Criticism grows of no-bid work for Iraq reconstruction

The U.S. Agency for International Development's decision to sidestep open bidding for eight contracts to help rebuild Iraq should be investigated by the the General Accounting Office and AID's inspector general, congressional Democrats say.

Using no-bid contracts for the costly rebuilding process allows the administration to reward friendly companies, prevents Congress from exercising its authority over spending, and may result in higher costs to taxpayers, the legislators charged in a series of letters and public statements which have brought more attention to the issue.

"An open and fully competitive bidding process would ensure that the prices charged are reasonable and that the contractors selected are the most qualified," Sen. Ron Wyden, D-Ore., said at a recent news conference.

Administration officials countered in interviews that no favors were granted and that bidding would have taken too much time.

House Government Reform ranking member Henry Waxman, D-Calif., and House Energy and Commerce ranking member John Dingell, D-Mich., asked GAO to investigate the no-bid contracts being awarded by the development agency. Separately, Senate Governmental Affairs Committee ranking member Joseph Lieberman, D-Conn., asked AID's inspector general to investigate.

Among the questions Lieberman raised: Did the agency follow the law in determining which companies to consider for the work in Iraq; what, if any, AID workers had contact with the companies; and what, if any, administration officials were involved in discussions about the contracts before they were awarded?

The version of the fiscal 2003 supplemental approved by the Senate includes $4.3 million for inspectors general to audit reconstruction programs. Sen. Christopher Dodd, D-Conn, added the money through an amendment.

AID has awarded four contracts so far and intends to announce four others as part of the reconstruction effort. The contracts include $62 million to Creative Associates International to open schools and train teachers; $7.9 million to The Research Triangle Institute to help local governments get back in business; $7 million to the International Resources Group for emergency relief efforts, and $4.8 million to Stevedoring Services of America to repair and reopen Iraqi ports.

Lieberman joined several other senators, including Wyden and Senate Governmental Affairs Chairwoman Susan Collins, R-Maine, in introducing legislation that would require AID to justify its use of no-bid contracts and provide details of the work within a month of the awarding of such deals.

Another cosponsor, Sen. Robert Byrd, D-W.Va., said at a hearing that the costs of rebuilding Iraq must be watched because the project represents the biggest undertaking of its kind since the Marshall Plan to help Germany and Japan recover after World War II. A spokeswoman said Collins has no plans for hearings on the contract issue.

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