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US opens some Iraq contracts to all countries
By (Agencies)
Updated: 2004-02-12 16:03

The United States announced that companies from all countries were eligible to bid on six billion dollars worth of Iraq contracts, apparently backing away from restrictions that had excluded critics of last year's invasion.

But a Pentagon official, speaking condition of anonymity, told AFP the announcement posted on a Coalition Provisional Authority website was "not accurate" and was being changed because some government agencies may not be able to award contracts to foreign companies.

The US Agency for International Development (USAID), for instance, is required to "buy American" while the Defense Department normally opens its contracts to international competition.

"The policy is all countries are eligible to bid according to the regulations of the agency doing the contracting, and each agency has different requirements for that," he said.

A notice posted by the CPA on a website devoted to Iraq procurement programs (www.rebuilding-Iraq.net) singled out "non construction" contracts as being open the companies from all countries.

Construction contracts worth an estimated five billion dollars continue to be limited to firms from the United States, Iraq, coalition partners and countries that contributed troops to the coalition, the notice said.

"However, all countries are eligible for subcontracting in the five billion dollars construction efforts," it said.

"All countries are also eligible to compete as prime and/or sub-contractors for the six billion dollar non construction contract efforts (one exception -- 327 million dollar New Iraqi Army Battalion Sets contract)," it said.

Pentagon spokesmen had no immediate comment on the change.

But the Pentagon official who spoke on condition of anonymity said they were merely reverting to past practice for contracts.

"It's not necessarily a change in policy because this is how we normally do contracting," the official said. "So there is no shift in policy here."

Nevertheless, it marks a retreat from the position taken December 5 when Deputy Defense Secretary Paul Wolfowitz declared that the United States was limiting bids on some 26 prime contracts to countries that supported the US-led war.

"It is necessary for the protection of the essential security interests of the United States to limit competition for the prime contracts of these procurements to companies from the United States, Iraq, coalition partners and force contributing nations," Wolfowitz wrote.

The memo listed 63 eligible countries, excluding countries such as Canada, France and Germany that opposed the war.

The move infuriated European partners at a time when the White House was trying to mend fences with its allies.

Back-pedalling, the White House told Canada its companies could participate in future bids. Pentagon officials said at the time it was considering opening the bidding for prime contractor in a second tranche of contracts to companies from all countries.

The contracts are funded from an 18.6 billion dollar supplemental appropriation by Congress.

So far, just under four billion dollars in prime contracts have been awarded, including two contracts to refurbish the Iraqi oil industry and another for reconstruction projects.

Another 17 requests for proposals worth about five billion dollars are outstanding, all for construction projects.

Another six billion dollars has been set aside for "non-construction" contracts and grants.

"The non-construction contracts are things like getting gear and equipment for police stations, getting gear and equipment for hospitals, getting educational supplies, providing things for public works. Things that are procuring items versus building items," the Pentagon official said.

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