US delays tenders for $28 billion Iraq work

3.00pm - By SUE PLEMING


WASHINGTON - The Pentagon is delaying the issue of US$18.6 billion ($28.7 billion) in tenders to rebuild Iraq as officials argue over which firms can bid and whether US procurement laws are being followed, defence officials said on Monday.

A slew of contracts was set to be released last Friday by the Pentagon office managing contracts for the US-led Coalition Provisional Authority in Iraq, but these were delayed, probably until later this week.

"We want to make sure they (contracts) are right before we put them out on the street," a defence official told Reuters, when asked about the delay. "We are looking for consistency across the board."

The US government was criticised for its handling of the first round of contracts to rebuild Iraq and has promised a fair and transparent bidding process this time.

Countries that helped the US-led effort to oust Saddam Hussein felt their firms were unfairly excluded while Democrats at home charged favouritism and cronyism.

Last Friday an announcement on a US government procurement website said there was a delay in the tenders while "high-level policy decisions" were being taken.

Asked about these "high-level" decisions, the defence official said lawyers were trying to ensure the different government departments issued tenders that were consistent.

However, one military source said some officials were at odds over whether companies from countries that opposed the US-led war with Iraq should be excluded from such deals.

There is also a discussion over which coalition countries should be included and what level of commitment was required to give those countries access to the costly, dangerous work.

"Basically, there has to be a decision about this before we can move ahead with anything. At the moment there has not yet been a policy decision at the high levels over who is in and who is out," said the source, who asked not to be named.

Retired Adm David Nash, who is in charge of the CPA's Programme Management Office, said last month only companies from US and coalition countries could bid for prime contracts. This meant French and German firms, whose governments opposed the war, could only bid on lesser, sub-contracts.

Contracts to rebuild Iraq are being issued by several US government departments, which have varying procurement rules. For example, the US Agency for International Development can only award prime contracts to American firms, who may in turn sub-contract to others.

USAID advertised in October a follow-on contract for infrastructure work in Iraq, which will replace one held by San Francisco construction company Bechtel. Last week, USAID said it had raised the amount of that contract to US$1.67 billion from the original US$1.3 billion.

Winners of the next round of US government contracts are expected to be announced by Feb 3, 2004. Asked whether the tender delay would result in pushing back the award dates, the defence official said he did not know.

"But every day we are waiting to get the RFPs (requests for proposals) there is a delay for the Iraqi people in rebuilding their country," he said.

- REUTERS


Herald Feature: Iraq