Iraq contracts limited to allies

Coalition Provisional Authority Web page

Defense Department officials late last week announced that only companies from countries actively involved in this year's Iraqi conflict will be eligible for reconstruction contracts, including a planned communications project.

The move effectively eliminates companies in such traditional allies as France, Germany, Russia and Canada from being prime contractors on more than $18 billion in Iraqi reconstruction. Although much of the money will pay for construction contracts -- including oil, electricity, security, transportation and public works -- a communications contract is also in the mix.

In November, Congress passed President Bush's $87 billion supplemental spending request, which will be used for reconstruction in Iraq, as well as sustaining the war on terrorism in Afghanistan and other locations worldwide. Included in the request is about $2 billion for information technology.

Deidre Lee, deputy director of the Coalition Provisional Authority's Iraq program management office, said today at the National Press Club that her role now is to "determine the best way to employ those funds for the betterment of Iraq."

A request for proposals (RFPs) for projects that will tap into the $18 billion was supposed to be issued by the authority earlier this week, but it has been delayed by several days.

"We had such a good response" from potential contractors, Lee said. "Contractors asked very meaningful questions and we try to be very thoughtful about that input."

She said that rather than continue with the RFPs with unanswered questions, the authority and the program management office made the decision to provide vendors with the most complete information possible.

As a result, the authority now has an estimated final response date of Jan. 8, 2004, and contracts are scheduled to be awarded in early February 2004.

Lee said the companies eligible to compete as prime contractors can come only from the United States, Iraq, coalition allies and countries that have contributed troops for combat or stabilization efforts. Companies from other countries, including France, Germany, Russia and Canada, can still be subcontractors on any of the contracts.

In October, the authority announced that three telecommunications services will provide wireless phone coverage to various regions of Iraq, none of which involved American companies as prime contractors. One of those contracts, involving Kuwait-based Mtc Vodaphone, which will provide coverage in southern Iraq, is expected to be finalized in a few weeks, according to Danny Benjamin, president of Al-Fawares Co., a U.S./Iraqi development and civil construction company that is actively involved in reconstruction efforts.