December 28, 2005.

263. Former senior USAID official, interview, January 19, 2006.

264. Former senior USAID official, interview, January 19, 2006.

265. Former senior USAID official, interview, January 19, 2006.

266. Former senior USAID official, interview, January 19, 2006.

267. Former 1st Cav member, interview, December 22, 2005.

268. Senior Army officer, interview, January 26, 2003.

269. White House document, “United States Government Operations in Iraq,” NSPD 

36, May 11, 2004 (online at: http://www.fas.org/irp/offdocs/nspd/nspd051104.pdf, 

accessed June 6, 2006).

270. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 94).

271. GAO Report, “Rebuilding Iraq: Status for Funding and Reconstruction Efforts,” 

GAO-05-876, July 2005, p. 4.

272. GAO Report, “Rebuilding Iraq: Status for Funding and Reconstruction Efforts,” 

GAO-05-876, July 2005, p. 4.

273. SIGIR Lessons Learned Forum: Program and Project Management Washington, 

D.C., April 12, 2006 (transcript p. 148).

274. Former PCO official, interview, April 24, 2006.
140 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

275. GAO Report, “Rebuilding Iraq: Status for Funding and Reconstruction Efforts,” 

GAO-05-876, July 2005.

276. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 149).

277. Former DoD contracting official, written comments to SIGIR, April 2006.

278. This was always PMO’s original vision—to have GRD manage construction projects 

post-award. (Source: Former DoD contracting official, written comments to SIGIR, 

April 2006.)

279. Non-construction materiel contracts were administered by DCMA in Iraq and from 

the United States.

280. DoD contracting official JCC-I, interview, December 30, 2005.

281. See JCC-I document, “Joint Contracting Command, Iraq: PCO-GRD Pre & Post 

Task Order Definitization Roles & Responsibilities,” undated.

282. PCO memorandum, PCO Director to ASA (ALT), “SAAL-ZX Memorandum for 

Director Project and Contracting Office Dated 7 February 2005: Business Plan for 

the Consolidation and Streamlining of the Project and Contracting Office with the 

U.S. Army Corps of Engineers,” March 7, 2005. 

283. USACE official, interview, January 18, 2006. 

284. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 155); and former senior USAID official, written 

comments to SIGIR, August 11, 2006.

285. Former PCO official, interview, April 24, 2006.

286. Former IRMO advisor, interview, May 2, 2006.

287. DoS document, “Draft Report, Electricity Assessment Team,” April 2005, p. 15.

288. PowerPoint presentation provided by former PCO official, undated.

289. SIGIR Report, “Challenges Faced in Carrying Out Iraq Relief and Reconstruction 

Fund Activities,” SIGIR-05-029, January 26, 2006. 

290. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 153).

291. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 153).

292. OMB Report, Section 2207 Report, October 2004.

293. CRS Report, “Recent Developments in Reconstruction Assistance,” updated May 12, 

2005, p. 14.

294. OMB Report, Section 2207 Report, October 2004.

295. OMB Report, Section 2207 Report, January 2005.

296. OMB Report, Section 2207 Report, April 2005.

297. OMB Report, Section 2207 Report, April 2005.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 141

298. SIGIR Report, “Changes in Iraq Relief and Reconstruction Fund Program Activities 

October through December 2005,” SIGIR-06-004, April 28, 2006, p. ii.

299. SIGIR Report, “Changes in Iraq Relief and Reconstruction Fund Program Activities 

October through December 2005,” SIGIR-06-004, April 28, 2006, p. iii.

300. SIGIR Report, “Changes in Iraq Relief and Reconstruction Fund Program Activities 

October through December 2005,” SIGIR-06-004, April 28, 2006, p. 13.

301. SIGIR Report, “Challenges Faced in Carrying Out Iraq Relief and Reconstruction 

Fund Activities,” SIGIR-05-029, January 26, 2006, p. i.

302. Former USAID official, interview, May 2, 2006.

303. Former PCO official, memo provided to SIGIR, September 5, 2004.

304. Former PCO official, memo provided to SIGIR, March 2005.

305. Senior USACE official, interview, March 9, 2006.

306. Senior DoD contracting official, interview, December 14, 2005.

307. Senior DoD contracting official, interview, December 14, 2005.

308. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 220).

309. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 205).

310. DoD, written comments to SIGIR, March 7, 2007.

311. PCO document, “Director’s Update Brief,” February 25, 2005.

312. PCO document, “Director’s Update Brief,” February 25, 2005.

313. SIGIR Report, “Changes in Iraq Relief and Reconstruction Fund Program Activities 

October through December 2005,” SIGIR-06-004, April 28, 2006, p. ii.

314. SIGIR Report, “Changes in Iraq Relief and Reconstruction Fund Program Activities 

October through December 2005,” SIGIR-06-004, April 28, 2006, p. 12.

315. Former PMO official, written comments to SIGIR, August 7, 2006.

316. KPMG Report, “Development Fund for Iraq: Statement of Cash Receipts and 

Payments for the Period 28 January 2004 to 31 December 2005” (online at: http://

www.iamb.info/auditrep/r123104a.pdf, accessed June 6, 2006).

317. Iraq Ministry of Finance memo, “Administration of Development Fund for Iraq 

(DFI)-Funded Contracts,” June 15, 2004.

318. KPMG Report, “Development Fund for Iraq: Statement of Cash Receipts and 

Payments for the Period 28 January 2004 to 31 December 2005” (online at: http://

www.iamb.info/auditrep/r123104a.pdf, accessed on June 6, 2006).

319. SIGIR Report, “Administration of Contracts Funded by the Development Fund for 

Iraq,” SIGIR-05-008, April 30, 2005.

320. SIGIR Report, “Briefing to the International Advisory and Monitoring Board for 

Iraq: Management Controls Over the Development Fund for Iraq,” SIGIR-06-013, 

April 28, 2006 (online at: http://www.sigir.mil/reports/pdf/audits/06-013.pdf).
142 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

321. SIGIR Report, “Follow-up on SIGIR Recommendations Concerning the 

Development Fund for Iraq,” SIGIR-06-036, January 29, 2007, p. ii.

322. The handover of DFI administration responsibilities to the Iraqis was scheduled to 

take place on December 31, 2005, but was extended. 

323. KPMG Report, “Development Fund for Iraq: Statement of Cash Receipts and 

Payments for the Period 1 January 2005 to 30 June 2005” (online at: http://www.

iamb.info/auditrep/r110405b.pdf).

324. Ernst & Young Report, “Management Letter for Development Fund for Iraq for the 

Period from July 1, 2005 to December 31, 2005,” p. 25 (online at http://www.iamb.

info/auditrep/r123105c.pdf, accessed February 6, 2007).

325. Former PCO official, interview, April 24, 2006.

326. Former PCO official, interview, April 24, 2006.

327. At this time, more than $11 billion of the IRRF funds had been apportioned, nearly 

$9 billion had been committed, and $5.291 billion had been obligated. See PCO 

document, “PCO Iraq Reconstruction Update,” December 15, 2004.

328. PCO document, “PCO Iraq Reconstruction Update,” December 15, 2004.

329. PCO document, “PCO Iraq Reconstruction Update,” December 15, 2004.

330. Statement of Cliff Mumm, President, Bechtel Infrastructure Corporation, before the 

Committee on Government Reform, U.S. House of Representatives, September 28, 

2006.

331. USAID, written comments to SIGIR, February 22, 2007.

332. USAID program management contractor, interview, January 5, 2006.

333. Bechtel project fact sheet, “Bechtel Iraqi Reconstruction” (online at: http://www.

bechtel.com/iraq.htm, accessed June 6, 2006).

334. Senior PCO official, interview, February 10, 2006.

335. USAID OIG Report, “USAID/Iraq’s Infrastructure Reconstruction and 

Rehabilitation Program,” E-266-04-002-P, June 3, 2004, p. 6.

336. USAID, written comments to SIGIR, February 22, 2007.

337. Senior USACE-GRD official, interview, February 8, 2006.

338. Changes made to the contracting process during this period are further discussed in 

the SIGIR report Iraq Reconstruction: Lessons in Contracting and Procurement, July 

2006.

339. Former PCO official, memo provided to SIGIR, September 5, 2004.

340. Former PCO official, memo provided to SIGIR, September 5, 2004.

341. PCO PowerPoint, “IRRF Program: PCO Contracting Breakdown,” October 11, 

2005.

