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Defense Department Briefing on Iraqi Reconstruction Contracts

Presenters: Admiral David Nash, Director, Program Management Office, Coalition Provisional Authority
May 24, 2004 3:30 PM EDT
Defense Department Briefing on Iraqi Reconstruction Contracts
 
 

            STAFF:  Good afternoon, everybody, and thank you for joining us today.

 

            Most of you know him, I think.  Admiral Nash is back in town. This is his third time here, I think, with us.  He's the director of Program Management Office in Baghdad, and he's responsible for contracts for the PMO.  And he's going to talk about the current status of the contracts, as well as the Accelerated Iraqi Reconstruction Program, which is taking off now.  He's got a few things to say, but then is going to spend most of the time asking the questions you may have.

 

            So with that, thank you, sir, for joining us.

 

            ADM. NASH:  Thank you.

 

            Well, it's good to be back.  Last time I think we talked, we had just awarded contracts, $5 billion worth of contracts, and had reported that.  And we're -- I took off for Iraq, and I'm happy to report that of those $5 billion worth of contracts, they were all awarded, there were no protests.  The contractors have showed up with great vim and vigor.  In fact, they're at work.  So things are going very well.

 

            Where we are is that they have in fact mobilized, in some cases more so than others.  Turns out that most all of them had worked in the country before, so they know and they know what they're doing, and they're not intimidated by Iraq.  We've asked them to get started quickly because we want to make sure that we begin to make a real impact on the situation in Iraq, and we're working through that.  I know some of your questions will be about security, and I'll talk about that last, about what impact it's having on us.

 

            We're -- as I talked about last time, we are in fact employing Iraqis.  We're just getting started, that we are employing Iraqis and it's going well.  Right now we have total, both non-construction and construction, we have over $4 billion obligated, and so work is under way.  In terms of construction, we have a couple billion dollars, over $2 billion worth of work started, and work is progressing.  Each week we're putting in place about 50 (million dollars) to $75 million worth of construction.  That means the actual physical construction is complete as we move forward.  And that will pick up as time goes by, as we get more and more of these projects going.

 

            The second thing that's happened to me out there is Ambassador Bremer wanted to accelerate the progress, and particularly in terms of employing Iraqis, so I've been asked to do something else.  It's a thing called the Accelerated Iraqi Reconstruction program, and it's a -- what he asks us to do is to pull together all the things that were going on in certain governates, certain cities, to try to integrate what we're doing so that it makes a major impact on the people of the town or of the governate.

 

            And that's going very well.  We have -- in that arena, we have worked with the military commanders.  We've worked with the CPA folks that are in charge of projects.  And most importantly, we've sat down with the leadership of each of these towns and have put together project lists that appeal to them, things that they want to do about their city.

 

            And we have -- so far we've got about $130 million worth of projects. That's over 40 projects awarded.  We have Iraqis to work, and it goes from home loan programs, which doesn't sound like construction but nevertheless is employing people, all the way to sewage treatment facilities and sewage treatment piping and that sort of thing.

 

            So that's going along very nicely.  And I think in your packet is a lot more -- will be -- you'll get it afterwards -- a lot more information about what's in there.  And it's -- I think you'll find it's very significant work.

 

            Last thing to talk about is the security and how it's impacting us.  As I've said on many occasions, security would not stop us. We're out there building.  We haven't stopped building, even through the peak of, you know, the April 9th and the time -- that time in Iraq.  Yes, it's had an impact on how many people show up to work, and it went down to where we were at about 25 percent of what we had been at one time, in terms of Iraqi employees on the job.  We're moving back up very quickly.  But in some cases our -- the employees -- the Iraqi contractors' employees are being threatened, and so are the contractors themselves.  But people still come to work, and we're still building.

 

            We're building in many arenas.  The two sectors that probably have the most going on right now is electricity -- everybody's been watching that very closely and wondering what's -- you know, wanting to see that come back.  The other one's been security, where we've been doing facilities for the new Iraqi security forces, whether it's the army or the CDC or whatever it is.

