Cablegate: Improving Usg Budget Execution in Iraq

DE RUEHGB #4123/01 3530410
P 190410Z DEC 07




E.O. 12958: N/A

1. SUMMARY: We are seeking ways to improve the delivery of programs
inside Iraq with resultant increase of US budget execution. Dramatic
improvements may be difficult to come by, but we have
recommendations to offer that would not only promote funds
disbursement, but also improve Iraqi involvement and decrease time
of program delivery. END SUMMARY.

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Current Challenges in the PRDC Program
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2. Procurement and management teams throughout Iraq are challenged
to handle the volume of contracting and project oversight required
for assistance programs. In the Provincial Reconstruction
Development Committee (PRDC) program alone, over 180 projects have
been initiated with FY-06 funds and the program will grow by 33%
with the addition of FY-07 funds received in September. Thus the
PRDC program will be nearly an $800M program, consisting of smaller
scale ($1-2M) projects. DOD project development teams are pushing to
ensure all funds are awarded on contract, but demands on project
management and technical staff required to properly execute this
program is significant. Greater flexibility in our approach to
service procurement and delivery is needed.

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Possible Solutions or Improvements
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3. Using streamlined acquisition procedures with programs being
executed by USACE/GRD for the DoS will minimize the time and
resources in contracting for PRDC projects. Limiting the number of
sources from which bids or proposals are solicited and in justified
circumstances authorizing single source awards will minimize the
time consumed by the award process. Current authorities held by GRD
permit use of limited competition in the acquisition process and may
be used in this program. A similar approach is presently employed in
several other DOD programs - CERP and the Iraq Freedom Fund.

4. Grants and cooperative agreements can provide greater flexibility
to apply the funds where needed and to create effective
partnerships. These programs would benefit with the ability to enter
into grant agreements with both non-governmental organizations as
well as government organizations. Grants with international
organizations or donors offer the possibility of matching
contributions that will serve as a multiplier of funds available.
The permission to forge agreements with both national and provincial
governments will not only promote enhanced budget execution, but
also encourage Iraqis to underwrite these investments with their own

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Additional Benefits from Changed Procedures
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5. Opening our contracting procedures and selection process should
also permit greater Iraqi participation in the contract award
process. Current procedures and procurement sensitivities often
preclude Iraqis from sitting on contract selection panels or even
observing. This lack of transparency can foster mistrust and does
not build Iraqi confidence in our contracting process. We are
missing a capacity building opportunity. Our process should solicit
Iraqi viewpoints and encourage, where possible, their active

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Enhancement of Current Grant Programs: TDP & QRF
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6. Our execution of dedicated grant programs - Targeted Development
Program (TDP) and Quick Reaction Fund (QRF) would be enhanced with
the placement in the Mission of a "Grant Specialist" with the
experience and sufficient warrant capacity to issue grants in
support of these programs. As the upfront identification of
qualified award submissions can be all preformed in advance of grant
issuance. This specialist would not necessarily have to be on a full
time basis, a rotational, temporary presence would be sufficient.

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7. These requests for assistance are largely
procedural/administrative in nature and do not require large amounts
of dollars and/or manpower, but will aid us in the implementation of
programs. This type of assistance not only will lead to improved
budget execution, but will also ensure that Iraqi's see that the US
can deliver on promises. Resources will be more readily brought to
bear on approved efforts in a timely manner.

8. Granting of these authorities will not necessarily result in all
projects utilizing streamlined procedures, or that grants will be
universally applied. Ensuring that the work is placed with qualified
and capable contractors will remain the preeminent concern for both

BAGHDAD 00004123 002 OF 002

contract and grant award. A competitive process may be determined to
be the most advantageous method to determine the best qualified
vendor. The streamlined contracting procedures and grants awards
will be additional, more flexible tools that PRT's and district
engineers can employ.


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