Several lawmakers said Wednesday the contracting process for rebuilding Iraq should be restructured because it is costing an excessive amount of money and is preventing Iraqis from helping to rebuild their own country.
During a House Government Reform Committee hearing, several lawmakers said they want the Coalition Provisional Authority now in charge of Iraq to provide more transparency in contracting and more open competitions for work before they vote to approve President Bush's $20.3 billion supplemental request for rebuilding the country.
"I'm concerned that taxpayer money is being wasted in Iraq," said Rep. Henry Waxman of California, the committee's ranking Democrat. "I'm motivated because I think the taxpayers are getting ripped off."
He cited the provisional authority's decisions to give Bechtel Corp. and Kellogg Brown & Root noncompetitive contracts worth over $3 billion for reconstruction and oil work in Iraq as proof that the contracting process is flawed. Both companies are U.S.-based multinationals and Kellogg Brown & Root is a subsidiary of Halliburton, a company that Vice President Dick Cheney managed from 1995 to 2000.
"It appears that big American contractors are receiving too much money for too little work and too few opportunities for Iraqis," Waxman said.
Waxman said Iraqis are already proving they can perform rebuilding jobs for less money than big multinationals. For example, during a recent congressional delegation's visit to Iraq, lawmakers met with Army Maj. Gen. David Petraeus, who oversees northern Iraq. Petraeus informed the delegation that Iraqis were able to get one cement factory operating again for $80,000, even though U.S. engineers estimated the job would cost $15 million.
Waxman said the Office of Management and Budget should ask the provisional authority to restructure its contracting processes. He said the provisional authority should first define individual tasks that need to be completed in Iraq and then have open competitions for each contract, as opposed to issuing large umbrella contracts to companies like Bechtel and Halliburton.
Rep. Carolyn Maloney, D-N.Y., said the Bush administration has not provided adequate answers to lawmakers about questions over contracting. She said Congress should demand more transparency and accountability about the details of contracting in Iraq before voting to approve the supplemental request.
A panel of officials involved in rebuilding Iraq testified at the hearing and generally agreed that more competitive contracts are needed in the country. Army Maj. Gen. Carl Strock, who just returned from Iraq as the authority's director of operations, said competitive contracting for oil work will begin this month.
Tom Korologos, senior counsel to the authority's administrator, Paul Bremer, defended the authority's use of no-bid contracts when the agency first began operating in Iraq. He said the authority did not have a contracting process in place when it began operations, but the agency needed to start rebuilding activities quickly and therefore issued contracts to companies such as Bechtel and Halliburton because they had experience doing such work.
However, Korologos said the authority is now ready to hold full and open competitions for work in Iraq.
But Del. Eleanor Holmes Norton, D-D.C., said getting Iraqis more involved in rebuilding their country is not as easy as just opening up the bidding process. She said she has read reports that Iraqis are confused about how the bidding process works, and have not been given enough time to submit their bids.
Rep. Danny Davis, D-Ill., added that he wants to see more opportunities for small businesses, minority-owned businesses and women-run businesses to participate in rebuilding Iraq.