 

            So security is having an impact on us.  But as I've always said, it would not stop us, it would affect how fast we could build, and it would affect how much money had to go to security and how much money went to -- would go to actual brick and mortar construction.

 

            So are kind of my opening points.  I'm still very enthusiastic, very positive.  Things are going along well.  And I -- you know, I know some people -- everybody I talk to in your profession asks me: Well, what about the 1st of July?  Won't that be something different?  It will be another work day for us.

 

            I've just finished a tour of all the governates.  I've met -- I've gone to all 18 governates.  I've met with all 18 governors.  I've talked to the -- usually they have a council or they have a group of director-generals that surround them and I've talked to all of them and, you know, as far as I'm concerned, they're happy with what we've got.  They realize that in the future we'll continue to talk.  So I think this collaboration and building of support right now is going to carry us right through the 1st of July.

 

            I'm looking forward to working with a new embassy and a new ambassador.  He and I have talked and, you know, we'll support him 100 percent in what he's doing.  So I'm very positive about the 1st of July and I'm hoping it's just -- well, the 2nd of July and the 15th of July and the 20th of August will just be other work days for us.

 

            And I guess, finally, the thing that really resonates with the people of Iraq -- and I think -- and because I really mean it -- is I told them that my job is to bring a gift from the people of the United States to the people of Iraq and that really resonates with them.  And so I am really enthused and really positive about what I'm doing.

 

            With that, I'll open it up to questions.

 

            Yes, sir?

 

            Q     Admiral, could I ask you to elaborate a little on what you were talking about -- how security has affected the workforce?  How many workers are you talking about, and you said at one point it was down 25 percent --

 

            ADM. NASH:  Down to 25 percent of what we were.

 

            Q     What is it now?

 

            ADM. NASH:  It's somewhere around 8,000 to 9,000 people.  It's a little hard to, you know, make sure exactly, but we're employing about 8,000 to 9,000 daily.

 

            Q     Do you know what percentage of those are actually coming to work?

 

            ADM. NASH:  I'll get you that number, but I know we're up somewhere around 75 percent of what we were, which was about 10,000.  So we're about 80 -- 8,000 is about 75 percent of where -- and it's hard to tell on construction, you know, because construction, you finish the work and you don't need the workers.  So it kind of -- it independently goes up and down as well as in response to the security. So we're growing like I'd expect it to grow.

 

            Yes, sir?

 

            Q     On the PMO website, the last time I saw, there were 73 projects under way right now, I think, out of about 2,300.  Can you give us a target of when we could see that number go up?

 

            ADM. NASH:  Well, we're actually more than that right now.  We've got -- let me get the number for you.  We have many more projects than that.  We have -- right now we have 104 projects under way and the week before we had 73.  So that's kind of the way it's going.

 

            Q     About 4 percent.

 

            Q     When can we see -- can you give us a target number of when we're going to see 50 percent of the projects under way or 75 percent or --

 

            ADM. NASH:  Well, what we had said was we would have $5 billion in construction committed by 1 July and I would expect that probably about $5 billion worth of work would be under way.  Now, under way -- this is a design-build contract, so, you know, the design would be under way, some of the initial work would be under way, but they'll be in varying stages.  Because some of the work's been under way for a long time, it will be finished, but -- so by 1 July you'll see $5 billion worth of work under way.

 

            Yes, sir?

 

            Q     You talked about this accelerated reconstruction project. Can you give us more details on that?  For example, maybe projects in particular cities?

