Bipartisan Amendment Calls for Explanations on Awarding of Iraqi Reconstruction Contracts

Washington, DC – If federal agencies plan to award contracts for Iraqi reconstruction projects without an open, competitive bidding process, a bipartisan group of U.S. Senators wants the American public to know why. Senators Susan Collins (R-Maine), Ron Wyden (D-Ore.) and Hillary Rodham Clinton (D-N.Y.) today introduced an amendment to the supplemental appropriations bill that would require the United States Agency for International Development (USAID) and other federal agencies to make public the documents used to justify any decision to waive normal requirements for open and fully competitive bidding. As well as requiring this disclosure before any new reconstruction contracts are awarded, the amendment also specifically requires USAID to make public the justification and approval documents it recently used to exempt $1.7 billion in contracts from full competition.

“When the federal government awards contracts to rebuild Iraq, it should do so in the light of day. The public deserves to know that its tax dollars are being spent wisely, and a fair, open process provides the assurance needed,” Collins said. “Our amendment shines light on a process that has been alarmingly cloaked in darkness.”

“Too much taxpayer money is at stake in rebuilding Iraq to allow Federal officials to use a secret process to hand-pick companies to handle this work,” said Wyden. “If Federal agencies aren’t going to use a full and open bidding process, then at a minimum they should have to prove why competition isn’t the proper way to award these contracts.”

“It is the responsibility of Congress to ensure that the funds we appropriate for reconstruction in Iraq are spent in a fair and open manner. This amendment provides an element of accountability so that Congress and the American people can have a full understanding of how these contracts are being awarded,” said Clinton.

The amendment also states that before FY2003 supplemental appropriations funds can be used to pay for Iraqi reconstruction contracts awarded without an open, competitive bidding process, the justifying documents must be published in the Federal Register or Commerce Business Daily or otherwise made available to the public. A brief description of the dollar amount and scope of the contract and a description of how the agency identified and solicited companies to perform the contract’s functions would also have to be published. 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.

In recent weeks, USAID hand-selected companies in a secret bidding process to award four separate Iraqi reconstruction projects totaling $1.7 billion. In the past, the U.S. General Accounting Office (GAO) has found that contractors had not done enough to contain costs on projects involving logistical and engineering support in areas where the U.S. military was involved.

According to a September 2000 GAO report, 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 Senators’ amendment will ensure that taxpayers get the best value for their money. It will also allow other companies who might be able to compete for Iraqi reconstruction work to challenge the closed or non-competitive process if the standards for exempting contracts from competition are not met.

Press Contacts: Andrea Hofelich (Collins) 202-224-4751 Carol Guthrie (Wyden) 202-224-5244 Philippe Reines (Clinton) 202-224-2243