In 2005, Congress authorized $592 million in emergency funding for the New
Embassy Compound (NEC) in Baghdad, Iraq, with the intent of having the construction
completed within 24 months of the project start date. This is the second
of two Office of Inspector General (OIG) reviews of contracts related to that
design and construction. In December 2008,1 OIG audited contract competition for
selected NEC contracts.
The current audit was conducted by OIG, with technical assistance provided by
a team of engineers from the U.S. Army Corps of Engineers (USACE).2 OIG and
USACE (referred to collectively in this report as “we”) performed work in the Washington,
DC, area and traveled to Baghdad, Iraq, during October 2008.
We examined five contracts awarded to First Kuwaiti Trading and Contracting
(First Kuwaiti) for about $470 million that were administered by the Emergency
Project Coordination Office (EPCO) during construction. EPCO was set up by
the Bureau of Overseas Buildings Operations (OBO) to manage the project, and
it did not use established OBO resources. The primary objective of this audit was
to determine whether the NEC Baghdad met the approved contract requirements
for the construction of facilities and major components and systems and whether
EPCO required and implemented the appropriate quality control and commissioning
programs in accordance with established requirements
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