 

            ADM. NASH:  Yes, I can.  I can.  We started out with seven cities: Baghdad, Fallujah, Baqubah -- or Baqubah, rather -- (adjusting pronunciation) -- let me get the list here -- Tikrit, Mosul and Ramadi.  Those are, hopefully, seven cities.  Did I miss one?  Ramadi, Fallujah, Baghdad, Baqubah, Mosul -- oh, and Samarra.  Now, in Samarra and Tikrit, which are in Salah ad-Din Province, they actually spread it amongst more cities than that, but that's kind of where we started. Now, we've recently added Najaf, Basra, Diwaniyah and -- did I say Najaf -- Karbala.  So we're adding more cities as we go.  And actually, what we've done is taken some of our resources and put it on that, and it's really paying off big dividends.

 

            Q      Can you talk a little about what kind of projects?

 

            ADM. NASH:  Oh, what kinds of projects?

 

            Q     (Off mike.)

 

            ADM. NASH:  Yeah.  Like I say, you're going to get a handout with that information, but let me read off a few.  Home loan program, children's theater, sewer systems, children's playground, vocational school, refurbish the farmers' union, cleanup and restoration -- there's two big projects going on in Fallujah and Ramadi doing that. Water treatment plant, waste water collection system, water distribution network, landfill.  A real need for security (sic) landfills -- for sanitary landfills.  Those kind of things.

 

            Q     What qualifies this as an acceleration?  Were those projects scheduled but not supposed to happen at this time?

 

            ADM. NASH:  No, they were not scheduled.  These are things that were outside of our list.  And so you put the PMO in -- supplemental over here, and then you take these projects, which are funded out of DFI, the Iraqi funds.  And as you recall, there's been some different kinds of funds.  There's been the CERP, the Commanders Emergency Reconstruction Program, there's been something called R3P, which I can't remember what that acronym stands for, but it's been managed by CPA side of it, and they're for small projects.  So we've taken all of those things, put them together, sat down with the leadership in each of these cities, and come out with an integrated project list that's making them happy, that's getting people to work.  So this is in addition to the supplemental.

 

            Q     Are Commanders Emergency Response Funds included in that?

 

            ADM. NASH:  Yes.  In fact, they are still managing some of those things.  But it's all worked together, you know, so we're not --

 

            Q     Did you take money out of CERP and put it into this?

 

            ADM. NASH:  No, it's already -- it's just -- the money that's already there we're keeping track, plus there's been more money put in.  So nothing's being taken away.

 

            Q     Do you have a total figure for the accelerated?

 

            ADM. NASH:  The total figure right now is about $360 million.

 

            Yes, sir.

 

            Q     Talk about the percentage you're spending on security.  I mean, is there money going to private security contractors out of any of this?  Have you seen an -- if so, have you seen an increase in those expenditures?

 

            ADM. NASH:  Well, I'm one of the ones who stayed away from percentages because I don't -- you know, particularly in predicting in the future because I've always said that the enemy is in charge of that cost and we can manage everything else.   There are costs.  There is money going to private security.  As you recall, I said that last time I was here if you were here that we've asked the contractors to bring some security with them, and we've now integrated the security of the military and the police and the contractors into a net that we can take advantage of everybody because I'm not only concerned about security for our people from the enemy, but I also want to make sure that we're totally coordinated so we don't have any friendly fire incidences.

 

            So yes, there's money going out.  I can't tell you the percentage, no.  I can, but I don't have that number at, you know, my fingertips.

 

            Yes, ma'am.

 

            Q     Could you tell us about the policy that maybe you all are coming up with with regard to contractors having their own security forces or defending themselves, carrying guns?  I know that there's some policy being formulated for CPA employees to be armed.  So where do your people fit into that?

 

            ADM. NASH:  Well, we have put out policy or we're putting together policy on how this will all operate because we want to make sure that everybody understands the rules for employment of arms and working together and what have you.  So -- and I'm not familiar with the details of what CPA is putting out, but we've got our own policy that's under the blanket of the contracts; not our own PMO policy, but our own CPA policy that focuses just on all these contracts -- contractors and how they will bring their arms into the country and how they will deploy them and how they'll act because we've got to have some coordination or we're going to have chaos, and we want to make sure that doesn't happen.