342. Army, written comments to SIGIR, March 9, 2007.

343. PMO/PCO program management contractor, interview, May 2, 2006.

344. Former PCO official, interview, May 17, 2006.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 143

345. USAID contractor, interview, February 22, 2006.

346. Former USAID contractor, interview, January 5, 2006; USACE official, interview, 

March 9, 2006.

347. USAID, written comments to SIGIR, August 11, 2006.

348. Senior PCO official, interview, June 15, 2004.

349. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 177).

350. SIGIR Lessons Learned Forum: Program and Project Management, Washington, 

D.C., April 12, 2006 (transcript p. 177).

351. PCO memo, “Recommendations and Observations for PCO Regional and Outreach 

Observations,” September 1, 2004.

352. OMB Report, Section 2207 Report, July 2004.

353. Former PCO regional project coordinator, interview, March 30, 2006.

354. Former PCO regional project coordinator, interview, March 30, 2006.

355. Former PCO regional project coordinator, interview, March 30, 2006.

356. Former PCO regional project coordinator, interview, March 30, 2006.

357. Former PCO regional project coordinator, interview, March 30, 2006.

358. Former PCO regional project coordinator, interview, March 30, 2006.

359. PCO official, interview, August 21, 2006.

360. Former PCO official, interview, April 24, 2006.

361. USAAA Report, “Program Management in Support of Iraq Reconstruction,” 

A-2005-0194-ALA, May 26, 2005, pp. 14-15.

362. See SIGIR Report, “Management of the Primary Healthcare Centers Construction 

Projects,” SIGIR-06-011, April 29, 2006.

363. USAID OIG Report, “Audit of USAID/Iraq’s Results Data for Its Education 

Activities in Iraq,” E-266-04-001-P, March 19, 2004, p. 15.

364. USAID OIG Report, “Audit of USAID/Iraq’s Results Data for Its Education 

Activities in Iraq,” E-266-04-001-P, March 19, 2004, p. 14.

365. PCO-GRD document, “Schools Renovation Program—Characterization of Iraq 

Relief & Reconstruction Fund”, March 2006.

366. USAID OIG Report, “Audit of USAID/Iraq’s Local Governance Activities,” 

E-267-06-003-P, July 10, 2006, p. 1.

367. GAO Testimony, “Enhancing Security, Measuring Program Results, and 

Maintaining Infrastructure Are Necessary To Make Significant and Sustainable 

Progress,” GAO-06-179T, October 18, 2005.

368. GAO Testimony, “Rebuilding Iraq: Stabilization, Reconstruction, and Financing 

Challenges,” GAO-06-428T, February 8, 2006, p. 11.

369. GAO Testimony, “Rebuilding Iraq: Stabilization, Reconstruction, and Financing 

Challenges,” GAO-06-428T, February 8, 2006, p. 11.
144 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

370. Senior DoD contracting official, interview, November 17, 2005; DoD contractor, 

interview, March 19, 2006.

371. CRS Report, “Recent Developments in Reconstruction Assistance,” updated May 12, 

2005, p. 11.

372. GAO Report, “Rebuilding Iraq: Resource, Security, Governance, and Essential 

Services, and Oversight Issues,” GAO-04-902R, June 2004, p. 91.

373. SIGIR Fact Sheet, “Fact Sheet on Major U.S. Contractors’ Security Costs Related to 

Iraq Relief and Reconstruction Fund Contracting Activities,” SIGIR-06-042, January 

30, 2007.

374. SIGIR Report, “Cost-to-Complete Estimates and Financial Reporting for the 

Management of the Iraq Relief and Reconstruction Fund,” SIGIR-05-011, July 26, 

2005, p. 1.

375. SIGIR Report, “Cost-to-Complete Estimates and Financial Reporting for the 

Management of the Iraq Relief and Reconstruction Fund,” SIGIR-05-011, July 26, 

2005, p. 1.

376. See SIGIR Report, “Methodologies for Reporting Cost-to-Complete Estimates,” 

SIGIR-05-027, January 27, 2006, p. 4.

