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SIGIR 

Special Inspector General for IRAQ Reconstruction 

For more information, contact SIGIR Public Affairs at 

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

Summary of Report: SIGIR 10-015 

Why SIGIR Did this Study 

The U.S. government spent about $345 million 

to construct and equip primary healthcare 

centers (PHCs) in Iraq. In April 2009, the 

Special Inspector General for Iraq 

Reconstruction (SIGIR) reported that a lack of 

visibility over the PHCs’ status, together with 

operational and sustainability issues, left the 

U.S. investment at risk. SIGIR then 

recommended a study to provide transparency 

on the status of PHCs. 

In response, the Iraq Transition Assistance 

Office (ITAO), which had program management 

responsibility, stated that it had an existing 

contract with Stanley Baker Hill, LLC (SBH) to 

conduct PHC assessments which should help to 

provide transparency on the PHCs’ status. The 

U.S. Army Corps of Engineers (USACE) Gulf 

Region Division (GRD) was the contracting 

office. The objectives of this $16.5 million 

contract were to (1) identify and repair PHC 

deficiencies, (2) conduct PHC assessments, 

(3) run an operations and repair program for one 

year, (4) develop a comprehensive maintenance 

management program for the Iraqi Ministry of 

Health (MoH), (5) use automation tools to 

collect and execute maintenance, and (6) 

enhance the MoH’s operations and maintenance 

capabilities. SIGIR’s objectives for this report 

were to examine the cost, outcome, and 

oversight of the contract and to assess the status 

of the PHCs as ITAO’s responsibilities are 

transitioned to the U.S. Embassy, Baghdad. 

Recommendations & Lessons Learned 

SIGIR recommends that the U.S. Ambassador to 

Iraq direct that future engagements with the 

Government of Iraq (GOI) on health care issues 

include a focus on gaining maximum benefit 

from U.S. investments made in PHCs and the 

information gathered under the SBH contract. 

SIGIR also offers four lessons learned. 

Management Comments and Audit 

Response 

The U.S. Embassy, Baghdad concurred with our 

recommendation and plans to complete a 

reassessment of the PHC status by December 

2010. USACE stated it was concerned with 

SIGIR’s view of the contract’s deliverables as 

well as events related to this effort. SIGIR 

addressed these concerns where appropriate. 

April 29, 2010 

HEALTH CENTER SUSTAINMENT CONTRACT RESULTED IN SOME 

REPAIRS, BUT IRAQI MAINTENANCE CAPABILITY WAS NOT ACHIEVED

What SIGIR Found 

The contract’s outcomes, for certain requirements, achieved the desired result, 

but for other requirements it did not, and funds were wasted. The contract 

assessed the physical status of 109 PHCs and corrected construction and 

equipment deficiencies at 17 PHCs. However, SBH fell short in establishing a 

maintenance management program for the MoH to use to sustain the facilities 

and a management information system that the ministry could use to prioritize, 

assign and execute maintenance. About $3.9 million spent on these activities 

appears to have been wasted. Also, the ITAO goal of achieving transparency 

on the PHCs’ status and providing information on potential operational and 

sustainability concerns was not realized. 

The shortfalls in meeting some contract requirements were caused by a number 

of factors. First, the contract lacked specifics about what was to be done. For 

example, the contract did not specify how many PHCs were to be assessed or 

repaired. Second, oversight on the contract was poor. According to a senior 

SBH official, GRD instructed them to focus on repairing and assessing PHCs 

rather than on those tasks that would directly support MoH sustainment efforts. 

However, contractual documents showed that SBH was always responsible for 

meeting the sustainment requirements. Nevertheless, we found no evidence 

that GRD or ITAO ever took action to address SBH’s lack of progress in 

developing the Iraqi MoH’s capacity. Third, coordination between ITAO and 

GRD was ineffective. ITAO officials stated that after contract completion they 

made several requests for information on contract outcome but received nothing 

from GRD. GRD indicated that they conducted regular biweekly meetings 

where ITAO officials could have asked questions regarding the project. ITAO 

noted that this was one of hundreds of projects covered by these biweekly 

meetings and was not the forum to discuss projects in detail. Fourth, GRD 

contracting officials rotated frequently. As a result, some were not 

knowledgeable about the contractor’s responsibilities, and in some cases GRD 

was dependent on SBH to explain what was required and how well it was 

meeting expectations. Lastly, in some cases the GOI did not make personnel 

available for training opportunities. 

The MoH has taken ownership of the PHCs and assumed responsibilities for 

repairs. At the same time, the U.S. Health Attaché position was eliminated in 

February 2010, and ITAO will no longer exist after May 2010. Responsibility 

for health care issues will transition to the U.S. Embassy’s Economic Section 

without a clear understanding of what was accomplished under the SBH 

contract and how information developed from the contract can best be used in 

further engagements with the GOI on PHC matters. 

The situation regarding the contract’s management and the larger issue of PHC 

matters transitioning to the Embassy’s Economic Section illustrate two overall 

concerns that SIGIR has generally identified with the reconstruction effort. 

First is the ad hoc nature of the agencies that managed these programs and the 

gaps in information transfer that are created as matters transition from one 

entity to another. Second, and more importantly, is the lack of accountability 

for program results, which stems from the lack of unity of command. 
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

400 Army Navy Drive • Arlington, Virginia 22202 

April 29, 2010 

MEMORANDUM FOR U.S. AMBASSADOR TO IRAQ 

COMMANDING GENERAL, U.S. FORCES-IRAQ 

COMMANDING GENERAL, U.S. ARMY CORPS OF ENGINEERS 

SUBJECT: Health Center Sustainment Contract Resulted in Some Repairs, but Iraqi 

Maintenance Capability Was Not Achieved (SIGIR 10-015) 

We are providing this audit report for your information and use. The report discusses issues 

related to the cost, outcome, and oversight of Stanley Baker Hill’s $16.5 million sustainment 

contract for U.S.-funded primary healthcare centers (PHCs). It also discusses the status of PHC 

issues as the Iraq Transition Assistance Office’s responsibilities are transitioned to the U.S. 

Embassy, Baghdad. We performed this audit in accordance with our statutory responsibilities 

contained in Public Law 108-106, as amended, which also incorporates the duties and 

responsibilities of inspectors general under the Inspector General Act of 1978. This law provides 

for independent and objective audits of programs and operations funded with amounts 

appropriated or otherwise made available for the reconstruction of Iraq and for recommendations 

on related policies designed to promote economy, efficiency, and effectiveness, and to prevent 

and detect waste, fraud, and abuse. This audit was conducted as SIGIR Project 9019. 

The U.S. Embassy, Baghdad and the U.S. Army Corps of Engineers provided comments on a 

draft of this report, and comments are included in Appendices D and E. We considered these 

comments in preparing this report and addressed them in the report as appropriate. 

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

report, please contact David Warren, Assistant Inspector General for Audits, (703) 604-0982/ 

david.warren@sigir.mil or Glenn Furbish, Principal Deputy Assistant Inspector General for 

Audits, (703) 604-1388/ glenn.furbish@sigir.mil. 

Stuart W. Bowen, Jr. 

Inspector General 

cc: U.S. Secretary of State 

U.S. Secretary of Defense 

Commander, U.S. Central Command 

S i lI t G l f I R t ti
Table of Contents 

Introduction 1

Background 2

Objectives 4

Cost Increases Were Applied to Repairs, and Funds Targeted at MoH 

Training and Sustainment Resulted in Waste 5

Cost Increases Applied Primarily to Repairs 5

Some Benefits Achieved, but Requirements To Support MoH Maintenance 

Management Were Not Fulfilled 6

Weak Contract Specifications, Ineffective Agency Coordination, and Staff 

Turnover Led to Breakdowns in Oversight 13

Contract Lacked Specifics Needed To Determine Success 13

Coordination between GRD and ITAO on Status and Outcomes Was Ineffective 14

Frequent Turnover of Contracting Officials Led to Insufficient Oversight 15

Acquisition Justification and Other Award-related Records Were Not 

Readily Available 15

Status of PHCs’ Condition Is Unclear, but Deficiencies Exist, and the MoH 

Has Assumed Responsibility for Repairs 17

Conclusions, Recommendations, and Lessons Learned 18

Conclusions 18

Recommendations 18

Lessons Learned 18

Management Comments and Audit Response 20

U.S. Embassy, Baghdad Comments 20

USACE Comments 20

Appendix A—Scope and Methodology 21

Appendix B—Acronyms 24
Appendix C—Audit Team Members 25

Appendix D—U.S. Embassy, Baghdad Comments 26

Appendix E—U.S. Army Corps of Engineers Comments 27

Appendix F—SIGIR Mission and Contact Information 35
1 

Health Center Sustainment Contract Resulted in Some 

Repairs, but Iraqi Maintenance Capability Was Not Achieved

SIGIR 10-015 April 29, 2010

Introduction 

The U.S. government spent about $345 million to construct and equip 133 primary healthcare 

centers (PHCs) in Iraq.1

 The U.S. government contracted with Parsons Delaware, Inc., for the 

construction of these PHCs and later terminated the contract for convenience. The U.S. Army 

Corps of Engineers, Gulf Region Division (GRD) then awarded Iraqi companies follow-on work 

to complete partially constructed PHCs. The Special Inspector General for Iraq Reconstruction 

(SIGIR) reported in April 2009 that the PHC program cost substantially more, took much longer 

to complete, and produced fewer facilities than originally planned.2

 SIGIR also noted that a lack 

of visibility over the status of U.S.-funded PHCs, in conjunction with recognized operational and 

sustainment issues left the U.S. investment in PHCs at risk and subject to waste. SIGIR 

recommended that the U.S. Ambassador to Iraq and the Commanding General, Multi-National 

Forces-Iraq, direct a study to: 

1. Provide transparency on the current status of PHCs and assess the cost and benefits of 

potential actions to address identified PHC operational and sustainment problems. 

2. Identify actions the U.S. government could undertake to help ensure that the benefits 

expected from the PHC program are realized so that the investment will not be wasted. 

In its response to SIGIR’s prior report, the Iraq Transition Assistance Office (ITAO), which has 

program management responsibility for health care, concurred with SIGIR’s recommendations, 

stating that in May 2008 it had initiated a $16.5 million program with Stanley Baker Hill, LLC 

(SBH) for a PHC “maintenance and operations program that can ultimately be transferred to the 

Iraqi Ministry of Health (MoH).”3

 ITAO also stated that PHC assessments, conducted under the 

SBH contract, would provide “transparency on the status [of PHCs] and the information needed 

to calculate the potential operational and sustainability concerns.” SIGIR undertook this audit to 

assess the cost, outcome, and oversight of this contract as well as the status of plans for 

addressing PHC issues as ITAO’s responsibilities are transitioned to the U.S. Embassy, Baghdad. 

____________________ 

1

 According to U.S. Army Corps of Engineers’ comments on SIGIR’s last PHC report, all U.S. money for PHCs 

came from the Iraq Relief and Reconstruction Fund. 

2

 SIGIR 09-015, Construction of Primary Healthcare Centers Reported Essentially Complete, but Operational 

Issues Remain, 4/29/2009. 3

 The $7 million originally allocated to this contract came from the Economic Support Fund; $9.5 million was added 

later from the Iraq Relief and Reconstruction Fund. 
2 

Background 

In March 2004, the U.S. Army issued a contract to Parsons Delaware, Inc., Pasadena, 

California,4 to provide design and construction services for several sectors in Iraq, including 

building, housing, and health care. The government later issued three task orders under the 

contract to design, construct, and equip 150 PHCs throughout Iraq. 

Under this contract, Parsons was to provide three types of health care centers: Type A, a 

standard center, about 1,324 square meters; Type B, a center with teaching facilities, about 1,400 

square meters; and Type C, a center with emergency and labor facilities, about 2,126 square 

meters. The medical equipment to be installed included, among other things, X-ray equipment, 

blood analyzers, examination tables, patient beds, defibrillators, brain scan equipment, 

ventilators, and incubators. The dental equipment to be installed included dental chairs, lights, 

cabinets, instruments, and supplies. 

In June 2005, the Joint Contracting Command-Iraq/Afghanistan, which administered the Parsons 

contract, notified Parsons of design and construction concerns. In September 2005, eight PHCs 

were removed from the contract for “lack of progress.” In 2006, the contract was terminated for 

the convenience of the U.S. government, and the remaining 142 PHCs were awarded to Iraqi 

contractors for follow-on work. Between December 2006 and October 2008, GRD transferred 

the 142 PHCs in various states of completion to local Iraqi officials. However, the U.S. 

government temporarily retained legal ownership and liability for all 142, pending the 

development of a national-level transfer agreement. 

SBH provides program management support for GRD under Task Order 25 of contract 

W914NS-04-D-0021. According to GRD officials, SBH supplements GRD’s project 

management workforce. In May 2008, GRD issued Task Order 36 to SBH, a $7 million contract 

to help the Government of Iraq (GOI) sustain U.S.-funded PHCs. For this contract, ITAO was 

the program management office and provided the funds. ITAO also identified the outcomes it 

wanted from the contract. GRD was the contracting office. Task Order 36 is the subject of this 

report and hereafter is referred to as the PHC sustainment contract. 

According to a GRD contracting official, only SBH responded to the request for proposal. The 

Statement of Work for this contract notes that “sustaining this newly acquired inventory of 

facilities and the delivery of reliable and full-function support is critical to the effort of 

improving health care in Iraq.” SBH was to (1) identify and repair PHC deficiencies, (2) conduct 

PHC assessments, (3) run an operation and repair program for one year, (4) develop a 

comprehensive maintenance management program, (5) use automation tools to collect and 

execute maintenance, and (6) enhance the MoH’s operations and maintenance capabilities. 

In September 2008, ITAO added $9.5 million to this contract, mostly to assess and repair PHCs, 

bringing the total contract amount to $16.5 million. The PHC sustainment contract ended in 

September 2009, though at the time of this audit’s completion it had not been closed out. In 

November 2009, the U.S. government transferred legal ownership and liability for all 142 PHCs 

____________________ 

4

 Contract number W914NS-04-D-0006. 
3 

to the GOI, though 9 PHCs had been destroyed by insurgents, leaving only 133 functioning 

facilities.5

 Table 1 includes estimated costs of the PHC program to date. 

Table 1—Estimated Costs of the PHC Program ($US millions) 

Cost Element Cost 

Parsons Design/Build Contract $232.0

Follow-on Construction Contracts $57.0

Delivering and Installing Equipment and Training $56.0

Subtotal $345.0

SBH Operations, Maintenance, and Capacity Development $16.5 

Total $361.5

Source: SIGIR analysis of prior reports and updated data from GRD. 

Responsible Organizations 

Two U.S. government organizations had responsibilities for the PHC program: 

U.S. Army Corps of Engineers, Gulf Region Division – GRD provided planning, design, and 

construction management for military and civil infrastructure construction. GRD was a major 

subordinate command of the U.S. Army Corps of Engineers (USACE) and supported the MultiNational Force-Iraq; its successor organization, the Transatlantic Division, also a major 

subordinate command of the U.S. Army Corps of Engineers, supports the U.S. Forces-Iraq and 

was officially established on October 1, 2009. For the PHC sustainment contract, GRD provided 

contract administration and project management responsibilities, for which it charged a 6.5% fee. 

Iraq Transition Assistance Office – ITAO was created by Executive Order in 2007 and was 

directed to facilitate the transition in Iraq through programming and oversight of large-scale 

reconstruction projects. ITAO reports to the U.S. Ambassador to Iraq. For the PHC program, 

ITAO provided program scope, objectives, and funding but did not have any direct involvement 

in overseeing the PHC sustainment contract’s day-to-day implementation. Rather, ITAO 

coordinated with SBH through GRD for that purpose. ITAO also coordinated with the MoH. 

The Executive Order that created ITAO expires on May 10, 2010. 

In addition, the U.S. Embassy’s Health Attaché worked with ITAO but did not report to it on 

health issues. Rather, the Health Attaché provided advice to the U.S. Ambassador and others, 

and coordinated health programs with the Iraqi MoH. In February 2010, the Health Attaché 

position was eliminated, and the Economic Section of the U.S. Embassy, Baghdad assumed 

responsibility for engaging the GOI on health care issues. The Iraqi MoH is the end user and 

owner of the PHCs. 

____________________ 

5

 These nine PHCs were dropped between the time they were temporarily transferred to local Iraqi officials and the 

time they were legally transferred to the Government of Iraq. Hereafter we refer only to the 133 PHCs the U.S. 

transferred that were not destroyed. 
4 

Objectives 

SIGIR’s objectives for this report were to examine the cost, outcome, and oversight of the PHC 

sustainment contract and the status of PHC issues as ITAO’s responsibilities are transitioned to 

the U.S. Embassy, Baghdad. 

For a discussion of the audit scope and methodology and a summary of prior coverage, see 

Appendix A. For a list of acronyms used, see Appendix B. For the audit team members, see 

Appendix C. For the U.S. Embassy, Baghdad’s comments, see Appendix D. For the U.S. Army 

Corps of Engineers’ comments, see Appendix E. For the SIGIR mission and contact 

information, see Appendix F. 

 
5 

Cost Increases Were Applied to Repairs, and Funds 

Targeted at MoH Training and Sustainment Resulted 

in Waste 

Within the first four months of signing the PHC sustainment contract, the total contract value 

more than doubled. The majority of the increased funding was used to repair deficiencies at the 

PHCs: ultimately, 59 percent, or $9.6 million of the $16.5 million contract, was spent on repairs.6

 

Overall, the contract achieved significant assessment and repair benefits but fell short of 

enhancing the MoH workforce's capability to repair, use, and maintain the facilities. SIGIR 

estimates that about $3.9 million was wasted on activities associated with the workforce 

enhancement and support contract requirements 

Cost Increases Applied Primarily to Repairs 

GRD issued the PHC sustainment contract for $7 million in May 2008, with the goals of 

increasing visibility on the PHCs’ status and aiding the Iraqi government with PHC sustainment. 

SBH was to (1) identify and repair PHC deficiencies, (2) conduct PHC assessments (3) run an 

operation and repair program for one year, (4) develop a comprehensive maintenance 

management program, (5) use automation tools to collect and execute maintenance, and (6) 

enhance the MoH’s operations and maintenance capabilities. 

According to GRD and SBH officials, initial PHC assessments identified poor conditions at a 

number of U.S.-funded PHCs. To address this problem, in September 2008 ITAO provided 

additional funding and the contract was increased by $9.5 million, primarily to fund additional 

repairs.7

 A senior SBH official stated that from that point forward, GRD instructed them to 

focus on repairing and assessing PHCs rather than on those tasks that would directly support 

MoH sustainment efforts. A contracting officer’s representative noted that the $9.5 million was 

to be spent primarily for repairs and maintenance but also stated that SBH remained responsible 

for all requirements in the original statement of work. Other GRD officials further noted, and 

contractual documents showed, that the expanded statement of work was an extension of the 

original contract and did not relieve SBH of its obligation to support sustainment efforts. 

As of September 30, 2009, the full contract amount of $16.5 million had been approved for 

payment to SBH. Figure 1 illustrates the amounts paid for each of the key contract 

requirements.8

____________________ 

6

 Fifty-nine percent was arrived at using non-rounded figures as follows: $9,625,000.00 / $16,449,215.64 = 58.51%. 

7

 Many of the PHCs were open and operating for over a year and preventative maintenance often was not performed. 

The PHC assessments SIGIR reviewed found problems with both the original construction and maintenance. 

8

 SBH’s invoiced cost descriptions were used to allocate costs to the contract’s six main requirements. See 

Appendix A for a complete description of the audit scope and methodology. 
6 

Figure 1: PHC Sustainment Contract Costs, by Requirement 

Source: SIGIR analysis of GRD and contractor data as of September 30, 2009. 

Some Benefits Achieved, but Requirements to Support MoH 

Maintenance Management Were Not Fulfilled 

The contractor achieved certain assessment and repair results; however, it is difficult to 

determine precisely what was expected of SBH because the contract did not specify the number 

of PHCs that were to be assessed and repaired. By the end of the contract, SBH had assessed the 

physical status of 109 PHCs and corrected construction and equipment deficiencies at 17 PHCs. 

However, SBH fell short in meeting the contract requirement to establish a maintenance 

management program for the MoH to use to sustain the facilities and a management information 

system that the ministry could use to prioritize, assign and execute maintenance. The contract 

statement of work specifically notes that this effort will “assist by providing to MoH a set of 

maintenance management tools, processes, and skill sets to sustain this infrastructure well into 

the future.” Also, the ITAO goal of achieving transparency on the PHCs’ status and information 

to calculate the potential operational and sustainability concerns was not realized. 

Some Deficiencies Were Corrected 

The PHC sustainment contract’s first statement of work required SBH to “identify, prioritize, 

design and expeditiously correct...[PHC] deficiencies.” However, the contract did not specify 

the number of PHCs on which these repairs were to be conducted. The contract’s expanded 

statement of work required SBH to concentrate on repairing heating, ventilation, and air 

conditioning (HVAC) systems; water purification units; generators/electric; and biomedical 

equipment. SBH spent $9.6 million to repair these deficiencies at 17 of 133 U.S.-funded PHCs. 

According to MoH officials, these repairs were extremely helpful in improving the facilities’ 

operating conditions. 

Based on work orders submitted by SBH for work completed at the 17 PHCs, the $9.6 million 

was for the types of repairs listed in Table 2. 
7 

Table 2—PHC Repair Costs ($U.S. thousands) 

Repair Type Cost 

Facilities – Building and Interior $1,393

Water and Reverse Osmosis Treatment Systems 1,563

Plumbing and Septic System 465

Heating, Ventilation, and Air Conditioning Systems 878

Generator and Electrical Systems 3,967

Biomedical Equipment Repair, including X-ray, Dental, and Lighting 462

Fees 842

Other 55

Total $9,625

Source: SIGIR analysis of prior reports and updated data from GRD as of September 30, 2009.

Individual Assessments Were Conducted, but Transparency Was Not Provided 

SBH assessed the physical status of 109 PHCs in response to the requirement that it conduct a 

“thorough initial inspection of all targeted facilities/equipment.” These assessments included the 

PHCs’ equipment and other needs. The total cost of the assessments was $1.2 million. 

According to GRD officials, SBH could not assess the remaining 24 PHCs due to security 

concerns. At the end of the contract, MoH received both paper and electronic copies of the 109 

assessments. The contract did not require SBH to provide information summarizing the results 

of its assessments. However, in responding to SIGIR’s previous report on PHCs, ITAO said that 

the contract would provide transparency on the status of the PHCs. Although GRD officials 

indicated that the individual PHC assessments provided transparency, as of the end of our 

fieldwork, neither ITAO nor GRD officials had information that summarized whether the 

facilities are open and operating at their intended capabilities and the extent to which 

maintenance deficiencies needed to be addressed 9

SIGIR summarized 40 of the 109 assessments and noted general deficiencies in the PHCs’ 

facilities and equipment. However, since many of these PHCs had been occupied, used, and 

repaired by the MoH during the years prior to the assessments, we could not separate original 

construction deficiencies from poor maintenance and repairs. In fact, the 40 assessments SIGIR 

summarized appeared to indicate problems with both. 

SIGIR’s review of the data noted certain facility deficiencies.10 For example, 26 of 40 

assessments we reviewed indicate that the PHCs’ HVAC systems had major deficiencies or were 

not functioning. We considered a major HVAC deficiency as one or more of the typical six 

____________________ 

9

 For purposes of this audit report, SIGIR is defining “status” of PHCs as the extent of deficiencies that exist at the 

133 U.S.-built PHCs as well as the number of these facilities that are open and operational. 10 See Appendix A for SIGIR’s scope and methodology for summarizing PHC deficiencies. Since assessments were 

performed as long as two years after PHCs were open and operating, SIGIR did not identify whether deficiencies 

were a function of poor construction or a lack of maintenance. 
8 

HVAC units not operating. Not functioning meant none of the six HVAC units were 

functioning. 

We also noted that 15 of the 40 PHCs had sewage systems that were not functioning or had 

major deficiencies. A major deficiency was one or more of the lavatories not operating or a 

severe odor in the clinic that significantly affected operations. Not functional meant that none of 

the PHC’s lavatories were operating or the sewage system was completely blocked. Table 3 

provides a summary of SIGIR’s review of the PHC facility assessments. 

