Reconstruction work in Iraq in 2007. (AP/Getty Images)

In 2003, as $50 billion of U.S. reconstruction money began flowing into Iraq, the Parsons Co., a huge engineering and construction management firm based in Pasadena, Calif., got a $3 million contract to renovate the Iraqi Security Forces Civil Defense headquarters in Baghdad.

As reconstruction contracts went, this one wasn’t very large, certainly not by Halliburton standards and not even by Parsons standards. Parsons had contracts for almost $900 million more work on other projects. It completed work on only 34 percent of them, according to a 2008 report by the Special Inspector General for Iraq Reconstruction.

The work at the civil defense headquarters actually got done, just not very well. The plumbing failed, flooding the building. The electrical work failed, causing numerous fires. There was lots of finger pointing — Parsons blamed its Iraqi subcontractors — and a few news stories, but the story quickly faded away, lost amid bigger reconstruction scandals and the relentless tide of events. Another day, another crisis.

But this week, the shoddy work at the civil defense headquarters finally got some attention from Congress, and that is hopeful news for those who believe that government employees and contractors must be held accountable for their failures — even it takes nearly six years.

On Wednesday, the Senate Homeland Security and Governmental Affairs Committee unloaded, not on Parsons or its Iraqi subcontractors, but on an obscure Pentagon office called the Defense Contract Audit Agency. Its 4,200 employees are charged with auditing tens of billions in Defense Department contracts each year.

All told, said Sen. Claire McCaskill, D-Mo., a member of the committee, the Pentagon has some 30,000 people engaged in some kind of auditing function — some of them, she said, don’t do their jobs very well.
In the last 14 months, the DCAA has been the subject of two scathing reports from the Government Accountability Office; the second one, released Wednesday, found that the DCAA’s work overseeing Parsons’ work on that Iraq civil defense building was particularly troublesome.

In 2005, DCAA auditors found eight significant deficiencies on the civil defense building project; after the contractor complained, DCAA supervisors revised and deleted some findings, cooked up new ones and in one instance, “cut and pasted” the signature of a prior supervisor to make it look like the work had been approved.

“In the auditing world,” said Ms. McCaskill, a former Missouri state auditor, “that’s a capital offense.”

“The way they blew this,” Ms. McCaskill told us Thursday, “should send shock waves through the Pentagon.”
No one involved in the cover-up has been fired or disciplined, she noted. Indeed, one of those involved actually got a promotion. Ms. McCaskill blamed the problem on an agency culture that prizes speed and efficiency over performance.

The GAO report concurred, saying that its review of 69 DCAA audits from around the country found the agency commonly “gave satisfactory ratings to deficient audits” and rescinded audits that had found problems with contracts. It recommended making the agency more independent of the Pentagon procurement offices.

“One problem around here [Washington] is everyone has a short attention span,” Ms. McCaskill says. “Everything runs according to the news cycle, and people lose track of problems.”

Americans have a right to expect that their money is being spent wisely — regardless of pressure from Congress, the Pentagon or well-connected contractors. Ms. McCaskill’s “capital offense” suggestion is a little over the top, but metaphorically speaking, more heads should roll and more companies should be barred from doing business with the government.