Monday, April 28, 2003
Milwaukee Journal Sentinel: So far, the U.S. government has awarded several contracts for work in postwar Iraq, and two large ones have raised eyebrows in capitals and construction sheds around the world. The first was a contract from the U.S. Army Corps of Engineers to Kellogg Brown & amp; Root for fighting Iraqi oil fires; KBR is a subsidiary of Halliburton, which Vice President Dick Cheney used to run, which naturally sparked talk of favoritism. The second -- for general reconstruction work -- went to Bechtel Corp., which is politically wired and won in a limited-competition bidding process, which naturally sparked talk of favoritism.
GAO review coming
One consequence is that the General Accounting Office, Congress' investigative arm, has said it will conduct a broad review of contractual arrangements and procedures for postwar construction in Iraq. A GAO review is a fine idea, and it ought to result in as much transparency as possible in the bidding process. But the agency shouldn't dawdle.
The cost of rebuilding Iraq is estimated at $20 billion a year over the next three years, and many of the projects involved are huge. Bechtel's contract, for example, ranges far and wide -- from reconstructing airports, power plants and water-treatment facilities to building or rebuilding schools, hospitals, roads and more. The deal will be worth $35 million initially and could rise to $680 million within 18 months, and likely billions more beyond that.
The sheer size of the work suggests one reason why bidding was limited: There are only a handful of international construction companies capable of doing it. Most are based in the United States, although British, European and Japanese firms also compete on the global stage.
Foreign companies, however, were not invited to bid. That's a mistake and ought to be revisited by U.S. agencies as new contracts are awarded.
Bidding on such contracts is supposed to be open to all comers, according to World Trade Organization rules, and in any event, it makes good sense to internationalize the reconstruction effort.