Table 3—PHC Facility Assessments Data 

Facility Element 

No Noted 

Deficiencies 

Minor 

Deficiencies 

Major 

Deficiencies/ 

Partially 

Functional Not Functional 

Physical Structure 1 33 5 1 

Plumbinga 1 19 18 0 

Sewageb 9 14 11 4 

Electricalc 1 26 10 0 

HVACd 3 8 19 7 

Source: SIGIR Analysis of SBH Assessments as of September 30, 2009. 

Notes: 

a SBH did not inspect plumbing systems at two of the selected PHCs. 

b

 SBH did not inspect sewage systems at two of the selected PHCs. 

c

SBH did not inspect electrical systems at three of the selected PHCs. 

d

 SBH did not inspect HVAC systems at three of the selected PHCs. 

SIGIR also noted similar deficiencies at multiple facilities. For example, 27 of 40 assessments 

stated that the PHCs’ water purification unit was not working. According to an SBH official, the 

PHCs’ water purification units were designed to refill a facility’s water storage tanks once per 

day. However, this is not possible without providing electricity to the water purification units for 

24 hours a day. Since few PHCs receive more than a few hours of electricity per day, local staffs 

often bypassed the water purification units and instead pumped raw city water into the PHCs’ 

tanks. GRD noted that the MoH agreed to provide electrical connections to every PHC.11 Even 

where electricity is not a problem, local staffs are not trained to operate and maintain the water 

purification units. As a result, only 2 of the 40 PHCs had a water purification system without 

any defects, which could create health hazards if raw water is used for medical purposes. As two 

more examples, 11 PHCs lacked functioning X-ray equipment and 8 lacked functioning dental 

equipment, even though the U.S. had purchased this equipment for every PHC constructed. See 

Table 4 for a summary of PHC equipment assessments. 

____________________ 

11 Most of the 40 PHC assessments that SIGIR reviewed showed that the PHCs were connected to local electrical 

grids but often had only a few hours of electricity during the day. 
9 

Table 4—PHC Equipment Assessments Data 

Equipment 

No Noted 

Deficiencies 

Minor 

Deficiencies 

Major 

Deficiencies/

Partially 

Functional 

Not 

Functional Missing 

Water Purification 

Unitsa 2 4 5 27 1 

Generatorsb 5 25 5 3 0 

Dental Equipmentc 6 5 16 8 0 

X-ray Equipmentd 6 7 7 11 4 

Source: SIGIR Analysis of SBH Assessments as of September 30, 2009. 

Notes:

a SBH did not inspect the water purification unit at one of the selected PHCs. b SBH did not inspect generators at two of the selected PHCs. c SBH did not inspect dental equipment at five of the selected PHCs.

d SBH did not inspect X-ray equipment at five of the selected PHCs. 

In addition to the equipment deficiencies in Table 4, few PHCs had functioning telephones or 

working fire alarm systems and many lacked a reliable water supply from their municipal 

governments. According to a GRD official, the MoH had committed to connecting each PHC to 

the municipal system. SIGIR noted in our review of the assessment reports that most PHCs were 

hooked up to the municipal water supply, but water did not always flow. Moreover, Iraqi 

officials stated that the shielding for the X-ray equipment installed under the original Parsons 

contract was insufficient, leading to radiation leakages. They stated that this remains a problem 

at all U.S.-funded PHCs except for the 17 that SBH repaired. Further, the assessments note that 

PHC staffs conducted little or no maintenance on the PHCs or their equipment prior to SBH’s 

inspections. As a result, many generators, dental chairs, X-ray machines, and water purification 

units were experiencing problems related to inadequate or inappropriate maintenance. 

The individual assessments contained a significant amount of information on the deficiencies and 

the operational status of PHCs, but the contract did not require a summary of the assessments or 

deficiencies. Given the amount of information in each of the 109 PHC assessments, a summary 

of the operational status and deficiencies of each would have been helpful to ITAO and the U.S. 

Health Attaché. Although a MoH official indicated that the individual assessments are useful to 

the GOI, without a summary, neither GRD or ITAO officials we interviewed knew how many 

U.S.-funded PHCs were open or the extent of deficiencies. 

Call Center Was Maintained but Not Used As a Training Ground for MoH Engineers 

The PHC sustainment contract’s statement of work required SBH to “set up and execute, a... 

maintenance management facility operations, and repair program” for up to one year, and GRD 

paid SBH over $800,000 to meet this requirement. It was also expected that MoH engineers 

would participate in and ultimately manage the center on their own. In response, SBH set up and 

operated a PHC maintenance call center at GRD offices and staffed it with two employees. SBH 

provided PHC staff with call center contact information and instructions on how to call the 

center as problems arose. An SBH official noted that over 1 year of operations, the call center 
10 

received about 30 calls. MoH officials noted that due to security and access issues, MoH 

engineers did not participate in the call center’s operations. GRD officials noted that another 

reason the MoH engineers did not participate in call center operations was because they had 

requested but did not receive a stipend for working at the center. At the end of the contract, SBH 

had maintained the call center as required, but MoH personnel did not gain call center operating 

experience. We found no evidence that GRD or ITAO ever took action to address SBH’s lack of 

progress in developing a call center. However, we also note that developing Iraqi call center 

experience required cooperation from the GOI as well, which was limited. 

Funds Used to Develop a Maintenance Management Program Were Largely Wasted 

The contract statement of work required SBH to “develop a comprehensive Maintenance 

Management Program to sustain [the PHCs].” This effort was to include “generic work plans, 

spare parts lists, preventive maintenance procedures” and other elements of a comprehensive 

program to help MoH sustain its health care facilities well into the future. An SBH official 

stated its operation of a hosted maintenance management system for one year met this 

requirement, and that GRD’s instructions to focus on assessing and repairing PHCs diminished 

the importance of a Maintenance Management Program. Yet, GRD officials stated, and 

contractual documents showed, that SBH remained responsible for all contract requirements. 

Other GRD contracting officials we spoke with were largely unaware this requirement existed 

and therefore did not ensure the program was developed. 

GRD did provide the MoH with some limited maintenance management materials at 17 PHCs, 

including Arabic language maintenance manuals for medical and facilities equipment, sitespecific work plans, spare parts lists and some tools. However, in the end, GRD provided SIGIR 

with no evidence of a “comprehensive” maintenance management system as required by the 

statement of work. Thus, it is uncertain what this $1.5 million program actually achieved besides 

providing MoH with limited maintenance management materials. 

Funds Expended To Develop Automated System to Manage PHC Maintenance Were Wasted 

SBH efforts to develop an information management system were also unsuccessful. GRD spent 

$2.4 million on this requirement, and this money was largely wasted. 

The contract statement of work required SBH to “use appropriate automation tools to establish a 

centralized collection point to prioritize, assign and execute...maintenance” and required that the 

planning be done “in partnership with the MoH.” However, SBH did not develop a system that 

the MoH wanted or used. SBH officials stated that it based its plan on the MoH’s request for a 

“state-of-the-art” operations and maintenance system. While SBH could not provide 

documentation for this request, it noted that its plan for implementing these automation tools was 

clearly outlined in its technical proposal, which we confirmed. To select these computer 

programs, SBH officials stated it consulted with the U.S. Army and Navy health services. Both 

SBH and MoH officials stated that MoH was not consulted before SBH selected specific 

systems. In addition, we found no evidence that SBH considered MoH’s current maintenance 

system, organizational infrastructure, or technical or funding capabilities to determine what MoH 

would need to run a state-of-the-art system. 
11 

Absent such coordination and analysis, SBH stated that it set up a “world-class,” internet-based 

maintenance tracking system comprising three computer programs12 and attempted to train MoH 

officials at the call center at GRD’s Baghdad office. SBH’s system relied on a single collection 

point for individual PHCs and other medical facilities accessing the internet to report facility 

status and needed repairs. However, this approach failed for several reasons. First, many PHCs 

do not have communication systems to access an internet-based maintenance management 

system.13 Second, as noted earlier, SBH’s attempts to encourage MoH engineers to participate in 

training at the call center did not materialize because of security conditions and concerns over 

stipend payments. The two Iraqi engineers selected for training on this system ultimately 

stopped attending training at the site, and SBH did not effectively address the issue. 