 

            Q     And back in November when you all briefed these contracts, as a rule of thumb, your people said expect to spend about 25 percent of the total contract cost on security.  Is that holding up in actuality, or is it more or less?

 

            ADM. NASH:  I don't know.  I hear all kinds of figures.  From those that have been there for a while, I hear 15 percent.  I hear -- and I saw others have quoted 25 percent.  I think the way to know what it's costing is as we go through we'll keep track of the costs because they'll be visible.  That's one of the advantages of having cost contracts; it'll be very visible as to what it's costing us.

 

            MORE

 

              So this is in addition to the supplemental.

 

            Q     Are Commanders Emergency Response Funds included in that?

 

            ADM. NASH:  Yes.  In fact, they are still managing some of those things.  But it's all worked together, you know, so we're not --

 

            Q     Did you take money out of CERP and put it into this?

 

            ADM. NASH:  No, it's already -- it's just -- the money that's already there we're keeping track, plus there's been more money put in.  So nothing's being taken away.

 

            Q     Do you have a total figure for the accelerated?

 

            ADM. NASH:  The total figure right now is about $360 million.

 

            Yes, sir.

 

            Q     Talk about the percentage you're spending on security.  I mean, is there money going to private security contractors out of any of this?   Have you seen an -- if so, have you seen an increase in those expenditures?

 

            ADM. NASH:  Well, I'm one of the ones who stayed away from percentages because I don't -- you know, particularly in predicting in the future because I've always said that the enemy is in charge of that cost and we can manage everything else.  There are costs.  There is money going to private security.  As you recall, I said that last time I was here if you were here that we've asked the contractors to bring some security with them, and we've now integrated the security of the military and the police and the contractors into a net that we can take advantage of everybody because I'm not only concerned about security for our people from the enemy, but I also want to make sure that we're totally coordinated so we don't have any friendly fire incidences.

 

            So yes, there's money going out.  I can't tell you the percentage, no.  I can, but I don't have that number at, you know, my fingertips.

 

            Yes, ma'am.

 

            Q     Could you tell us about the policy that maybe you all are coming up with with regard to contractors having their own security forces or defending themselves, carrying guns?  I know that there's some policy being formulated for CPA employees to be armed.  So where do your people fit into that?

 

            ADM. NASH:  Well, we have put out policy or we're putting together policy on how this will all operate because we want to make sure that everybody understands the rules for employment of arms and working together and what have you.  So -- and I'm not familiar with the details of what CPA is putting out, but we've got our own policy that's under the blanket of the contracts; not our own PMO policy, but our own CPA policy that focuses just on all these contracts -- contractors and how they will bring their arms into the country and how they will deploy them and how they'll act because we've got to have some coordination or we're going to have chaos, and we want to make sure that doesn't happen.

 

            Q     And back in November when you all briefed these contracts, as a rule of thumb, your people said expect to spend about 25 percent of the total contract cost on security.  Is that holding up in actuality, or is it more or less?

 

            ADM. NASH:  I don't know.  I hear all kinds of figures.  From those that have been there for a while, I hear 15 percent.  I hear -- and I saw others have quoted 25 percent.  I think the way to know what it's costing is as we go through we'll keep track of the costs because they'll be visible.  That's one of the advantages of having cost contracts; it'll be very visible as to what it's costing us.  Now, I know that's a question that's been on everybody's mind -- what is the percentage -- but I don't think anybody can answer that for you right now.

 

            Yes, ma'am?

 

            Q     Who specifically will oversee these contracts after July 1st?  And also, who will be awarding the next group of contracts afterwards?

 

            ADM. NASH:  Well, the way it's set up right now is the Army is responsible for contract support and for program management support, so that's one of my bosses.  And so they will continue after the 1st of July.