377. SIGIR Report, “Methodologies for Reporting Cost-to-Complete Estimates,” SIGIR05-027, January 27, 2006, p. 4.

378. SIGIR Report, “Methodologies for Reporting Cost-to-Complete Estimates,” SIGIR05-027, January 27, 2006, p. 6.

379. SIGIR Report, “Methodologies for Reporting Cost-to-Complete Estimates,” SIGIR05-027, January 27, 2006, p. 8.

380. USAID notes that it “was not required to submit guidance to IRMO. As a courtesy, 

USAID provided IRMO with a copy of [its] internal guidance in February 2007.” 

Source: USAID, written comments to SIGIR, February 22, 2007.

381. Senior USACE official, interview, March 9, 2006.

382. Senior USACE official, interview, March 9, 2006.

383. SIGIR Report, “Cost-to-Complete Estimates and Financial Reporting for the 

Management of the Iraq Relief and Reconstruction Fund,” SIGIR-05-11, October 

2005, pp. 3-4.

384. USAID finance team, interview, September 7, 2006.

385. USAID staff, interview, September 7, 2006. See also, S/CRS document, “Essential 

Tasks Matrix” (online at: http://www.state.gov/documents/organization/53464.pdf, 

accessed February 25, 2007).

386. Former PCO official, memo provided to SIGIR, March 2005.

387. DoS/Interagency Report, “Financial Assessment Team Summary,” Final Draft, April 

11, 2005.

388. DoS/Interagency Report, “Financial Assessment Team Summary,” Final Draft, April 

11, 2005.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 145

389. USAAA Report, “Fund Accountability for Fiscal Year 2004 Iraq Relief and 

Reconstruction Funds,” A-2006-0046-ALA, January 31, 2006, p. 5.

390. See e.g., SIGIR Report, “Review of the U.S. Agency for International Development’s 

Management of the Basrah Children’s Hospital,” SIGIR-06-026, July 31, 2006. 

391. See e.g., SIGIR Report, “Review of the U.S. Agency for International Development’s 

Management of the Basrah Children’s Hospital,” SIGIR-06-026, July 31, 2006. 

392. Earned Value Management (EVM) is “the use of an integrated management system 

that coordinates work scope, schedule, and cost goals and objectively measures 

progress towards these goals.” Source: DoD Report, “Scheduling Guide for Program 

Managers,” Defense Systems Management College Press, Fort Belvoir, VA, October 

2001, p. 11.

393. PCO document, “Comprehensive Cost Management,” March 9, 2005, p. 7.

394. Senior PCO official, interview, February 10, 2006.

395. PCO document, “Comprehensive Cost Management,” March 9, 2005, p. 7.

396. See SIGIR Report, “Review of the Use of Definitization Requirements for Contracts 

Supporting Reconstruction in Iraq,” SIGIR-06-019, July 28, 2006, p. 4.

397. Senior PCO official, interview, February 10, 2006.

398. See SIGIR Report, “Review of Administrative Task Orders for Iraq Reconstruction 

Contracts,” SIGIR-06-028, October 23, 2006.

399. USAID, written comments to SIGIR, February 22, 2007.

400. USAID, written comments to SIGIR, February 22, 2007.

401. USAID notes that more than 90% of Bechtel’s subcontracts were fixed-priced. 

Source: USAID, written comments to SIGIR, February 22, 2007.

402. Iraq Strategy on Infrastructure Strengthening, “Methods of Post-Conflict 

Reconstruction in Iraq: A Preliminary Assessment,” October 2005, p. 9.

403. Senior USACE-GRD official, interview, February 16, 2006.

404. SIGIR Report, “Policies and Procedures Used for Iraq Relief and Reconstruction 

Fund Project Management—Construction Quality Assurance,” SIGIR-05-012, July 

22, 2005. p. i.

405. SIGIR Report, “Zakho Military Academy, Zakho, Iraq,” SIGIR PA-06-039, April 12, 

2006, p. i.

406. SIGIR Report, “Zakho Military Academy, Zakho, Iraq,” SIGIR PA-06-039, April 12, 

2006, p. i.

407. SIGIR Report, “Zakho Military Academy, Zakho, Iraq,” SIGIR PA-06-039, April 12, 

2006, p. i.