An SBH official stated that it orally offered MoH officials the opportunity to lease the hardware 

and software beyond the contract period, but MoH officials declined. However, according to 

MoH officials we interviewed neither the U.S. government nor SBH offered to transfer this 

system to the GOI. In addition, SBH officials stated that all hardware and software used for this 

requirement was either leased or owned directly by SBH or related entities and that it was 

therefore not left with MoH. According to an SBH official, the internet-based system they set up 

was never intended to be transferred to the GOI. Rather, it was intended only as a demonstration 

of systems used to manage large, health care networks. SBH noted that it provided GRD the raw 

data from the internet-based system; however, without the hardware and software to run it, this 

data was not usable. At the end of the contract MoH was left without any automation tools and 

without an improved maintenance management system. 

As SIGIR has reported previously, a key lesson learned is that project success is enhanced by 

designing and implementing reconstruction projects that are in keeping with the host 

government’s level of capacity. Absent doing that, a project likely will not be sustained or even 

used, and U.S. tax dollars could be wasted. In this case, the U.S. government contracted to 

provide capacity development to the Iraqis without considering Iraqi needs or limitations. At the 

end of the contract, the automation requirements were not achieved, and $2.4 million in funds 

expended on this requirement were wasted. 

Enhancement of MoH Operations and Management Capabilities Was Only Partially Achieved 

The PHC sustainment contract’s statement of work required SBH to “enhance existing 

operations and management capabilities of the MoH workforce,” and SIGIR estimates that SBH 

spent $0.4 million to meet this requirement. Our analysis indicates that the training conducted 

was limited; therefore, the goal was only partially achieved. In comments to a draft of this 

report, GRD noted that all training under this contract was to be on-the-job. 

SBH did train Iraqi staff on facilities maintenance and operations at the 17 repaired PHCs and 

provided MoH several manuals for medical and facility equipment. SBH also set up one mobile 

vehicle containing medical equipment for MoH to use in training its maintenance personnel. 

____________________ 

12 An SBH official stated it used Maximo, Primavera, and VFA software for this requirement. 13 For the 40 PHC assessments SIGIR reviewed and summarized, telephone or communication system inspections 

were performed at only 17 PHCs. For these 17 PHCs where communications systems were inspected, 15 had no 

visible telephones or communication systems and 2 had communication systems that were non-functional. 
12 

As previously noted, SBH also set up two computers at GRD facilities where MoH officials were 

to conduct on-the-job training on both call center activities and on the internet-based system, but 

security and other issues prevented MoH participation. SBH attempted to meet the workforce 

enhancement requirement; however, after it was clear that MoH officials would not come to the 

chosen location, neither GRD nor SBH arranged for an alternate facility. Even after MoH 

officials were no longer being trained on it, SBH continued to operate the computer system. This 

contract provided an opportunity to train MoH facility and medical equipment technicians, but 

due to poor oversight, this opportunity was missed. According to one MoH official, “We 

expected an operations and maintenance training contract but only got the operations portion, not 

the maintenance training.” Consequently, the requirement to enhance maintenance was not met. 

According to MoH officials, training remains their greatest need in terms of sustaining the U.S.-

funded PHCs, as well as the GOI’s larger health care network. MoH officials stated that most 

PHC staffs still do not know how to maintain the more complicated equipment. Consequently, 

some of it is not working, and MoH does not have the expertise to fix it. As indicated above, 

SIGIR noted that the same issues appeared in SBH’s PHC assessments. For example, many 

dental chairs were not installed properly. While SBH fixed dental chairs in the 17 PHCs they 

repaired, many chairs in the other U.S.-funded PHCs remain improperly installed. Without 

additional training, local staffs generally do not have the knowledge to repair them. The 

assessments we reviewed also noted a lack of maintenance on generators and water purification 

units. In several PHCs, the local staffs were not using the X-ray machines because they did not 

know how to operate them. In those PHCs that have staff who can operate the X-ray machines, 

most do not have the expertise to repair equipment. 
13 

Weak Contract Specifications, Ineffective Agency 

Coordination, and Staff Turnover Led to Breakdowns 

in Oversight

Overall, the PHC sustainment contract suffered from a lack of specific deliverables, poor 

oversight, ineffective coordination between ITAO and GRD, and the high turnover of GRD 

oversight personnel. Additionally, the GOI did not always make sufficient personnel available 

for training. In the end, the contract largely focused on repairs to high-priority PHCs, and little 

attention appears to have been paid to developing the MoH’s capacity to maintain the facilities 

after turnover. Even though the contract was not meeting certain of its requirements, we found 

little evidence that GRD or ITAO took action to address the deficiencies. Moreover, 

coordination between GRD and ITAO was ineffective as illustrated by ITAO statements that 

GRD did not provide requested contract project information, and GRD’s position that ITAO 

never brought problems to its attention. SIGIR has previously noted that when program 

management and contracting offices reside in different agencies, unity of command, program 

accountability, and program results can suffer. Further, GRD contracting officials changed 

frequently, and some were not sufficiently knowledgeable about the contract’s requirements. 

Last, acquisition justification and other award-related documents were not readily available at 

the time of our review leaving us unable to determine the basis for acquisition and award. 

Contract Lacked Specifics Needed To Determine Success 

Although the PHC sustainment contract included operations, maintenance, and capacity 

development requirements, it did not “clearly describe all services to be performed or supplies to 

be delivered”.14 According to the statement of work, SBH was to conduct a “thorough initial 

inspection of all targeted facilities/equipment”, but the statement of work does not specify which 

facilities or equipment were targeted. Ultimately, SBH assessed 109 PHCs. Both GRD and 

SBH officials agree that security conditions kept SBH from assessing the remaining U.S.-built 

PHCs. The statement of work also requires SBH to “correct and repair structural, primary and 

secondary system deficiencies that impede recently commissioned medical facilities,” but it does 

not indicate how many facilities SBH was required to repair. Overall, it appears that this 

contract was driven by the funds available, rather than by the need to accomplish specific 

maintenance goals. This situation left no basis upon which to assess SBH’s accomplishments 

against specific requirements. SBH ultimately conducted repairs at 17 PHCs. Both ITAO and 

GRD officials indicated it was generally understood that the funds available for repair were 

insufficient to cover all 133 PHCs and that SBH was to repair as many of the 17 high-priority 

PHCs as possible. However, this was not stated in the contract nor was the contract ever 

modified to identify this goal. 

____________________ 

14 See Federal Acquisition Regulation 16.505(a) (2), which specifies requirements for orders under indefinite 

delivery contracts. We understand that the contract under which Task Order 36 was issued was an indefinite 

delivery/indefinite quantity contract. 
14 

Coordination between GRD and ITAO on Status and Outcomes 

Was Ineffective 

ITAO was the program manager responsible for the U.S. efforts to improve the health care 

system in Iraq, while GRD was the contracting office responsible for ensuring that SBH met the 

contract’s requirements and for providing day-to-day SBH oversight. The two entities, although 

belonging to separate agencies, were expected to work in a coordinated manner to ensure SBH 

met the contract’s requirements. SIGIR has previously reported on problems that can arise from 

a lack unity of command between the program and contract management offices, and such 

problems materialized in the case of this contract. Specifically, ITAO officials said that GRD 

did not provide it with accurate and timely information on the problems and successes of SBH’s 

performance.15 As a result, they stated that they were unaware of the contract’s status and final 

outcome and did not have the information necessary to intervene and make adjustments. In 

response to our draft report, USACE provided documentation of some coordination between 

itself and ITAO. In particular, USACE provided examples of Weekly Health Sector Update 

slides that included information on the PHC contract. GRD also stated that it provided ITAO 

weekly project updates, but according to the Embassy, these meetings covered hundreds of 

projects. Thus project status could not be discussed in detail. 

However, in May 2009—eight months after MoH personnel stopped coming to SBH’s training 

sessions—GRD briefed ITAO that the sustainment contract would provide the MoH with 

“maintenance management training.” In the same briefing, GRD stated that SBH would “deploy 

a computerized maintenance management system” and provide “tools and processes to support 

the entire MoH system” and “other Iraq Ministries.” This briefing took place four months before 

the end of the contract when it was apparent that none of these goals would be met. 