 

            Now, for the additional contracts, are you referring to the $4 billion, when we get to that?  You know, it remains to be seen.  It could be any one of the executing agents that we already have.  So it's a decision that will have to be made at that time.  But we'll still be overseeing our part of the work.

 

            Q     Is there any movement as to what's going to happen with that $4 billion?  Have you earmarked projects for that?

 

            ADM. NASH:  There are projects that were originally allocated -- it was originally allocated to.  But I think that the debate on what -- or not the debate -- but the conversation on how that $4 billion will be utilized will start very soon, particularly with, you know, Ambassador Negroponte getting ready to come out and join us there in Baghdad.

 

            Q     Have you been given any indication as to whether that will be open to non-coalition --

 

            ADM. NASH:  No, I don't think we're that far.  I think we need to decide what we're going to use it for, and then we need to decide, you know, how we'll employ it because it -- you know, it -- I just don't know at this point.

 

            Yes, sir?

 

            Q     And what's the rationale again for the accelerated program? Did you feel like you needed to sort of show more results than have been seen so far, or what?

 

            ADM. NASH:  Well, you know, these big projects that we're doing take a little time to do.  You've got do some design, you've got to -- and then you do the construction.  So we wanted to do some things that would show even quicker results to the Iraqis, and this is doing it. These are not big projects, but they're going to involve people and put them to work and allow them to see real improvement in their cities.

 

            Q     How are these different from the Commanders Emergency Response Programs?  I want to make sure that we're not double-counting because the CERP has about $360 million in it in a year.  So are you just taking all of those and calling them accelerated?

 

            ADM. NASH:  No, this is -- (chuckles.)  No.  No.  This is new money.  This is new $360 million on top of whatever has been there before.  And some of it is being handled through CERP.  CERP has some limitations on it from a policy standpoint, and so when it's more than CERP can do, then we do it with our contract authority.  So it's just a matter of being able to integrate all these projects and be able to deliver them all on the ground in a coordinated way.

 

            For instance, you don't want to be paving a road, then coming in and digging it up and putting a sewer pipe in.  So we're making sure it all fits together, and we're making sure that the Iraqi leadership in an area are a part of the solution.

 

            Yes, sir?

 

            Q     Could you give me the time frame of when the percentage of employees showing up dipped down to 25 percent?  And has it gradually come back since that time period?

 

            ADM. NASH:  Yeah.  It was pretty much around the 9th of April, 9th, 10th of April, you know, when all the security problems were -- we experienced those in Iraq.  And it's come back since.

 

            Q     Was that 25 percent of approximately 12,000?

 

            ADM. NASH:  It was 25 percent of 10,000.

 

            Q     Ten thousand.

 

            ADM. NASH:  Yeah, I think, as I recall.

 

            Yes, sir?

 

            Q     Admiral, if there are unscrupulous people out there who are taking advantage of even the most benevolent efforts, like PMO, oil- for-food program, what are you doing to make sure that this 18.6 billion (dollars) isn't falling off the back of a truck, being stolen off a site; that there aren't contractors -- outside contractors or Iraqis that are ripping you off?  What kind of precautions are you taking?  What audit mechanisms are there?

 

            ADM. NASH:  Well, everything is audited by several auditing entities.

 

            Corruption is a challenge -- to make sure that that doesn't happen.  And that's one of the things that I've been told is my mission.  And I've asked a lot of experts on this, and they all tell me that vigilance is what you have to do.  You have to keep paying attention, you have to keep auditing, you have to keep watching and paying attention.

 

            And you know, we have the IG there.  We have DCAA.  We have -- GAO is coming to visit us.  And there's lots of others.  So we all just have to be vigilant.  I don't know any other way to deal with it.

 

            Q     Have you uncovered any instances of people trying to abuse your system?

