“Parsons Report Outlines Grave Deficiencies” for Beacon Media Newspapers

Parsons Corporation, based in Pasadena, delivered little of what it was assigned in Iraq reconstruction contracts, new report finds.

February 2008

A report released last Monday by the Special Inspector General for Iraq Reconstruction detailed the progress and lack thereof regarding Iraq reconstruction contracts with the Pasadena-based Parsons Corporation.

Through reports on contractors like Parsons, the Special Inspector General for Iraq Reconstruction, Stuart W. Bowen Jr., provides oversight of the $22 billion that comprise the Iraq Relief and Reconstruction Fund.

Parsons had done previous reconstruction work in Iraq and other SIGIR reports covered previous contracts, but this report focused on 11 construction task orders and three task orders for mobilization, program support services, and contract close-out.

Of the 11 assigned construction task orders, Parsons completed three and the rest, which were in various stages of completion, were terminated by the government, specifically the U.S. Army Corps of Engineers Gulf Region Division.

“When a contract is terminated for the convenience of the government, specific reasons for the termination are not identified,” said the report. “However, in a written response to an earlier SIGIR report on primary healthcare centers, the U.S. Army Corps of Engineers Gulf Region Division identified reasons it was displeased. These include a lack of control of subcontractors, poor construction management and supervision, and a lack of cost control.”

In response, Parsons said, “As noted in the SIGIR report, Parsons requested clarification and finalization of project scope, realistic funding, and reasonable construction schedules based on the realities we experienced on the ground, but the Government frequently dismissed (or ignored) our position. Many of the problems noted in the report were a direct result of our reliance on relatively unknown and often inexperienced Iraqi subcontractors who we were compelled to hire as a part of the ‘capacity building’ goals of the Reconstruction Program.”

The three main objectives of the Parsons contract were to repair and renovate selected Iraqi ministry buildings that suffered severe looting, vandalism and some fire damage; renovate and repair Iraqi hospitals to improve functions and cleanliness required of hospitals and build new primary healthcare clinics throughout Iraq.

“Parsons successfully completed all work on two task orders to renovate and repair three Iraqi ministerial buildings at a total cost of $9,744,964,” according to the report. The third successfully completed task order was to rehabilitate eight maternity and pediatric hospitals in northern Iraq at a cost of $16,182,230.

As of August 15, 2007, $365,217,336 had been set aside for the task orders covered in the report and $342,088,911 disbursed to Parsons.

“Final contract costs are pending required incurred-cost audits of the contractors work by the Defense Contract Audit Agency and the settling of contractor claims,” said the report.

Three task orders for the design and construction of 150 primary health care centers were significantly unfinished, with six being completed and between nine and 99 percent of the required work completed on 135. Eight primary healthcare centers were dropped after consultations with the Iraqi Ministry of Health, though the report did not specify what those consultations found, and one primary healthcare center was dropped but construction was continued through direct contracting.

“Parsons didn’t finish the contract and to have only finished 6 of 141 certainly leaves questions as to why that would be the case,” said SIGIR spokesperson Kristine Belisle.

A previous report indicated that urine and fecal matter leaking from poor plumbing had made major portions of the Parsons-built Baghdad police academy unusable.

“With the Baghdad police academy construction there were major deficiencies in the outcome of the building,” confirmed Belisle.

“Within this environment it is not unexpected that individual project costs would increase and that there would be delays in completing projects,” said the report. “What is not expected, however, is the inability of management to remedy problems in a timely manner.”

“Parsons put forth its best efforts to simultaneously build or refurbish hundreds of facilities across Iraq,” said Parsons. “We did so under an extremely hazardous security environment while simultaneously contending with constantly changing demands by government officials regarding what they wanted, where and for how much.”

Lessons learned according to the report, were that “for this particular contract, there were clearly problems on both sides. However, SIGIR believes the preeminent lesson learned is that the government is responsible for ensuring the contractor satisfies contract cost, schedules and performance requirements.”

It is uncertain if Parsons is currently doing more reconstruction in Iraq or if they will in the future since that is the decision of the U.S. Army Corps of Engineers Gulf Region Division, who was unavailable for comment.

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