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May 13th, 2006 - In a Dispute,
Army Cancels Rebuilding Contract in Iraq |
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In a Dispute, Army Cancels Rebuilding
Contract in Iraq By James Glanz and David Rohde New York Times May 13, 2006 Baghdad, Iraq, May 12 - The
Army Corps of Engineers said Friday that it had canceled the work remaining
on a $70 million project to refurbish 20 hospitals in Iraq, deepening a
dispute with one of the largest American contractors operating here and
seriously threatening an ambitious United States-led effort to improve Iraqi
health care. Brig. Gen. William H. McCoy
Jr., commander of the corps division that administers the projects, said the
cancellation would affect mainly work on eight hospitals that he said the
contractor, Parsons, had not completed on time, adding that Iraqi companies
would be used to finish those jobs. He said Parsons had finished most or all
of the work on 12 of the hospitals. The move follows by less
than two weeks a federal audit of work by Parsons on a $243 million program
to build health care clinics around Iraq that found that just 20 of the
original 150 clinics would be completed without new financing. Together, the programs
constitute the most important American effort to improve Iraq's dilapidated
health care system, and are widely regarded as crucial to showing ordinary
Iraqis that the invasion has improved their lives. General McCoy had disputed
many of the findings in the audit, which laid much of the blame for poor
workmanship and cost overruns on the clinics to lax oversight by the corps. On Friday, the general said
in an interview that while he did not think all the problems with the hospitals
were the fault of the contractor, Parsons, he had no choice but to act.
"I'm not trying to deflect blame here; I'm responsible for construction
in Iraq," he said. "But this contractor was not performing, and we
took aggressive action." The abrupt cancellation of
the hospital project appeared to stun company officials, who said the corps
had done nothing after receiving repeated warnings that money was running low
and that serious missteps by corps managers had undermined certain projects.
The audit on the clinics, which was carried out by the Special Inspector
General for Iraq Reconstruction, found that the corps had made similar
mistakes in that case. The Parsons officials cited one
case in April when, they said, frustrated doctors wanted to move into a new
residence hall that Parsons had completed next to a maternity hospital in
Najaf, but could not open it until corps inspectors approved the work. When
inspectors did not arrive, the doctors finally stormed the building, breaking
locks and overrunning guards, the officials said, showing pictures of what
they said was the incident. Among the other challenges
that the company faced, it said, was a strangely structured agreement with
the corps that paid construction costs from one contract and administrative
costs - things like living quarters, security and the salaries of Parsons
managers in Iraq - from a separate contract. For the full range of the
Parsons work on clinics, hospitals and a few related things like Iraqi
ministry buildings, the costs on the administrative contract alone have risen
above $100 million, the company said. With the delays in completing the
hospitals, the corps says, those costs have risen too far. For its part, the company
says that it was clear about what the job would cost, but that the corps did
not provide the necessary support to finish the work. "There have been many
reasons for delay," said Earnest Robbins, a senior vice president at
Parsons, citing a proliferation of government contracting entities in Iraq,
rapid turnover in the corps staff and difficulties in dealing with Iraqi
ministry officials. But among the main problems, Mr. Robbins said, was that
"we were never funded to provide the level of management, of oversight,
that we told the government it would take to complete those projects." The residence hall was not
the only work scheduled at the Najaf maternity hospital, which is one of the
eight that will not be completed under the Parsons contract. Two other
maternity hospitals in the south, in Nasiriya and Hilla, also will not be
finished, along with three hospitals in Baghdad, one north of the capital and
one in Ramadi. Among them, those hospitals
contain 2,125 beds, the company said. Although Parsons and the corps disagree
on how much of the work has already been completed in those hospitals, both
say that all of them are at least 60 percent finished. The construction work has
been carried out with Iraqi subcontractors, several of which Parsons said had
been difficult to manage. But the corps said it planned to take the
extraordinary step of finishing the job by hiring many of the same
subcontractors that Parsons had been working with already - in effect,
cutting out the middleman. "In all cases, from our
point of view, these contractors have the capacity to do the job,"
General McCoy said. Many of the projects in the
hospitals involve interior renovations and some new construction. But the
original contract for all 20 hospitals also called for 57 elevators, 19 water
purifiers and 19 incinerators for burning medical waste. Most of the
equipment installation has been completed, the company said. To date, there has been no
comprehensive audit of the hospital program, as there has been of the
clinics. But last year an Iraqi
reporter and producer, Ali Fadhil, visited one of the original 20 hospitals
in Diwaniya, in the south, as the refurbishment was nearing completion and
shot film of the site. Some of it was used in "Iraq's Missing Billions,"
a British documentary, and shows things like an open manhole leaking sewage
in the garden of the hospital and sewage backed up in the hospital kitchen. Mr. Fadhil said in an
interview that he could smell raw sewage in the changing room for one
operating room. Mr. Fadhil said he saw
shoddy work in other parts of the hospital, including new light fittings that
had melted and pipes that had not been connected. Inside another operating
room, floor tiles had not been properly glued down and ants were crawling
around. Parsons officials conceded
difficulties with the project, which was later completed, but said the
problems stemmed mainly from delays by corps inspectors and interference by the
Iraqi Ministry of Health, which constantly demanded new work. During the
delays, Iraqis began using the hospital and clogged the sewage system by
using it to dispose of solid trash, like bags of used syringes, that it was
not meant to carry, the officials said. "The sewage system was not
designed as a garbage dump," a Parsons official said. Mr. Fadhil said that the
Iraqi subcontractor working with Parsons made similar claims, but that it
appeared that most of the problems had been caused by the use of poor quality
materials. "I had a hope that the American presence, that they would do
something good for us," he said. "The opposite happened." This week Parsons officials
produced photographs of waiting rooms and other areas that seemed to be clear
of damage. As word of the cancellation
of the hospital contract began making its way around Baghdad's fortified
Green Zone, Stuart W. Bowen Jr., who heads the office of the Special
Inspector General, said that the Parsons work had caught his attention.
"The more I look and hear about different issues, the more I'm
interested in taking a wider look at their activities," he said. James Glanz reported from
Baghdad for this article, and David Rohde from New York. Copyright 2006 The New York
Times Company External link:
http://www.nytimes.com/2006/05/13/world/middleeast/13reconstruct.html |