U.S. contractors have been steadily increasing their
investment as part of the cost of doing business in Iraq.
U.S. officials said American and other firms selected for Iraqi
reconstruction projects have been spending up to 50 percent of contract
funding on security. They said the security costs have increased rapidly
amid the Sunni and Shi'ite insurgency campaigns in Iraq.
"When the program was first contemplated, we had envisioned expending
approximately 30 percent of every dollar in terms of overhead cost, to
include security activities," Charles Hess, director of the Project And
Contracting Office, said in a video teleconference from Baghdad on Thursday.
"And what we are looking at now varies, frankly, across all of the sectors
in terms of security activities and overhead."
Hess said that in some cases contractors awarded reconstruction projects
in Iraq increased their security costs slightly over the last few months. In
other areas, which he did not identify, the increase in security has been
"In some cases, we're seeing a much more dramatic impact, on the order
of 10 to 20 percent," Hess said in a briefing organized by the Defense
Department. "And it's those areas that we are really focusing our attention,
to make sure we are
investing our money wisely and that we're not just investing in security
costs, but we're investing in projects that truly make a difference and
truly require us to expend that amount of money to get those projects
The United States has transferred $3.46 billion of an $18.4 billion
Iraqi reconstruction fund for additional security. Officials said the United
States has overseen more than 700 projects, most of them stuck because of
repeated insurgency attacks.
Out of 13 sewer projects, officials said, only one has been completed.
They said five out of 28 water treatment plants have been completed.
"The security situation here in Iraq has made it much more difficult
than I think than anyone anticipated to get the reconstruction work done,"
Bill Taylor, head of the U.S. embassy's Iraqi Reconstruction Management
Office, said. "The security costs certainly show up in dollars, but they
also show up in schedules."
Officials said the U.S. goal was to divert about 20 percent of the Iraqi
reconstruction fund to bolster Iraqi military and security forces. At the
same time, they said, 62 border forts and nine military bases were under
construction in Iraq.
About $1.8 billion of the $3.46 billion siphoned from the Iraqi
reconstruction fund would be allocated for the training and equipping of
Iraq's military and security forces, officials said. They said that so far
39,000 Iraqi police 14,000 Border Police, three army battalions and eight
Iraqi National Guard battalions have been trained and equipped.
The U.S. Army has increased security measures to help contractors and
organized huge convoys for the transportation of material and equipment to
reconstruction project sites in Iraq. Officials said these convoys usually
move at 10 miles an hour and present easy targets for insurgents.
On Oct. 6, a U.S. soldier with the 13th Corps Support Command, a unit
based in Fort Hood, Texas, was killed and two others were injured during an
attack on a supply convoy near Faluja. The military said this was the second
attack in three days on the unit's convoy. On Oct. 4 another soldier from
the unit was killed and two others were injured in a similar attack near
"These kinds of movement, these kinds of attacks on these kinds of
convoys stretch out, clearly, the work on reconstruction," Taylor said.