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.
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