Pasadena contractor faces U.S. scrutiny for Iraq work

Parsons Corp., the top U.S. construction contractor in Iraq, could be barred from government work if the company doesn’t show it has stringent safeguards against committing fraud and abuse, the Army said.

Robert Kittel, the Army official in charge of contractor suspensions and debarments, sent a “show cause” letter to Parsons Chief Executive James McNulty demanding information in 10 categories of company management.

The U.S. military requires that contractors “conduct themselves with the highest degree of integrity and honesty,” and audits of Parsons’ work raised questions about the “effectiveness” of the company’s “standards of conduct and internal control systems,” Kittel wrote March 27.

The allegations in the audits “cast doubt on Parsons’ responsibility as a contractor and could provide the basis for action related to Parsons or its affiliates,” he wrote.

Pasadena-based Parsons has received $733 million for work in Iraq’s postwar reconstruction.

Audits of Parsons’ work “uncovered a number of significant problems with prisons, hospitals, public health clinics,” said Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction.