Parsons loses another military contract

Lisa Napoli Jun 20, 2006

KAI RYSSDAL: Democrats in Congress are calling for new investigations. They want a closer look at some military contracts in Iraq. As it happens, the Pentagon’s just cancelled a huge rebuilding contract. Marketplace’s Lisa Napoli has the details.

LISA NAPOLI: Parsons is a 60-year-old engineering firm headquartered in Southern California. It held the $99 million contract to build a prison in northern Iraq. Lt. Colonel Stan Heath of the Army Corps of Engineers explains why the contract was scotched:

LT. COL. STAN HEATH:“Quite frankly it was the contractors’ inability to complete the project within cost limitations. . . . And the contractor’s abandonment of the project is what lead to the termination.”

Weeks ago, the Army Corps canceled another $300 million in Iraqi contracts with Parsons to build hospitals and clinics. CorpWatch executive director Pratap Chatterjee visited Parsons worksites in Iraq in April. He says the problem is bigger than just one contractor.

PRATAP CHATTERJEE:“This is one example in a litany of disasters in reconstruction.”

Chatterjee says he isn’t sure who’s at fault:

CHATTERJEE:“You have to ask yourself whether the company has either completely mismanaged the money, or whether the US Army Corps and US AID are properly managing the company itself.”

Alex Knott of the Center for Public Integrity says the government’s waging a lose-lose battle:

ALEX KNOTT: They need these contracts fulfilled so they can be successful in Iraq. But at the same time, since it is a war zone, you have very few companies that are, first, able to do it and then, secondly, willing to do that.

Lt. Colonel Heath of the Army Corps ducked the issue of blame. And Parsons refused comment. But a spokeswoman for the company told the New York Times Parsons had met the government’s contract terms.

In Los Angeles, I’m Lisa Napoli for Marketplace.

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