 

            ADM. NASH:  Not so far.  Not so far.  And when I've met with each of these Iraqi groups -- often I meet with Iraqi contractors and I tell them it's the bottom line:  no -- we want quality construction, we want it on time, and no corruption.  And you see a lot of heads shake up and down when I say that, you know, that they agree.  So yes, there are unscrupulous people in the world.  I'd agree.

 

            Yes, sir?

 

            Q     Just walk us through and refresh the dollars obligated. You've got 18.6 billion (dollars).  You've got about 9 or 10 (billion dollars) of that, and AID's got part of it.  Just review the state of play.

 

            ADM. NASH:  Yeah.  Let me make sure I got the right chart here.

 

            Essentially, the money -- there's 18.4 (billion dollars).  You remember 200 million went off to other things, and that's -- so that's not our responsibility.

 

            Then, out of that 18.4 (billion dollars), 5.8 (billion dollars) was for what we call non-construction.  And 1.8 (billion dollars) of that 5.8 (billion dollars) is for what I call capacity building, like democracy building and help with justice system and all those things where -- and then the remainder is $4 billion worth of goods and services and training -- outfitting for the new Iraqi security forces; parts and equipment for the oil, water and electricity sector; health, about $325 million worth of equipment and medicines in there.  So that's all non-construction.

 

            The last piece, then, is the construction, 12.6 billion (dollars), of which we have the $4 billion reserve, which we're going to -- you know, decisions will be made in the future about what's going to happen.  And that leaves about 8.6 billion (dollars) for construction.

 

            Q      Of which 4 billion (dollars) is already obligated?

 

            ADM. NASH:  Four billion (dollars) is total for obligation of construction and non-construction.  And for the -- I'll get you the figure.  I think it's in your -- in the handouts you'll get afterwards.  It will show exactly on construction -- it's about half of that.  And --

 

            Q     Does that include the Bechtel money, the follow-on Bechtel contract --

 

            ADM. NASH:  Yes, yes it does.

 

            Q     So that's the bulk of that actually, 1.7 billion.

 

            ADM. NASH:  Well, they don't have 1.7 billion right now; they have just a little over a billion.  But we have other contractors in place that have the rest of the money, so it's spread across various and sundry executing agents.

 

            Q     So how much could be awarded -- (inaudible) -- 12.6, 4 billion --

 

            ADM. NASH:  As you recall, we have $5 billion dollars worth of cost- contracts, and in those cost-contracts, we load in task.  And each one of those tasks is negotiated and then that becomes an obligation.  So the $5 billion is just lids on the bucket, if you will.  So we have not obligated $5 billion; we're obligating it as we go.  And so each time we get a negotiated -- a task that's negotiated, then that becomes an obligation.  And the same with AID and the Bechtel contract.  We give them a task and they negotiate it with Bechtel.  So that's the way we decide how much we have.

 

            As you recall, I said we will have $5 billion obligated by 1 July in construction and $5 billion in non-construction.

 

            Q     (Off mike) -- when you say there's 2 billion obligated, you're counting the January USAID reconstruction 2 award?

 

            ADM. NASH:  Yeah, but their contract is just like ours -- the others.  It's a 1.8 billion cap, and so they right now, they have taskings for over a billion dollars.

 

            Q     (Off mike) -- we're talking about a billion under the money that the PMO is doing.  We're talking about a billion that's been obligated about.

 

            ADM. NASH:  Yeah, and remember that right now, we've been asked to do two things in the PMO:  We have overall program management responsibility for the 18.4 billion and then we have an execution responsibility in addition for the 5 billion that we've talked about before.  So it's a little confusing because we have both responsibilities.

 

            Q      Where has the intimidation of workers been the most severe and who's been doing it?

 

            ADM. NASH:  Well, that's a good question.  I guess the enemy has been doing it.

