Lieberman Calls for Justification of Closed Bidding on Iraq Reconstruction,
Legislation Would Require USAID to Publicly Explain How and Why it Selected Contractors

WASHINGTON – Senator Joe Lieberman, D-Conn, co-sponsored legislation Thursday, April 10, that would compel federal agencies to publicly account for decisions to award Iraqi reconstruction contracts without an open, competitive bidding process. The “Sunshine in Iraq Reconstruction Contracting Act of 2003,” a bi-partisan bill co-sponsored by Senator Lieberman, sets out requirements for the United States Agency for International Development and other Federal agencies to publicly justify any closed bidding process for Iraqi reconstruction work. In recent weeks, USAID and the Defense Department used a closed no-bid or limited bid process to award several Iraqi reconstruction projects totaling $1.7 billion.

“Contracts to help rebuild Iraq will cost the government billions of dollars,” said Lieberman. “When this much money is on the line, taxpayers deserve to know exactly how their money is being spent, why particular companies are getting favorable treatment, and why cost-saving bids are not being taken.”

The Sunshine in Iraq Reconstruction Contracting Act of 2003, (S. 876) was introduced by Senator Ron Wyden, D-Ore. Other cosponsors are Senators Susan Collins, R-Me., Hillary Clinton, D-N.Y., and Robert Byrd, D-W.Va. The Act would require federal agencies to publish in the Federal Register or Commerce Business Daily documents justifying any non-competitive bidding process. The published information would disclose the amount of the contract, a brief description of the contract’s scope, and a list of companies selected for the closed bidding process and explanations of how and why the agency chose those contractors. The head of a department or agency would be able to withhold publication of any classified document or redact any part of a document that contains classified information, but Congress would review any withheld information.

In the past, the U.S. General Accounting Office found that contractors did not do enough to contain costs on construction projects involving the U.S. military. A September 2000 GAO report found that federal officials “frequently have accepted the level of services the contractor provided without questioning whether they could be provided more efficiently or less frequently and at lower cost.”

The Sunshine in Iraq Reconstruction Contracting Act of 2003 was referred to the Senate Committee on Governmental Affairs, of which Senator Collins and Senator Lieberman are the Chair and Ranking Member, respectively. On April 1, 2003, Lieberman sent a letter to USAID Inspector General Everett L. Mosley, requesting information on how the agency selected companies invited to bid on its construction contracts to rebuild post-war Iraq. On April 16, Lieberman wrote to USAID Administrator Andrew S. Natsios to ask why USAID waited until January of 2003 to begin the formal contracting process for rebuilding Iraq.