Page 248 - Global Project Management Handbook

LESSONS LEARNED: REBUILDING IRAQ IN 2004 12-9

minister-driven. This later proved to be a problem, and the solution is discussed below
in the section entitled, “Community-Based Programs”

Get the Money
Once the projects were defined and approved by the Iraqi ministers, the next step was to
go back the Office of Management and Budget (OMB) to get the money. First, a little
background. When Congress passed Public Law 106-108 that funded the $18 billion
Iraq rebuilding effort, the money was placed with OMB, which manages the U.S.
government’s money. Also, the CPA organization functioned under the Department of
Army (DOA), which functioned under the Department of Defense (DOD). To get
money released from OMB, the CPA wrote task orders that described the projects to
be done and the estimated project costs. The task orders where then sent electronically
to the DOA in Washington, where they were approved and forwarded to the DOD,
which also approved each task order and then sent it along to OMB. OMB would
review the task orders, and if the task orders supported using the money in accordance
with the law passed by Congress, then OBM would release the funds to the DOD,
which would move the money to the DOA, and then the funds would move to the
CPA. During the program, it became a critical success factor to track the status of
budgeted funds. Various terms to do this are as follows:
● Appropriated. Congress has passed a law and the President has signed the law mak-
ing money available.
● Apportioned. OMB has approved specific task orders and moved the money to imple-
mented the approved task orders to CPA.
● Committed. The CPA has committed the funds to a specific project.
● Obligated. The CPA has signed a contract with a DB firm to build the project, thus
“obligating” the money. Note that often while we say $10 million might be “committed”
to a specific project, the CPA would “obligate” a lesser amount, say, $3 million, to a con-
tractor to begin the project. The remaining $7 million would not be obligated until a
detailed project scope, schedule, and budget were defined.
● Definitized. Once a detailed scope, schedule, and budget were in place, the project was
said to be definitized.
● Disbursed. Finally, once work had been completed, approved, and invoiced, funds
would be disbursed to the contractor.

In general, in the summer of 2004, the financial status was as follows: Project defini-
tions were completed in the spring, and task orders (requests for money to be apportioned
for the projects) were rapidly being developed and sent back to Washington. Only a few
projects, about 30 or 40, had started. In the mean time, the press was publishing reports
that while $18 billion had been allocated to rebuild Iraq, less than $1 billion had been
spent or disbursed. While this was true, it was a misrepresentation of the situation.
In response to the negative press reports indicating the slow progress of the
rebuilding program, the PMO began to obligate money faster, which was a mistake.
For example, if money for a $10 million water-treatment facility had been apportioned,
we would obligate the entire $10 million to the DB contractor to do the project as
opposed to obligating, say, $3 million and waiting to obligate the remaining $7 million
once the scope, schedule, and budget of the project had been finalized. However,
doing this allowed the PMO to report to Congress, the DOA, the DOD, and the press
that money was being obligated faster.