Cablegate: Baghdad: Inl Program Management and Contractor Performance


DE RUEHGB #2694/01 2791530
R 061530Z OCT 09




E.O. 12958: N/A

1. (U) Summary: INL faces significant challenges in its effort to
ensure contractor performance in Iraq. Some of the challenges are
due to current constraints on the number of program officers and
in-country contracting officer representatives (ICOR) in Baghdad,
while others appear to be inherent in the design of the current base
contract (BC). While Post is fully aware that the contracting
function rests in Washington, INL Baghdad would like to provide
input based on its experience in the field. To this end, Baghdad
would welcome the inclusion by INL procurement officials of
performance metrics that equate to real-time financial rewards, or
costs, to contractors in the next base contract, and its component
task orders (TO). End summary.

Managing Growth and "Normalization"

2. (U) Looking ahead to the handover to INL of the 350 member
police development mission, and roughly the current level of
engagement in the justice sector, INL Embassy Baghdad requires a
minimum NEC staff of 21 personnel in CY 2010, growing to 27 by CY
2011. Opportunities to strengthen INL Baghdad staffing levels have
arisen due both to the handover and to the ongoing mission-wide
effort to "normalize" and right-size Embassy Baghdad. INL/I is
coordinating NSDD-38 requests that will seek to increase INL
staffing in Iraq in the near-term (septel).
3. (U) INL Baghdad positions include the current INL director,
deputy director, reporting and coordination officer, management
officer, OMS, senior executive police advisor, three Rule of Law
project managers, one corrections advisor, one Rule of Law
consultant, and one bilingual-bicultural advisor. Also required as
soon as possible are four senior police advisors and a new financial
management specialist.

4. (U) INL Baghdad would benefit from six NEC-based ICORs dedicated
to contractor performance and project quality assurance throughout
Iraq. Five additional ICORS would be based at Camp Butler in the
Victory Base Complex, and in the regions. This proposed staffing
level would permit Baghdad ICORs to implement the robust Quality
Assurance Surveillance Program (QASP) required to oversee the large,
complex and growing INL program in Iraq.

5. The balance of the positions in place by January 2011 should
include five police mission supervisory staff. There would be
another 52 State employees (3161 or PSC) assigned to supervise the
350 person police training project.

Changing Incentives

6. (U) Another opportunity to improve our performance, and those of
our contractors, rests in the March through July 2010 base contract
re-compete for the next five-year period. INL Baghdad recommends
that INL procurement officials take advantage of this opportunity by
adjusting the incentive structure of the next BC to ensure greater
contractor responsiveness to growing customer requirements in Iraq.

7. (U) To illustrate, in the current BC the task order for
construction does not contain a liquidated damages clause in which
the parties designate in advance of an award the timing and amount
of damages an injured party may collect as compensation should
specific breaches under the control of the contractor occur. A
liquidated damages clause would provide INL a means to better
incentivize timely project completion, and "front-load" financial
repercussions faced by contractors who fail to meet agreed
performance standards.

8. (U) Contractors under the current arrangement generally are paid
"as they go" whether or not they meet agreed construction timelines.
Q"as they go" whether or not they meet agreed construction timelines.
"Equitable adjustment" exists for such cases, but it is a crude
measure used to garner damages at contract closeout rather than a
mission-focused management tool meant to assure the quality and
timeliness of contractor service throughout the life of a project.

9. (U) Another device that Washington may wish to include in the
next base contract is the contractor performance rating system
Embassy Baghdad uses to encourage, measure and reward acceptable
performance by its life support provider. The system is configured
to ensure that the contractoQhieves three primary objectives: (1)
perform mission-ordered priorities; (2) keep projects on schedule;
and (3) remain responsive to the customer's changing needs. It
gauges contractor performance via monthly rating exercises, with the
monthly ratings tabulated at the end of each twelve-month period
into a final annual rating upon which the bonuses of contractor
managers and employees are based. This model refocuses contractor
emphasis from initiating (but not necessarily completing) cost-plus
goods and services contracts to having a vested interest in
delivering results that satisfy the customer.


10. (U) Whether or not the specific proposals above appear in the
final base contract, or its TOs, Baghdad proposes that the next INL
BC contain performance metrics that equate to real-time financial
incentives to contractors. Further, INL procurement officials may
wish to pilot these measures during the extension of ICAS Task
Orders 4760 (CPI) and 4761 (DynCorp International). Doing so would
help to ensure that the next base contract period comes into force
with a fully-functioning set of performance measures. End comment.


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