IMPROVING USG BUDGET EXECUTION IN IRAQ

UNCLAS SECTION 01 OF 02 BAGHDAD 004123 SIPDIS SIPDIS E.O. 12958: N/A TAGS: EAID PREL IZ SUBJECT: IMPROVING USG BUDGET EXECUTION IN IRAQ ¶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. - - - - - - - - - - - - - - - - - - - - Current Challenges in the PRDC Program - - - - - - - - - - - - - - - - - - - - ¶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. - - - - - - - - - - - - - - - - - - Possible Solutions or Improvements - - - - - - - - - - - - - - - - - - ¶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 funds. - - - - - - - - - - - - - - - - - - - - - - Additional Benefits from Changed Procedures - - - - - - - - - - - - - - - - - - - - - - ¶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 participation. - - - - - - - - - - - - - - - - - - - - - - - - - Enhancement of Current Grant Programs: TDP & QRF - - - - - - - - - - - - - - - - - - - - - - - - - ¶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. - - - - Comment - - - - ¶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. Crocker