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While billions have been provided to rebuild Iraq's oil and electricity sectors, Iraq's future needs are significant and sources of funding uncertain. For fiscal years 2003 through 2006, the United States made available about $7.4 billion and spent about $5.1 billion to rebuild the oil and electricity sectors. The United States spent an additional $3.8 billion in Iraqi funds on the two sectors, primarily on oil and electricity sector contracts administered by U.S. agencies. However, according to various estimates and officials, Iraq will need billions of additional dollars to rebuild, maintain, and secure Iraq's oil and electricity sectors. The Ministry of Electricity estimates that about $27 billion will be needed to meet the sector's future rebuilding requirements; a comparable estimate has not been developed by the Ministry of Oil. Since the majority (about 70 percent) of U.S. funds has been spent, the Iraqi government and the international donor community represent important sources of potential funding. However, prospects of such funding are uncertain. First, the Oil and Electricity Ministries have encountered difficulties spending capital improvement budgets because of weaknesses in budgeting, procurement, and financial management. As of November 2006, the Ministry of Oil had spent less than 3 percent of its $3.5 billion 2006 capital budget to improve Iraq's oil facilities. Second, Iraq has not made full use of potential international contributions and it is unclear what additional financial commitments, if any, will be provided to Iraq's oil and electricity sectors as part of a new international compact (agreement), according to U.S. officials. As of March 2007, donors had committed $580 million in grants for the electricity sector and had offered loans for oil and electricity projects; however, Iraq has not accessed these loans in part due to concerns about its high debt burden.
In fiscal year 2003, the Department of Defense expects to spend more than $18 billion to develop, acquire, and operate satellites and other space-related systems. Satellite systems collect information on the capabilities and intentions of potential adversaries. They enable military forces to be warned of a missile attack and to communicate and navigate while avoiding hostile action. And they provide information that allows forces to precisely attack targets in ways that minimize collateral damage and loss of life. DOD's satellites also enable global communications, television broadcasts, weather forecasting; navigation of ships, planes, trucks, and cars; and synchronization of computers, communications, and electric power grids. Congress requested that we review reports we issued on satellite and other space-related programs over the past two decades and identify common problems affecting these programs. The majority of satellite programs cost more than expected and took longer to develop and launch than planned. In reviewing our past reports, we found that these results were commonly tied to the following problems. Requirements for what the satellite needed to do and how well it must perform were not adequately defined at the beginning of a program or were changed significantly once the program had already begun. Investment practices were weak. For example, potentially more cost-effective approaches were not examined and cost estimates were optimistic. Acquisition strategies were poorly executed. For example, competition was reduced for the sake of schedule or DOD did not adequately oversee contractors. Technologies were not mature enough to be included in product development. Several factors contributed to these problems. First, DOD often took a schedule-driven instead of a knowledge-driven approach to the acquisition process. As a result, activities essential to containing costs, maximizing competition among contractors and testing technologies were compressed or not done. Second, there is a diverse array of organizations with competing interests involved in overall satellite development--from the individual military services, to testing organizations, contractors, civilian agencies, and in some cases international partners. This created challenges in making tough tradeoff decisions, particularly since, for many years, there was no high-level official within the Office of the Secretary of Defense dedicated to developing and enforcing an overall investment strategy for space. Third, space acquisition programs have historically attempted to satisfy all requirements in a single step, regardless of the design challenge or the maturity of technologies to achieve the full capability. This approach made it difficult to match requirements to available resources (in terms of time, money, and technology). Other factors also created challenges for the satellite acquisition programs we reviewed. These include a shrinking industrial base, a declining space workforce, difficulties associated with testing satellites in a realistic environment, as well as challenges associated with launching satellites.
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