 

            Q     No, I mean, has it been in Fallujah mainly with the remnants of the Saddam regime, or have you had equal troubles with the Mahdi Army or --

 

            ADM. NASH:  I think it depends -- and that's kind of one of the things I wanted to share with you.  Like I said, I just finished traveling all over the country and I've been to every governate and the security situation varies from governate to governate.  And so it kind of depends on the governate, you know, as to how much harassment is occurring.  And I'll get you those figures, but I don't think it's -- gee, off the top of my head, I can't tell you where it's worse one place or another.

 

            Obviously, Baghdad is a very, you know, very active place.  You get way up north and it's not quite so difficult in terms of security. So it kind of depends on where you are.  But I don't have any percentages by governate.

 

            Yes, ma'am?

 

            Q     How are the projects distributed geographically?  Are they mostly clustered in Baghdad?  Are you seeing more money going into places that are a little more intense in activity, like Fallujah?

 

            ADM. NASH:  Well, as we put this program together, we looked at the infrastructure, and there's lots of work to do in the infrastructure to restore it.  As you recall, we had -- the problem has been neglect for 35 years, and then the looting was what really did the damage to the infrastructure.

 

            So we began by looking at what in the infrastructure needs repair.  And we also have the guidelines of the legislation, which has amounts of money in each one of 10 tranches or each one of 10 sectors. So we prioritized within each one of these sectors.  For instance in water, we prioritized the projects.  As you recall, we have over 5,000 projects that we identified, of which we could do 2,300.  So it kind of depended on where we were.  And so that's kind of the way we put this whole program together.  Once we did that, then we looked at how it's laid out in terms of governate and population.  And it's pretty even across the board.  But we didn't start out to do that; we started out to fix the infrastructure and do the most urgent first and then work our way down.

 

            Q     So there's been no political consideration given to well, Fallujah's a hot spot, so let's throw more money there and see if we can win some hearts and minds that way?

 

            ADM. NASH:  Well, I think we want to win the hearts and minds of everybody, and that's why we're trying to start everywhere as soon as we can.  And that wasn't my -- you know, I wasn't involved in any conversations like that, and I don't think there's been any differentiation between areas, it's been, "Let's help the Iraqis."

 

            Yes, sir?

 

            Q     Do you sense that Iraqis who are complaining about still the lack of power and a really bad communication system are being unreasonable or impatient?  Or how do you explain the fact that many Iraqis are complaining about the pace with which reconstruction is going?

 

            ADM. NASH:  My sense, in talking to all of them, is that, yes, they wished it had been done faster, but they understand that we've started now.  I always get asked that question in every governate -- what's taking so long?  They always compare it to Saddam.  They say, you know, Saddam had things up and running very quickly.  And I always say well, you know, Saddam subscribed to some incentives that we don't subscribe to as a modern society, a sensitive society.  And I tell them there's lots of reasons that it's taken us a while to start, but we are started and we're going, and that's fine with them.

 

            And they are like us -- or like me, they're interested in their families, they're interested in water that doesn't make their children sick, they're interested in health care that they deserve, they're interested in education because they see that as the future of Iraq, and they're in interested in other things that people are interested in when they're operating kind of at the base level of wanting just to have the general essential things that they need for life.

 

            Q     Has the Abu Ghraib prison scandal affected your ability to do your work in any way or affected the Iraqis you deal with?

 

            ADM. NASH:  No.  And because we're always talking about projects and positive things, we don't ever get into that conversation.  We just talk about things we're doing for them, and I've really not engaged in any conversations about that.

 

            Yes, sir.

 

            Q     Admiral, on the flip side of John's (sp) question, you had a pressure to spend faster and faster.  Are you under any pressure to moderate the -- graduate the degree that you put out these contracts because the economy just can't handle that much money that fast?  Do you have to, in any way, pace this because if you dump $19 billion in an economy like that it would just overheat, or is that not a consideration?