In addition, ITAO and Health Attaché officials stated that they repeatedly asked GRD to provide 

a briefing on the contract’s final status. However, other than the biweekly briefings that covered 

all projects, ITAO indicated they received only one briefing specifically on the SBH contract in 

the last 12 months of the contract. That briefing was held in May 2009, as noted above. The 

contract ended in September 2009. In November 2009, GRD provided ITAO with thousands of 

files related to work done under the contract. However the files did not include a summary of 

the PHC assessments or a final briefing on the contract’s outcome. As recently as February 

2010, an ITAO official requested that GRD provide a final briefing on the contract, including a 

summary of the PHCs’ status, but at the time this report was issued GRD had not provided the 

requested briefing. 

GRD officials did not agree that their coordination with ITAO or the Health Attaché was poor. 

According to one official, it held regular biweekly Program Management Review Board 

Meetings that both ITAO and the Health Attaché were invited to. GRD noted that if ITAO had 

questions on PHC project status, they could have asked those questions. ITAO said these 

briefings covered hundreds of projects and did not provide the more detailed information they 

desired about the contract’s outcomes. The differing views between ITAO and GRD regarding 

____________________ 

15 USACE’s policies, set forth in its Project Management Business Process, require project managers to 

communicate with the customer, who in this case was ITAO. 
15 

the responsiveness and usefulness of their information sharing illustrate the ineffective 

coordination between the two activities. 

Frequent Turnover of Contracting Officials Led to Insufficient 

Oversight 

Frequent turnover in contracting officers and contracting officers’ representatives led to 

insufficient oversight of SBH activities and made the funds vulnerable to waste and abuse. The 

turnovers created a situation in which GRD was dependent on SBH to explain what was required 

and how well it was meeting expectations rather than GRD providing the oversight necessary to 

ensure that SBH met contract specifications. 

GRD staffed the PHC sustainment contract with six different contracting officers over the 16-

month performance period. Contracting authority shifted back and forth among these six 

officials and between GRD offices in Baghdad and the U.S. SIGIR interviewed the three key 

contracting officers and found that they had little or no knowledge about the contract’s terms. 

One contracting officer did not know what deliverables were required under the contract and 

asked us to identify them. In addition, the contracting officers we spoke with did not know 

whether SBH’s technical proposal was included as a part of the contract. 

During the 16-month contract period, contracting officer representatives also had a high turnover 

rate, with four different representatives during that period. One contracting officer representative 

stated that his knowledge of the contract’s deliverables came mostly from SBH. As a result of 

this lack of knowledge, the contracting officer representative was unlikely to be able to 

determine whether SBH was meeting the contract requirements. 

The Army has recognized that their expeditionary contracting workforce is not adequately 

staffed, trained, or structured and that such conditions constitute a material weakness in their 

operations. However, the Army has recently taken steps to address the inexperience of personnel 

to oversee contracts in Iraq. On March 2, 2010, the U.S. Army Vice Chief of Staff addressed the 

lack of trained personnel to assist in the technical monitoring and/or administration of contracts, 

which are critical to its success in Iraq. He instructed Army commanders to nominate and train 

contracting officer representatives and other oversight personnel prior to deployment to Iraq. 

This includes identifying and nominating contracting officer representatives that have experience 

with the contract activities that they will oversee. He also instructed contracting officials to 

review their representatives’ qualifications and training, and to monitor their performance in 

overseeing contracts. 

Acquisition Justification and Other Award-related Records Were 

Not Readily Available 

Acquisition justification and other award-related documents were not readily available at the 

time of our review. Specifically, to determine the justification for acquisition and the 

reasonableness of the contract amount we requested contract award documentation from three 

contracting officers. However, all three stated that they did not have any award files. After 

completion of our fieldwork, and in response to our draft report, GRD provided some award-
16 

related documents that SIGIR requested, including the request for proposal, SBH’s technical 

proposal, and the government’s independent evaluation of SBH’s proposal. Since these and 

other key award documents were not readily available at the time of our audit we were unable to 

determine the basis for acquisition and award. We will review this information and report 

separately to the extent we identify any areas of concern. 
17 

Status of PHCs’ Condition Is Unclear, but Deficiencies 

Exist, and the MoH Has Assumed Responsibility for 

Repairs

The PHC sustainment contract did not provide for the “transparency on the status [of U.S.-

funded PHCs]” ITAO originally intended. However, the assessments GRD provided to ITAO 

and MoH offer useful information on the PHCs’ conditions and existing deficiencies. MoH 

officials reported that despite these deficiencies, all but 4 of the 133 PHCs are open. MoH 

officials stated that insufficiently trained PHC staff remains its greatest sustainment challenge. 

Nonetheless, the MoH has already assumed full responsibility for U.S.-funded PHCs, and 

according to MoH officials, the Ministry plans to repair and maintain all U.S.-funded PHCs, 

provided it can execute its budget. In May 2010, the Executive Order that created ITAO will 

expire, and the U.S. Embassy’s Economic Section will take over responsibility for issues related 

to the PHCs. 

Transition of PHCs to Iraqi Government 

In early 2009, the national-level MoH authorized regional-level offices to conduct maintenance 

on U.S.-funded PHCs, although only enough to keep them open and operating. According to a 

MoH official, the MoH decided to delay more substantial repairs until it was clear that the 

United States would not maintain any more PHCs under the SBH contract. In November 2009, 

the Iraqi Ministry of Planning and Development and the U.S. Embassy signed a Memorandum of 

Understanding that transferred full legal authority for all U.S.-funded PHCs to the GOI. Since 

the PHC sustainment contract ended in September 2009, and since the GOI has assumed full 

legal authority for all U.S.-funded PHCs, the MoH has developed plans to repair and maintain 

them, according to MoH officials. 

As of February 2010, Iraqi officials stated that 129 of the 133 PHCs that the United States 

transferred are open to the Iraqi public. In comments on SIGIR’s April 2009 PHC report, ITAO 

stated that it, along with the Health Attaché, would use PHC assessments to “make 

recommendations to the MoH for capacity development and sustainability initiatives using GOI 

or, if available, U.S. or other donor funds.” However, in February 2010, the U.S. Embassy 

eliminated the Health Attaché position, and responsibility for health care issues was moved to 

the Embassy’s Economic Section. Moreover, on May 10, 2010, the Executive Order that created 

ITAO will expire. In February 2010, ITAO officials stated that they do not plan to spend 

additional U.S. funds on the PHC program.16 Consequently, no final assessment will be made to 

determine exactly what the substantial investment in the PHC reconstruction effort achieved. 

____________________ 

16 In a subsequent meeting, an ITAO official indicated that an exception to this statement may be made. He noted 

that ITAO was in the planning stage to provide funding to remediate leakage of radiation from X-ray rooms in 

PHCs. He did not think expenditures for these repairs would be significant. Neither a solicitation nor a contract has 

been issued for this work as of March 2010. 
18 

Conclusions, Recommendations, and Lessons Learned 

Conclusions 

The U.S. government achieved some benefits under the PHC contract, principally through 

repairs to 17 of the 133 clinics. However, the contract requirement to enhance Iraq’s 

maintenance capability was not met. Also the transparency on the PHCs’ status and information 

on operational and sustainability concerns that ITAO said would be provided by the contract was 

not realized. The primary reasons certain contract requirements were unfulfilled were weak 

contract management and oversight caused by the lack of specific contract requirements, 

ineffective coordination between GRD and ITAO, and the frequent turnover of GRD contracting 

personnel. Also, the GOI did not always make personnel available for training as agreed. These 

factors resulted in MoH’s operations and maintenance capabilities not being enhanced as planned 

and the apparent wasteful expenditures of about $3.9 million on contract activities to develop 

those capabilities. 

The MoH has taken ownership of the PHCs and assumed responsibilities for repairs. On the 

U.S. side, the U.S. Health Attaché position was eliminated in February 2010, and ITAO will no 

longer exist after May 2010. The health care portfolio will transition to the U.S. Embassy’s 

Economic Section without a clear understanding of what was accomplished under the SBH 

contract and how information developed from the contract can best be used in further 

engagement with the GOI on PHC matters. 

The situation regarding the PHC sustainment contract’s management and the larger issue of PHC 

matters transitioning to the Embassy’s Economic Section illustrates two overall concerns that 

SIGIR has identified with the reconstruction effort. First is the ad hoc nature of the agencies that 

managed these programs and the gaps in information transfer that are created as matters are 

transitioned from one entity to another. Second and more importantly, is the lack of 

accountability for program results, which stems from the lack of unity of command. 