408. SIGIR Report, “Zakho Military Academy, Zakho, Iraq,” SIGIR PA-06-039, April 12, 

2006, p. i.
146 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

409. SIGIR Report, “Aviation Base Building in Kirkuk, Iraq,” SIGIR PA-06-040, April 12, 

2006, p. iii.

410. SIGIR Report, “Ninewa Village Roads—Segment 3 Governorate of Ninewa, Iraq,” 

SIGIR PA-06-035, April 5, 2006, p. i.

411. SIGIR Report, “Ninewa Village Roads—Segment 3 Governorate of Ninewa, Iraq,” 

SIGIR PA-06-035, April 5, 2006, p. i.

412. SIGIR Report, “Ninewa Village Roads—Segment 3 Governorate of Ninewa, Iraq,” 

SIGIR PA-06-035, April 5, 2006, p. 14.

413. SIGIR Report, “Ninewa Village Roads—Segment 3 Governorate of Ninewa, Iraq,” 

SIGIR PA-06-035, April 5, 2006, p. 14.

414. See SIGIR Report, “Baghdad Police College—Baghdad, Iraq,” SIGIR-PA-05-078.2, 

SIGIR PA-078.2, January 29, 2007.

415. USAID OIG Report, “Audit of USAID/Iraq’s Health System Strengthening Contract 

Activities,” E-267-05-002-P, February 28, 2005, p. 5.

416. USAID OIG Report, “Audit of USAID/Iraq’s Health System Strengthening Contract 

Activities,” E-267-05-002-P, February 28, 2005, p. 16.

417. USAID/Iraq A&A Notice 05-001, “Processing Modifications to Contract Statements 

of Work,” January 11, 2005.

418. USAID OIG Report, “Audit of USAID/Iraq’s Economic Reform Program Activities,” 

E-266-05-004-P, September 20, 2004, p. 5.

419. USAID OIG Report, “Audit of USAID/Iraq’s Economic Reform Program Activities,” 

E-266-05-004-P, September 20, 2004, p. 9.

420. USAID OIG Report, “Audit of USAID/Iraq’s Economic Reform Program Activities,” 

E-266-05-004-P, September 20, 2004, p. 11.

421. USAID OIG Report, “Audit of USAID/Iraq’s Agriculture Reconstruction and 

Development Program,” E-267-07-002-P, January 22, 2007, p. 7.

422. USAID Report, “Audit of USAID/Iraq’s Infrastructure Reconstruction and 

Rehabilitation Program,” E-266-04-002-P, June 3, 2004, p. 5.

423. USAID OIG Report, “Audit of USAID/Iraq’s Infrastructure Reconstruction and 

Rehabilitation Program,” E-266-04-002-P, June 3, 2004, pp. 5-6.

424. USAID OIG Report, “Audit of USAID/Iraq’s Infrastructure Reconstruction and 

Rehabilitation Program,” E-266-04-002-P, June 3, 2004, p. 19.

425. See SIGIR Report, “Management of the Primary Healthcare Centers Construction 

Projects,” SIGIR-06-011, April 29, 2006.

426. See SIGIR Report, “Review of DynCorp International, LLC, Contract Number 

S-LMAQM-04-C-0030, Task Order 0338, for the Iraqi Police Training Program 

Support,” SIGIR-06-029/DoS-IG-AUD/IDQ-07-20, January 30, 2007.

427. See SIGIR Report, “Summary Report Ground Project Surveys for the Quarter 

Ended March 31, 2006,” SIGIR PA-06-052, July 31, 2006.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 147

428. SIGIR Report, Memorandum for Director, Project and Contracting Office—Iraq 

and Commanding General, Joint Contracting Command-Iraq/Afghanistan, SIGIR05-010, July 26, 2005.

429. SIGIR Report, “Award Fee Process for Contractors Involved in Iraq Reconstruction,” 

SIGIR-05-017, October 25, 2005, p. 15.

430. DoD contracting official JCC-I, interview, December 30, 2005.

431. Former senior advisor, written comments to SIGIR, April 17, 2006.

432. Former senior advisor, written comments to SIGIR, April 17, 2006.

433. Former IRMO senior advisor, written comments to SIGIR, April 17, 2006.

434. PCO official, interview, March 2, 2007.

435. PCO official, interview, March 2, 2007.

436. See e.g., USAID program management official, interview, January 9, 2006; 

USAID contractor, interview, January 5, 2006. 