 

            ADM. NASH:  Well, I think it's a consideration, and politics and economics and all those things we got to be sensitive to.  Even though I'm a construction stiff, I got to pay attention to those kind of things.  But I'm not concerned that the economy can absorb it.  We need to work with them and we need to make sure that we're doing it in a sensitive way.  We need to make sure that we're maximizing whatever we use in Iraq that we can.  And the Iraqis are responding very positively to that, and I think they realize that this is a large program and it's going to have a big impact.  But I think all of them understand that there are secondary and tertiary effects that they're going to see; you know, people that have a job and they buy a car or they buy a washing machine or they go out to dinner.  And so they're anxious for it to get started because they see it as the -- what I tell them is this is to kind of kick-start your economy, and they're looking forward to it because they see a bright future.

 

            Q     Admiral, you said that you've heard some from the Iraqis saying when is it going to get started.  Have you heard any of that from U.S. officials in CPA, the Congress, sort of saying --

 

            ADM. NASH:  Or the press?

 

            Q     Or the press?

 

            Q     Yes.  (Chuckles.)

 

            ADM. NASH:  No, you know, I've -- I mean, I've heard it, but I -- you know, I think we've acted in a responsible way.  There were a lot of requirements to make sure we did this correctly and did it in accordance with the -- you know, with federal law, and I think we're doing that.

 

            And when you stop and think, we've awarded $5 billion worth of contracts in construction in a very short period of time.  We've obligated $4 billion in about three or four months.  We've got in place -- 250 people are helping us program manage, and these are all people that have come to a very un-benign or non-benign environment to go to work and they're performing magnificently.

 

            So for those people who say, gee, it's taking you a long time, I'd lay our record up against anything that's happened.  I think we've acted responsibly in terms of how we've proceeded, and we've absolutely moved faster than most people thought possible.

 

            STAFF:  We're going to need to wrap it up.  Let's see if we can make this the last one.

 

            Q     In what areas have you made the most progress, and where have you made the least in terms of restoring prewar electricity levels or water purification, sewage issues?  Just give us --

 

            ADM. NASH:  Yeah, I think we've made the most progress in electricity.  And you see that; we're producing more electricity than they had prewar, and we're going to be at 6,000 megawatts.  If you stop and think about electricity, in the country it's capable of generating 10,000 megawatts, if you look to just the name plates on all the equipment, and we were struggling to get 3,000 out of it last summer.  So you can tell what kind of shape the thing was in, and the whole process -- system was in.  So now we're at -- you know, we're going to be at 6,000 this summer and that's really good.

 

            Now, is that going to make everybody happy?  No, because the demand has been growing.  We're buying air conditioners, we're buying things that -- TV sets and all that sort of stuff.  So we are making progress in electricity, we are making good progress in security.  We haven't started the rest of the things yet, but we're getting them under way; and that will be in water, it will be in health, it will be in education -- all those things that they think are very, very important.

 

            Q     Also -- (inaudible) -- water.  That was a big issue early on.

 

            ADM. NASH:  Well, if you look at the way the money's laid out over the -- the way it's apportioned, we're not that far behind.  So I -- you know, but obviously, how can you measure that?  We want to make sure that we -- yeah?

 

            Q     Just a quick follow on that.  Do you have a figure for how much of the generated electricity is actually used by U.S. forces and by Iraqis?

 

            ADM. NASH:  No, I don't have that number, but maybe we could get -- I don't know, maybe somebody can get that for you.

 

            Q     You know, 6,000 megawatts is the target.  Where are you at now as you approach that target of 6,000 on July 1st?

 

            ADM. NASH:  I don't know.  It's -- you know, it's in the -- you guys can give it to them.  It's in the information.

 

            Q     The next big tranche of contract awards, can you clarify that, when the next -- the $4 billion, I guess, that's going to be for construction or --

 

            ADM. NASH:  I don't know, but I think that conversation is going to start very soon, and so we ought to be able to let you know here before long.

 

            Q     And that's for the next round of construction projects?

 

            ADM. NASH:  Right.  Right.

 

            Q     Thank you.

 

            STAFF:  All right, thank you.   

 

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