Congressional Record: May 23, 2003 (Senate) Page S7126 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. ____________________