Lieberman Seeks Information on USAID’s Selection of Companies Allowed to Bid on Iraqi Construction Contracts

WASHINGTON - Governmental Affairs Committee Ranking Member Joe Lieberman, D-Conn., Tuesday requested information from the U.S. Agency for International Development on how the agency selected companies invited to bid on its construction contracts to rebuild post-war Iraq. In an article published in the Wall Street Journal on March 10, 2003, it was reported that USAID limited the number of companies eligible to bid on a massive construction contract in Iraq, estimated to be as high as $900 million dollars.

According to the article, only a “handful” of companies were asked by the agency to submit bids on the contract. Lieberman’s letter seeks to find out more about the process the agency used to identify the companies selected to bid on this and other contracts in Iraq. Weekend news articles indicated that the agency has narrowed its selection to two companies.

“While I am pleased that the Bush Administration is moving forward with plans to help the Iraqi people build a more prosperous and free nation,” Lieberman said in a letter to USAID Inspector General Everett L. Mosley. “I am nevertheless concerned by reports about the manner in which at least one of these construction contracts is being awarded by your agency.”

Lieberman also asked the IG whether any USAID employees had contact with those companies prior to their selection. Below is a copy of the letter:

April 1, 2003

The Honorable Everett L. Mosley
Inspector General
The United States Agency for International Development
Washington, D.C. 20523

Dear General Mosley:

I have read with interest recent news articles concerning construction contracts that the United States Agency for International Development (USAID) and other U.S. Government agencies are awarding for the rebuilding process in a postwar Iraq. While I am pleased that the Bush administration is moving forward with plans for helping the Iraqi people build a more prosperous and free nation, I am nevertheless concerned by reports about the manner in which at least one of these construction contracts is being awarded by your agency.

According to a March 10, 2003 article in the Wall Street Journal, USAID has distributed a 13-page “request for proposals” seeking bids on a massive infrastructure improvement contract that is estimated to be worth as much as $900 million. This request detailed several projects, including the construction of roads and bridges, and the renovation and repair of hospitals and schools within Iraq. The Journal article also notes that only a “handful” of companies were asked by the agency to submit bids on the contract. These companies included the Bechtel Group of San Francisco, California; the Fluor Corporation of Aliso Viejo, California; The Halliburton Corporation’s Kellogg Brown & Root division of Houston, Texas; the Louis Berger Group of East Orange, New Jersey; and the Parsons Corporation of Pasadena, California.

More recent news articles indicate that the agency has narrowed its selection to two companies. As you know, the Competition and Contracting Act generally requires that federal government contracts be awarded through a full and open bidding process. This process ensures that all contractors have an opportunity to offer their services to the government, while maintaining that taxpayer funds are spent in an effective and efficient manner.

There are some limited instances where the bidding process is truncated or restricted due to an urgent and compelling need. In light of the volume and complexity of the work that will be required to assist the Iraqi people in rebuilding and improving their nation, and the speed in which it must be completed, it is possible that a limited or more restricted bidding process for some construction contracts may be warranted. However, due to the size and importance of these contracts, I ask that you address the following questions related to the bidding process:

  • What was the process that USAID used to develop “request for proposals” for any and all contracts related to the rebuilding efforts in Iraq?
  • How did USAID select the companies eligible to bid on these contracts? What criteria did it use in the selection process?
  • Was this process consistent with the agency’s procurement rules and practices, and all other applicable laws and regulations?
  • Was the process used by USAID to select the companies bidding on the Iraqi contracts the best method available for achieving the goals of the contract while protecting the interest of taxpayer funds?
  • Did any USAID employee have contact with any of the companies that were selected before they were asked by the agency to submit a bid? If so, who were the employees, which companies had contact, and what was the nature of their contact?
  • Did any USAID employee have contact with any official or employee of the United States government, outside of USAID, regarding the companies selected to bid on any of the contracts related to the rebuilding efforts in Iraq? If so, who were the employees, who did they have contact with, and what was the nature of their contact?
  • I look forward to your prompt response to the above questions. Please contact Patrick Hart or Kevin Landy of my staff at (202) 224-2627 if you have any questions.

    Sincerely,

    Joseph I. Lieberman
    Ranking Member