[Congressional Record Volume 149, Number 78 (Friday, May 23, 2003)]
[Senate]
[Page S7126]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         SUNSHINE IN IRAQI RECONSTRUCTION CONTRACTING AMENDMENT

  Mr. WYDEN. Mr. President, with the adoption of my amendment as part 
of the Defense authorization bill, the Senate is shining much needed 
sunshine on the process of awarding contracts for the reconstruction of 
Iraq. This amendment will ensure that Congress and the public will not 
be kept in the dark about the billions of dollars of contracts for 
reconstruction of Iraq that have already been awarded or will be 
awarded under the auspices of the Department of Defense.
  This amendment is also critical for ensuring the taxpayers get the 
best value for their money. An article in yesterday's Wall Street 
Journal confirms that the Senate has done the right thing. The Journal 
reports that in ``selecting subcontractors to help with hundreds of 
millions of dollars in repairs and rebuilding, the work is gearing up 
under a cloud of politics and distrust.'' The article goes on to say, 
``Officially, the U.S. government is saying the subcontractor awarding 
process is going to be fair and open and that nobody will be 
discriminated against because of politics. But in unofficial 
conversations, U.S. officials display quite a different attitude.''
  This latest report raises troubling questions about how U.S. agencies 
and their contractors are playing favorites when it comes to awarding 
contracts and subcontracts for Iraq reconstruction.
  There are two primary reasons American taxpayers deserve additional 
details about what has been up until now a closed bid process. First, 
there is a lot of money on the line--a projected $100 billion in 
taxpayer funds for rebuilding. Second, the U.S. General Accounting 
Office, GAO, has reported that sole-source or limited-source contracts 
usually aren't the best buy. In my view, the need for explanation 
increases one hundred-fold if Federal agencies are going to employ a 
process that may expose taxpayers to additional cost.
  Yet sole-source and limited-source contracts seem to be the rule, not 
the exception, for rebuilding Iraq. On March 24, the Army Corps of 
Engineers announced a sole-source contract to control Iraqi oil fires. 
It was later reported that the amount of that contract was up to $7 
billion. The details of that contract have yet to be made public.
  The U.S. Agency for International Development, USAID, has also 
announced that it would limit competition to companies with 
demonstrated technical ability, proven accounting mechanisms, ability 
to field a qualified technical team on short notice, and authority to 
handle classified national security material. But when it came time to 
actually award these contracts, USAID ignored or circumvented the 
Agency's own publicly stated criteria for limiting the pool of 
applicants.
  Under the new structure for rebuilding Iraq, these contracts will be 
overseen by the Office of Reconstruction and Humanitarian Assistance in 
the Department of Defense. In addition, the Defense Department has 
awarded and will continue to award its own contracts for Iraq 
rebuilding.

  So more than ever, I believe that if the Federal Government chooses 
not to use free market competition to get the most reasonable price 
from the most qualified contractor, then, at a minimum, they should 
have to tell the American people why. Sunlight is the best 
disinfectant--and the recent news reports have shown the need for a 
clearing of the air.
  I do understand the argument that these contracts need to be awarded 
quickly. I do understand that in many cases the companies receiving 
them have a long history of international work with USAID and other 
Federal agencies. I simply believe that if the need for speed can 
adequately justify these closed-bid processes that may expose American 
taxpayers to additional expenditures, then that justification should be 
made public. That is why our legislation says that any Federal entity 
bypassing competitive bidding for Iraqi reconstruction projects has to 
reveal the justifying documents they have prepared.
  As it turns out, when it comes to their contracts USAID even seems to 
think that sunlight is a pretty good policy. One of the requirements 
for the $680 million contract with the main U.S. contractor for Iraq 
reconstruction Bechtel, requires that it justify to USAID any 
subcontract awarded without open bids. If USAID can ask that of its 
main contractor, surely the American people can make the same demand of 
Federal agencies awarding these contracts.
  According to news reports, in 1999, USAID's own inspector general 
reported that at that time USAID's evaluation program didn't provide 
sufficient assurance that they were picking the best contractors. 
Although a follow-up report indicated some improvement, I think that is 
an argument in and of itself to insist on disclosure of the facts.
  Here is my bottom line: There are too many questions and the stakes 
are too high for Congress not to demand public disclosure of this 
information. The American people are footing the bill for repairs in 
Iraq that they often can't get in their own cities and towns on U.S. 
soil. The least Federal agencies can do is be a little clearer about 
who is getting the money and why.
  I am pleased to be joined by a distinguished and bipartisan group of 
colleagues in this effort. I particularly thank the chair of the 
Government Affairs Committee, Senator Collins of Maine. As chair of the 
committee that oversees contracting legislation, she is an expert in 
procurement law, a real authority on the very issue addressed by this 
bill. Her qualities of leadership on the committee and incredible 
proficiency on this topic give me great confidence that this bill is 
the right move for our constituents, the right move for the Senate, and 
the right move for America. I thank her for her support and 
participation in this effort.
  I am also indebted to the other cosponsors of this legislation--
Senator Clinton, Senator Byrd, Senator Lieberman, Senator Lautenberg, 
and Senator Harkin. In particular, Senator Clinton has been a strong 
and steadfast voice on this issue. I appreciate her support and the 
support of all the cosponsors.

                          ____________________