US softens stand on who can get Iraq contracts

3.30pm - By SUE PLEMING

WASHINGTON - With bidding likely to open this week on US-funded contracts to rebuild Iraq, the Pentagon appeared today to soften its stand on barring companies from countries that opposed the war and said a list of eligible nations for the business might be revised.

A Pentagon ruling last month excluded firms from nations that did not support the war, a decision that riled traditional allies such as France and Germany, which opposed America's decision to invade Iraq without UN approval.

The Pentagon told prospective bidders via a government procurement website on Monday (www.fedbizopps.gov) that a formal list of eligible countries for projects funded by $18.6 billion in US funds was being reviewed.

"This list is under further consideration, however, and may be revised," said the document issued by the Office of the Secretary of Defence, which said the original list of 63 countries remained valid in the meantime.

A document released on the same website earlier on Monday said contracts were open only to the United States, coalition partners, Iraq and troop-contributing nations.

Diplomatic sources in Washington said they had noticed signs of a softening by the US government over who could apply for prime contracts following a mission by ex-US Secretary of State James Baker to Europe last month to seek forgiveness of Iraq's crippling debt.

The Pentagon and White House denied publicly there was a shift in policy, but diplomatic sources and some officials said the United States was trying to adopt a more liberal definition of who belonged to the coalition, suggesting countries that agreed to restructure Iraq's debt might be eligible.

White house spokeswoman Claire Buchan said the Pentagon document reflected President George W Bush's sentiments that "circumstances can change" as to who is eligible to participate in the contracts.

Last month, the Pentagon listed 63 countries eligible for contracts funded by Congress, ranging from usual trading partners such as Britain, Australia and Denmark to nations such as Eritrea, Palau and the Solomon Islands.

A defence official said the list of countries was always open for review and nations who provided forces, funding or showed political will in Iraq would be eligible.

"We have said this is an open list and it is up to countries to determine whether they want to be part of the coalition," said the official.

Asked specifically whether France, Germany, Russia and Canada would be included on an updated list when bidding officially begins probably this week, the official said he did not know.

During his week-long tour, Baker visited France, Germany, Italy, Great Britain and Russia, where he said he made progress obtaining commitments to substantially reduce Iraq's US$120 billion ($180.96 billion) debt.

Countries barred from prime contracts funded by the US taxpayer have complained the US government cannot expect them to make generous gestures such as forgiving Iraq's debt while at the same time excluding their companies from lucrative rebuilding work.

Bidding is likely to open up this week on a slew of US-government contracts to rebuild Iraq, starting off most likely with about US$5 billion in construction projects.

The Pentagon document said requests for proposals, or formal tenders, were expected to be advertised by Jan. 7 and deals would likely be awarded by March 3. However, the Pentagon said this schedule could be adjusted if the Jan 7 deadline was not met.

- REUTERS


Herald Feature: Iraq