437. Former USAID official, written comments to SIGIR, August 2, 2006.

438. USAID, written comments to SIGIR, March 5, 2007.

439. USAID, written comments to SIGIR, March 5, 2007.

440. USAID, written comments to SIGIR, March 5, 2007.

441. PCO capacity development staff, written comments to SIGIR, January 20, 2006. 

442. GAO Report, “Enhancing Security, Measuring Program Results, and Maintaining 

Infrastructure Are Necessary To Make Significant and Sustainable Progress,” p. 22. 

443. PCO document, “History of GRD/PCO Capacity Building.”

444. Including representatives from DoS, USAID, PCO, and USACE. 

445. GAO Report, “Enhancing Security, Measuring Program Results, and Maintaining 

Infrastructure Are Necessary to Make Significant and Sustainable Progress,” p. 22.

446. GAO Report, “Rebuilding Iraq: Stabilizations, Reconstruction & Financing 

Challenges,” p. 13.

447. DoS, Section 2207 Report, January 2006, p. 52.

448. PCO capacity development staff, written comments to SIGIR, January 20, 2006.

449. SIGIR Report, “GRD-PCO Management of the Transfer of IRRF-funded Assets to 

the Iraqi Government,” SIGIR-05-028, January 24, 2006. 

450. Former USAID contractor, interview, January 5, 2006. 

451. PCO capacity-development staff, written comments to SIGIR, January 20, 2006.

452. DoS Report, Section 2207 Report, January 2006, p. 8.

453. Senior USACE official, interview, March 9, 2006. 

454. DoS document “Fact Sheet on Provincial Reconstruction Teams,” February 26, 2006 

(online at: http://iraq.usembassy.gov/iraq/20060223_prt_fact_sheet.html).

455. DoS document “Fact Sheet on Provincial Reconstruction Teams,” February 26, 2006 

(online at:s http://iraq.usembassy.gov/iraq/20060223_prt_fact_sheet.html).
148 I IRAQ RECONSTRUCTION: Lessons in Program and Project management

456. House Report 109-388, “Making Emergency Supplemental Appropriations for the 

Fiscal Year Ending September 30, 2006 and for Other Purposes,” March 13, 2006, 

p. 33.

457. House Report 109-388, “Making Emergency Supplemental Appropriations for the 

Fiscal Year Ending September 30, 2006 and for Other Purposes,” March 13, 2006, 

p. 33.

458. House Report 109-388, “Making Emergency Supplemental Appropriations for the 

Fiscal Year Ending September 30, 2006 and for Other Purposes,” March 13, 2006, 

p. 34.

459. SIGIR Report, “Status of the Provincial Reconstruction Team Program in Iraq,” 

SIGIR-06-034, October 29, 2006, p. 14. 

460. See SIGIR Report, “Status of the Provincial Reconstruction Team Program in Iraq,” 

SIGIR-06-034, October 29, 2006.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 149

Forum Participants
150 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

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. 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. He also served 

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 Relations’ 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 served also in Vietnam and in Operation 

Desert Storm.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 151

Joe Benkert has been the Deputy Director of the Defense Reconstruction Support Office and its predecessor, the Defense Support 

Office-Iraq, since September 2004. Mr. Benkert was instrumental 

in establishing these offices as a means to provide a single focus 

within the Office of the Secretary of Defense for coordination of the 

Defense Department’s support of stabilization and reconstruction 

activities in Iraq and Afghanistan. Prior to this appointment, he was 

the Deputy and Chief of Operations for the Coalition Provisional 

Authority’s Washington office. Before that, he was Chief of Staff for 

the Principal Deputy Under Secretary of Defense for Policy.

Alan Chvotkin is Senior Vice President and Counsel of the Professional Services Council (PSC), the principal national trade association representing the professional and technical services industry. 

PSC is known for its leadership in the full range of acquisition, procurement, outsourcing, and privatization issues. He is a member of 

the Supreme Court and the American and District of Columbia bar 

associations. He is also a member of the National Contract Management Association and serves on its national board of advisors.