Recommendations 

SIGIR recommends that the U.S. Ambassador to Iraq direct that the overall strategies and plans 

for continuing engagement with GOI on health care issues include a focus on gaining the 

maximum benefit from the U.S. investment in the PHCs and the information gathered under the 

SBH contract. 

Lessons Learned 

Because this contract is complete and the PHCs have been transferred to the GOI, SIGIR is not 

making recommendations to address a number of issues related to the contract’s overall 

management. Rather, SIGIR provides the following lessons learned that should be useful to 

agencies involved in implementing reconstruction programs during a contingency operation. 

1. The lack of unity of command between agencies responsible for contract program 

management and oversight, the ad hoc nature of agencies responsible for reconstruction 
19 

programs, and frequent transitions of program management responsibility from one 

organization to another create gaps in program management continuity that can adversely 

affect overall program results. 

2. When program and contracting offices for a given project are in different agencies, 

communication and cooperation between them may be hindered, potentially leading to waste. 

A lack of unity of command contributes significantly to a lack of accountability for program 

results. 

3. Sound contract management and oversight are crucial for successful execution of 

contingency contracting activities, and the U.S. Army Vice Chief of Staff recently reinforced 

the need for leaders and contracting officials to nominate and train personnel prior to 

deployment. In particular, contracting officials must be knowledgeable about a contract’s 

terms so that they can enforce contractors’ compliance. In addition, program managers and 

contracting officials must confirm that the contract will fulfill the program office’s needs 

prior to contract issuance. 

4. Communication and coordination with the host government before, during, and after 

reconstruction projects will increase the likelihood that needed contract modifications are 

made on a timely basis and intended transition benefits are achieved. 
20 

Management Comments and Audit Response 

In preparing this report, SIGIR considered written comments from the U.S. Embassy, Baghdad 

and the U.S. Army Corps of Engineers. Their complete comments are included in Appendices D 

and E. 

U.S. Embassy, Baghdad Comments 

The U.S. Embassy, Baghdad concurred with our recommendation, adding that it will continue 

efforts to implement it. The Embassy also noted that, while there were biweekly program review 

meetings between ITAO and USACE, those meetings covered hundreds of projects, including 

this contract. Thus, project status could not be discussed in detail. 

USACE Comments 

No recommendations were directed to USACE. USACE provided comments for SIGIR’s 

consideration as well as additional documentation. In its comments, USACE stated that it still 

has concerns with SIGIR’s interpretation of the intent and deliverables of this contract, as well as 

events related to it. For example, USACE disagrees that the contract did not provide the 

transparency intended. This report reflects the USACE comments as appropriate, and SIGIR’s 

specific response to each comment is contained in Appendix E. Two key points raised by 

USACE and our response are summarized below. 

First, SIGIR still believes that ITAO’s goal of achieving transparency on the PHCs’ status was 

not realized. As noted in this report, without a summary of SBH’s assessments, neither ITAO 

nor GRD officials used the available assessment information to determine the status of U.S.-

funded PHCs. The summary could provide important information, such as whether the facilities 

are open and operating at their intended capabilities, and the major maintenance issues that need 

to be addressed. 

Second, USACE stated that the report does not reflect the efforts it made or the challenges it 

encountered. For example, USACE disagreed that coordination between GRD and ITAO was 

ineffective, noting that it sent ITAO Weekly Health Sector Updates and attended biweekly 

project updates. This report includes this information, as well as the Embassy point that these 

biweekly meetings covered hundreds of projects. Thus projects status could not be discussed in 

detail. We believe these differing views illustrate our point regarding the ineffective nature of 

coordination. 

 
21 

Appendix A—Scope and Methodology 

Scope and Methodology 

In June 2009, the Special Inspector General for Iraq Reconstruction (SIGIR) initiated Project 

9019 to examine the cost, outcome, and oversight of Stanley Baker Hill’s (SBH’s) $16.5 million 

primary healthcare center (PHC) sustainment contract. In addition, SIGIR examined the status 

of PHC issues as the Iraq Transition Assistance Office’s (ITAO) responsibilities are transitioned 

to the U.S. Embassy, Baghdad. SIGIR performed this audit under the authority of Public Law 

108-106, as amended, which also incorporates the duties and responsibilities of inspectors 

general under the Inspector General Act of 1978. SIGIR conducted its work from June 2009 

through March 2010 in Baghdad, Iraq. 

To determine the cost of the contract, SIGIR obtained and analyzed relevant financial and other 

data from the Gulf Region Division (GRD) contracting office. We also examined detailed SBH 

information, including invoices and work orders, on how the $16.5 million was spent. To 

allocate PHC sustainment contract costs by requirement, we used SBH’s last invoice for Task 

Order 36. Using SBH’s descriptions for how it billed costs under the contract, we allocated 

those costs to the contract’s six main requirements. We then verified this allocation with the 

contracting officer. To allocate costs by category for the 17 PHCs repaired, we used SBH’s 

work orders, which contained repair price estimates. Using these estimates and their 

accompanying descriptions, we allocated costs to one of the seven categories of repairs—water 

supply and reverse osmosis equipment; generator and electrical; heating, ventilation, and air 

conditioning; the facilities’ structure; plumbing; biomedical equipment; and other. We also 

discussed the cost allocation with SBH officials. 

To determine the outcome of the contract, SIGIR obtained and analyzed relevant data from the 

GRD contracting office, including the base contract and all of its modifications and SBH’s 

technical proposals. SIGIR also interviewed GRD contracting officials and reviewed additional 

documents and data from the Army Corps of Engineers, GRD (now the Transatlantic Division). 

Officials at GRD included contracting officers, contract managers, and contracting officer 

representatives. We visited the Army Corps of Engineers-Baghdad in December 2009. We then 

compared the contract’s requirements against what was delivered as identified by GRD, SBH, 

and Iraqi officials. We also interviewed officials from ITAO and the U.S. Health Attaché and 

officials from the Ministry of Health (MoH) and the MoH Inspector General’s office. 

To determine the adequacy of contract management and oversight, SIGIR obtained and analyzed 

relevant contract documents. We also interviewed officials in the GRD contracting office, 

including contracting officers, contract managers, and contracting officer representatives. We 

asked all officials about the contract’s parameters and deliverables. We also asked about specific 

contract management and oversight activities. In addition, we interviewed program management 

office officials from ITAO and the U.S. Health Attaché. Further, we reviewed relevant portions 

of the Federal Acquisition Regulation. Since acquisition justification and other key awardrelated documents were not readily available at the time of our review, we were unable to 

determine the basis for acquisition and award. 
22 

To determine the status of PHC transition issues, SIGIR interviewed officials from the Iraqi 

MoH and various organizations and officials in the U.S. Embassy including ITAO and the Health 

Attaché. To determine the type of information contained in the PHC assessments, we obtained 

SBH’s assessment data for the 109 PHCs that it inspected. Of these, SBH stated that it fully 

renovated 17, which left 92 PHCs that SBH assessed but did not repair. SIGIR judgmentally 

selected 40 of these 92 assessments to review and develop summary data. Our judgmental 

selection was intended to produce a cross section of PHCs based on four factors, including the 

PHC’s province, PHC type, the GRD division, and the type of assessor (expatriates, Iraqis, and 

subcontractors). 

SBH assessed various construction and equipment elements for each PHC. SIGIR summarized 

nine of these elements by assigning SBH's comments to one of five categories depending on the 

nature of the comments. Those categories were (1) No noted deficiencies – operating as 

designed with no deficiencies noted by SBH; (2) Minor Deficiencies – operating as designed or 

very close, but containing minor deficiencies; (3) Major Deficiencies/Partially Functional – not 

operating as designed or containing major deficiencies or health risks; (4) Not functional – not 

working at all; (5) Equipment or element missing. SIGIR did not characterize the medical 

functionality of these facilities. Rather, we summarized SBH’s assessments of the PHCs' 

construction and equipment, highlighting whether or not the individual physical systems operate 

as designed. 

The audit was conducted in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Use of Computer-processed Data 

We did not use computer-processed data in this report. Cost data was provided by the 

contracting office and SBH and included invoices, payment authorizations, and work orders. 

