AN EXPENSIVE SCRAP YARD IN BAGHDAD
Background: By December 2011, the full withdrawal of U.S. troops from Iraq was to occur. Concurrently, property that was being used by the U.S. military was to be turned over to the Iraqi government.
Issue: With less than 60 days until the handover, a parcel of land that was being used to house discarded property had not been cleared. Failure to clear the land would not only bring embarrassment to the U.S. Government, but the Iraqi government would have been able to levy fines and penalties totaling millions of dollars ($5,000,000 at a minimum with the number increasing every month). However, all available in-country resources were fully committed towards other projects and it would not have been feasible to bring in additional resources to assist because of Iraqi imposed visa restrictions.
Insight: When we were brought on, we were given the existing playbook (which had not been working). We realized that the old strategy, trying securing an Iraqi buyer for the discarded property, was not working. No matter how many times the negotiations began, they would always get derailed. Our major insight was that the negotiations were not incentivized to succeed. The discarded property was valuable, very valuable. But the fines and penalties levied by the Iraqi government were more lucrative. We reasoned that the Iraqi buyers would profit twice from the deal. First, by getting a portion of the fines and penalties and second, by buying the discarded property at fire-sale prices when the U.S. Government eventually agreed to just get rid of the property at any loss. This also helped explain, in part, the restrictions placed by the Iraqi government in bringing in additional resources to help with removal. So instead of looking outward, we decided to focus inward.
Strategy: Although the U.S. military was leaving, there were still other U.S. agencies that would be remaining with land of their own. We also reasoned that the Iraqi restrictions hampering us (inability to bring in additional resources) were also hampering other U.S. agencies. In essence, the very leverage used by the Iraqi government against us, could be turned back against them. We began an intensive outreach to the other U.S. agencies to get their resource needs given the restrictions imposed by the Iraqi government. We then did a deep dive of the scrap in the yard, and created a triage system based on how easily it could be re-purposed matching the scrap to the various engineering and security needs of the other U.S. agencies.
Outcome: Within 45 days we managed to re-purpose and re-locate over 600 pieces of equipment worth over $2,000,000 to other U.S. agencies. More important than the money saved was the time saved in trying to bring in similar equipment given the restrictions. At a time when security was at a premium, delays could have led to disastrous consequences. The parcel of land was completely cleared and turned over to the Iraqi government without any penalties or fines saving an additional $5,000,000.