Tom Crangle is a consultant, investor, and licensed professional 

engineer with more than 25 years of experience in construction, 

entrepreneurship, and employee leadership. He has been a career 

senior manager for the Tennessee Valley Authority, held senior and 

ownership positions in several start-up companies, and served as a 

consultant to the Federal Emergency Management Agency (FEMA). 

At FEMA, his concentration was primarily on electric systems infrastructure restoration and debris management. In 2004, Mr. Crangle 

served as Senior and Deputy Senior Advisor to the Ministry of Electricity, Coalition Provisional Authority-Baghdad.
152 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

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 interdisciplinary program team 

that focuses management support in 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 emergency response phases of 

infrastructure development and operations. 

Ginger M. Cruz is the Deputy Inspector General for 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 for Public Affairs at the U.S. Department of Housing and Urban Development, former Communications 

Director for the Governor of Guam, and a former Vice President for 

a small federal consulting firm in Washington, D.C.

Colonel Peter (Duke) DeLuca, U.S. Army, is a combat engineer 

who, as the Assistant Chief of Staff, Engineer (CJ-7), for the MultiNational Security Transition Command, recently managed a 

construction program with $2 billion in execution and $1 billion 

in additional planned requirements in support of the Iraqi Security 

Forces. Previously, he was a Deputy Engineer of the NATO Rapid 

Deployment Corps-Italy. He is currently a Senior Service College 

Fellow at Harvard University’s John F. Kennedy School of Government, with particular interest in energy security. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 153

Patrick Garvey is a member of the professional staff on the Senate 

Foreign Relations Committee, chaired by Senator Richard G. Lugar. 

His portfolio includes oversight for Iraq stabilization and reconstruction efforts, counter-terrorism, and broader Middle East policy. 

He had a direct role in producing 23 Iraq oversight hearings. Mr. 

Garvey is a Commander in the Navy Reserve, and, when mobilized 

to the Persian Gulf, he was seconded to the United States Agency for 

International Development Baghdad Mission to assist in the early 

stages of the reconstruction effort and develop the Strategic Plan for 

the Future of Iraq.

Charles M. Hess is a Senior Program Director with the Shaw 

Group’s Hurricane Katrina Recovery Task Force. Mr. Hess formerly 

served as Director of PCO, where he provided program management 

and leadership for more than $13 billion of construction and nonconstruction activities. 

Chris Hoh is Director for South Central European Affairs in the 

U.S. Department of State. From 2004 to 2006, he was Director for 

Response Strategy and Resource Management in the new U.S. Office 

for Reconstruction and Stabilization, charged with improving civilian deployment to stability operations in post-conflict states. From 

2003 to 2004, he served as a Special Advisor for Secretary of State 

Powell’s Diplomatic Readiness Initiative. He was Deputy Chief of 

Mission of the U.S. Embassy in Sarajevo, Bosnia, from 2000 to 2003. 
154 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Kathye Johnson is the Director of Reconstruction, Gulf Region 

Division (GRD)-PCO. Prior to this appointment, Ms. Johnson was 

Deputy Director of PCO. Ms. Johnson is a civil engineer. During her 

career, she has worked on most of the major construction sectors 

(including refineries, electrical generation facilities, and historic 

institutions). 

Major General Ronald L. Johnson, U.S. Army, is the Deputy Chief 

of Engineers and Deputy Commanding General of the U.S. Army 

Corps of Engineers. Prior to this assignment, MG Johnson served as 

Director of the U.S. Army Installation Management Agency, directing the management of 181 Army installations, more than 75,000 

military and civilian personnel, and a budget exceeding $8 billion. 

In Iraq, MG Johnson served as Commanding General, GRD, and 

Deputy Director of CPA’s Program Management Office.

James Kunder is Assistant Administrator for U.S. Agency for 

International Development’s Asia and the Near East Bureau. His 

distinguished career includes positions as Director for Relief and 

Reconstruction in Afghanistan, Deputy Assistant Administrator for 

USAID’s Bureau for External Affairs, and Director of the Agency’s 

Office of U.S. Foreign Disaster Assistance. 

Major General Daniel E. Long, Jr., U.S. Army, was the Director of 

PCO. Prior to this assignment, General Long was Commander, 29th 

Infantry Division (L). From September 2001 through April 2002, 

General Long was Deputy Commander, Stabilization Force MultiNational Division North in Bosnia before returning to command the 

29th Division. 
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 155

Steve Lord is an Assistant Director in the Government Accountability Office’s (GAO) International Affairs and Trade Group, 

supervising a body of work on Iraq reconstruction issues, including 

an examination of the current U.S. reconstruction strategy. Mr. Lord 

has worked in GAO for more than 20 years in positions of increasing responsibility, including three years in GAO’s overseas office in 

Frankfurt, Germany. 

Joseph T. (Mickey) McDermott is the Assistant Inspector General 

for Audit at SIGIR. He serves as the principal advisor to the Inspector General and the Deputy Inspector General for all audit matters, 

including audit policy and planning. He spends most of his time in 

Baghdad with his audit staff.

Christopher Milligan was a former USAID Deputy Mission 

Director in Iraq. 

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 PMO in Baghdad. 

Ambassador Robin Raphel is a consultant to SIGIR. She served 

in Iraq under both General Jay Garner and Ambassador L. Paul 

Bremer, and subsequently was Coordinator for Iraq Reconstruction at the Department of State. Ambassador Raphel recently retired 

from the Department of State after a 30-year career, during which 

she held several senior positions, including Assistant Secretary 

of State for South Asian Affairs, Ambassador to the Republic of 

Tunisia, and Vice President of the National Defense University. 
156 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT

Ambassador Joseph A. Saloom III is the Director for the Iraq 

Reconstruction Management Office. A career Foreign Service 

Officer, Ambassador Saloom served previously as the Deputy Chief 

of Mission, Niger; Ambassador to the Republic of Guinea; and 

Deputy Assistant Secretary of State for Finance and Development.

Brigadier General Stephen Seay, U.S. Army (Ret.), is a member of 

the board at eMagin Corporation. While on active duty, he served 

as Program Executive Officer for Simulation, Training, and Instrumentation and Commanding General, Joint Contracting CommandIraq/Head of Contracting Authority, Operation Iraqi Freedom. He 

has also served as Program Manager for a joint system; headed the 

Joint Target Oversight Council; and was Commanding General, 

Simulation, Training and Instrumentation Command, Army 

Materiel Command. 

Robert J. Silverman is the Director of the Office of Iraq Economic 

Affairs at the U.S. Department of State. In 2003, Mr. Silverman 

served as Deputy Economic Counselor, where he stayed until he 

assumed the position Deputy Director of the Office of Northern 

Gulf Affairs (Iran and Iraq), known previously as the Office of 

Special Plans.

James “Spike” Stephenson is the Senior Advisor for Post-Conflict 

Stabilization and Reconstruction at Creative Associates International, Inc. Formerly a Senior Foreign Service Officer with USAID, 

his duties included 13 months as Mission Director in Iraq and Senior 

Advisor to the Department of State’s Coordinator for Reconstruction 

and Stabilization.
MARCH 2007 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 157

Norm Szydlowski is the President and Chief Executive Officer 

of Colonial Pipeline. He has more than 23 years experience with 

Chevron Corporation in roles ranging from field engineer to Vice 

President of Refining, where he was responsible for one of the largest 

refinery systems in the world. He served as the Senior Consultant to 

the Iraqi Ministry of Oil.

Kevin R. Taecker is the U.S. Treasury Department Financial 

Attaché-Baghdad and Director, Iraq Reconstruction Management 

Office for Financial and Fiscal Affairs. Previously, Mr. Taecker 

served as Senior Banking Advisor, Economic Policy Directorate 

of the Central Bank/Ministry of Finance for CPA. 

Charles (Fritz) Weden is the Acting Division Chief, Office of Transition Initiatives (OTI) with USAID. In 2002, Mr. Weden headed 

USAID’s OTI program in Iraq. A former Senior Foreign Service 

Officer, Mr. Weden has served with USAID since 1965 in assignments that have included Assistant Director and Deputy Director 

in Egypt, Director in Yemen and Tunisia, Deputy Assistant 

Administrator in USAID’s then Near East Bureau, USAID Director 

in Indonesia, and Deputy Assistant Administrator of USAID’s Asia 

and the Near East Bureau.

*Bios are current as of April 2006.
158 I IRAQ RECONSTRUCTION: Lessons in PROGRAM AND PROJECT MANAGEMENT