Internal Controls 

We identified and reviewed internal controls used in managing and administering the contract. 

Our review included controls related to the contract award and program management oversight. 

To conduct this review, we examined documents in the contract file such as work orders and 

invoice approvals and held discussions with key oversight officials for insight on internal 

controls. We did not examine SBH’s internal management and financial controls. We presented 

the results of our review in the body of this report. 
23 

Prior Coverage 

We reviewed the following SIGIR reports: 

Construction of Primary Healthcare Centers Reported Essentially Complete, but Operational 

Issues Remain, SIGIR 09-015, 4/29/2009. 

Applying Iraq’s Hard Lessons to the Reform of Stabilization and Reconstruction Operations, 

February 2010. 
24 

Appendix B—Acronyms 

Acronym Description 

GOI Government of Iraq 

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

ITAO Iraq Transition Assistance Office 

MoH Ministry of Health 

PHC primary healthcare center 

SBH Stanley Baker Hill 

SIGIR Special Inspector General for Iraq Reconstruction 

USACE U.S. Army Corps of Engineers 

 
25 

Appendix C—Audit Team Members 

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

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

Reconstruction. 

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

Mohamed Abdou 

Walter Franzen 

Richard Kusman 

J.J. Marzullo 

Nancee K. Needham 
26 

Appendix D—U.S. Embassy, Baghdad Comments 
27 

Appendix E—U.S. Army Corps of Engineers Comments 

 
28 

USACE Comment 1

SIGIR Response: As noted in the report, neither ITAO nor GRD officials used the available 

assessment information to determine the status of the 133 U.S.-funded PHCs, including the 

extent of deficiencies and the number of those open and operational. Consequently, we continue 

to believe that ITAO’s goal of achieving transparency on the PHCs’ status was not realized. 

USACE Comment 2

SIGIR Response: As noted in the report, we agree that SBH remained responsible for all 

requirements in the original statement of work. However, we also noted the contractor’s 
29 

statement that GRD officials instructed it to focus on repairing and assessing PHCs. In addition, 

one of the contracting officer’s representatives we interviewed only knew about the requirements 

to assess and repair PHCs, and did not enforce any other requirements. 

USACE Comment 3

What SIGIR Found, Second Paragraph: “Third, coordination between ITAO and 

GRD was ineffective. ITAO officials said that they requested information on the contract 

on several occasions, but received nothing from GRD. However, GRD says they 

conducted regular biweekly briefings on the project and that ITAO officials raised no 

issues. 

USACE Response: This statement is not accurate. USACE has numerous documents 

and correspondence showing responses to ITAO requests. In addition to weekly 

meetings, USACE sent out a Weekly Health Sector Update that included a slide 

dedicated to this program. This update was sent to ITAO, Department of State Main, 

and the Health Attaché. 

SIGIR Response: USACE provided documentation of some coordination between itself and 

ITAO. In particular, USACE provided examples of Weekly Health Sector Update slides that 

included information on the PHC contract. GRD also stated that it provided ITAO weekly 

project updates, but according to the Embassy, these meetings covered hundreds of projects so 

project status could not be discussed in detail. This report presents this information. 

The report also presents examples of incomplete or inaccurate information provided by GRD. 

As noted in the report, in May 2009—eight months after MoH personnel stopped coming to 

SBH’s training sessions—GRD briefed ITAO that the sustainment contact would provide the 

MoH with “maintenance management training.” In the same briefing, GRD stated that SBH 

would “deploy a computerized maintenance management system” and provide “tools and 

processes to support the entire MoH system” and “other Iraq Ministries.” This briefing took 

place four months before the end of the contract when it was apparent that none of these goals 

would be met. 

Further, ITAO and Health Attaché officials stated that they repeatedly asked GRD to provide a 

briefing on the contract’s final status, but never received one. As recently as February 2010, an 

ITAO official requested GRD provide a final briefing, including a summary of the PHCs’ status, 

but at the time this audit was completed GRD had not yet provided one. Thus SIGIR continues to 

conclude that coordination was not effective. 

 
30 

USACE Comment 4

SIGIR Response: As noted in the report, an MoH official indicated that the individual 

assessments are useful to the Government of Iraq. Our point is that a summary of the 

assessments was necessary to provide transparency on the PHC status. The summary could 

provide important information, such as whether the facilities are open and operating at their 

intended capabilities, and the major maintenance issues that need to be addressed. However, 

such an analysis has not been done. Consequently, SIGIR continues to believe that, without a 

summary, the individual assessments do not provide the “transparency on the current status of 

PHCs” that ITAO stated as a contract goal. 

USACE Comment 5

SIGIR Response: This report notes that this information was provided. 

 
31 

USACE Comment 6

SIGIR Response: The second paragraph of the contract statement of work specifically notes that 

this effort will “assist by providing to MOH a set of maintenance management tools, processes, 

and skill sets to sustain this infrastructure well into the future.” In addition, SIGIR believes that 

it would have served no purpose to “establish a centralized collection point” for maintenance 

management data if this collection point were not given to the MoH. A knowledgeable ITAO 

official voiced similar views. 

USACE Comment 7

SIGIR Response: The contract did not specify how workforce skills were to be enhanced. 

However, in GRD’s briefing to ITAO on May 9, 2009 it states that one of the PHC sustainment 

contract’s two objectives is “Capacity Development & Training.” ITAO’s funding request form 

for this contract, which GRD provided along with earlier comments, states that “the objective of 

[this initiative] is to support the training of MoH staff...” The contractor also stated that the 

purpose of meeting with MoH officials was to “train” them. However, as noted in the report, 

this did not occur because the Government of Iraq did not make personnel available to meet with 

the contractor. Regardless of whether these planned meetings with MoH officials were termed 
32 

‘formal training’ or on-the-job training, it is clear that SBH planned to provide training to MoH 

personnel and this did not occur. 

The contractor did, however, enhance the “operations...capabilities” of some PHC staffs. 

Specifically, SBH trained local staff at 17 of 133 U.S.-funded PHCs. Consequently, we continue 

to believe that this requirement was partially achieved. 

USACE Comment 8

SIGIR Response: We revised our final report language to account for this new information. 

 
33 

USACE Comment 9

SIGIR Response: As noted above, USACE provided documentation of some coordination 

between itself and ITAO. In particular, USACE provided examples of Weekly Health Sector 

Update slides that included information on the PHC contract. GRD also provided ITAO 

biweekly project updates, but according to the Embassy, these meetings covered hundreds of 

projects, so project status could not be discussed in detail. This report presents that information. 

However, as also noted in this report, in May 2009—eight months after MoH personnel stopped 

coming to SBH’s training sessions—GRD briefed ITAO that the sustainment contact would 

provide the MoH with “maintenance management training.” Moreover, as noted in this report, 
34 

ITAO and Health Attaché officials repeatedly requested, but never received a briefing on the 

contract’s final status from GRD. 

USACE Comment 10

SIGIR Response: This report notes we were provided this information and that we will report 

separately on any issues that may arise from our review of this information. 

 
35 

Appendix F—SIGIR Mission and Contact Information 

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

operations in Iraq, the Special Inspector General for Iraq 

Reconstruction provides independent and objective: 

• oversight and review through comprehensive audits, 

inspections, and investigations 

• advice and recommendations on policies to promote 

economy, efficiency, and effectiveness 

• deterrence of malfeasance through the prevention and 

detection of fraud, waste, and abuse 

• information and analysis to the Secretary of State, the 

Secretary of Defense, the Congress, and the American 

people through Quarterly Reports 

Obtaining Copies of SIGIR 

Reports and Testimonies 

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

SIGIR’s Web site (www.sigir.mil). 

To Report Fraud, Waste, and 

Abuse in Iraq Relief and 

Reconstruction Programs 

Help prevent fraud, waste, and abuse by reporting 

suspicious or illegal activities to the SIGIR Hotline: 

• Web: www.sigir.mil/submit_fraud.html 

• Phone: 703-602-4063 

• Toll Free: 866-301-2003 

Congressional Affairs Hillel Weinberg 

Assistant Inspector General for Congressional 

 Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-428-1059 

Email: hillel.weinberg@sigir.mil 

Public Affairs Danny Kopp 

Office of Public Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-428-1217 

Fax: 703-428-0818 

Email: PublicAffairs@sigir.mil