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Roll-out of controversial Iraq contracts delayed
Reuters, 12.10.03, 2:44 PM ET
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International Relations Iraq
Domestic Politics Products from Crude Oil
By Sue Pleming
WASHINGTON, Dec 10 (Reuters) - The Pentagon on Wednesday delayed the issue of $18.6 billion in U.S. tenders to rebuild Iraq amid criticism over the exclusion from bidding of firms from France, Germany, Russia and other war opponents.
The prime contracts were set to be advertised last Friday, but were delayed while "high-level" policy decisions took place. A further delay was announced on Wednesday after earlier promises of release on Monday and Tuesday.
"The scheduled release of the solicitations in support of the Iraq reconstruction contracts has been temporarily delayed," said a notice on the Pentagon-run Iraq Program Management Office Web site (
www.rebuilding-iraq.net).
Deidre Lee, director of defense procurement at the Pentagon, attributed the delay to questions being addressed by procurement experts and said she hoped the contracts would be advertised within the next few days.
"Our intent is to get the RFPs (request for proposals) out as soon as possible," Lee said.
The 26 contracts are funded by money appropriated from the U.S. Congress and cover electricity, communications, public buildings, transportation, public works, security and justice as well as the rebuilding of Iraq's army.
Lee said experts were examining many questions raised by prospective bidders, including insurance and security issues.
One of the most contentious issues was the decision by Deputy Defense Secretary Paul Wolfowitz to bar bidding from firms whose governments did not support the war effort, such as France, Germany, Russia and Canada. Berlin, Moscow and Ottawa strongly criticized the move on Wednesday.
MANY OPPORTUNITIES
Lee said there were many opportunities for sub-contractors in Iraq for countries not on the list of 63 eligible nations.
"Those are the prime opportunities but there are many, many many opportunities for sub contracts."
The Iraq Program Management Office has set an aggressive timetable for bidders, with the award date for work set for the first week in February, a deadline officials hoped to meet despite the delay in rolling out tenders.
In addition to the 26 contracts, two other contracts to rebuild Iraq's oil industry are set to be awarded within the next month after several months of delay.
These will replace a no-competition deal awarded in March to Halliburton (nyse: HAL - news - people) , the Texas-based oil services company once run by Vice President Dick Cheney, which has been accused of price gouging, a charge it denies.
A military source expected these two oil contracts, worth $2 billion, would be announced before Christmas.
All of the contracts are being closely watched by the General Accounting Office, the investigative arm of the U.S. Congress, which has sent teams to Iraq. The Pentagon is also auditing the work of Halliburton and others.
Copyright 2003, Reuters News Service
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