Statements on Introduced Bills and Joint Resolutions S876

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. WYDEN (for himself, Ms. COLLINS, and Mrs. CLINTON):

S. 876. A bill to require public disclosure of noncompetitive contracting for the reconstruction of the infrastructure of Iraq, and for other purposes; to the Committee on Governmental Affairs.

Mr. WYDEN. Mr. President, Senators COLLINS, CLINTON, BYRD, LIEBERMAN and I want the rebuilding of Iraq to be done in the best way possible—for the Iraqi people and for the American taxpayers who will foot the bill. To ensure that happens, we're introducing bipartisan legislation today to ensure accountability in the awarding of U.S. contracts to rebuild Iraq.

Usually in situations like this, open and competitive bidding is used to get the best deal for the taxpayers. The same needs to hold true here. Contracts to rebuild Iraq should be awarded in the sunshine—not behind a smokescreen. 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.

The bill we're introducing today is called the Sunshine in Iraq Reconstruction Contracting Act. It's intended to shine light into the secretive practices the United States Agency for International Development, USAID, and other Federal agencies are using to hand out in Iraqi work.

There are dollars-and-cents reasons for doing this. The potential cost of rebuilding Iraq has been estimated at around $100 billion. That's a lot of taxpayer money. And the U.S. General Accounting Office, GAO, reports that sole-source and limited-source contracts aren't usually the best buy. Investigator found that Army officials often just took whatever level of services the contractor gave, without ever asking if it could be done more efficiently or at a lower cost.

Despite that, sole-source and limited-source contracts look like the rule, not the exception, for rebuilding Iraq. And these are costing some big cash. Contracts awarded for oil fire fighting and other projects are so-called "cost-plus" contracts. They pay a company's expenses, plus a guaranteed profit of one to eight percent. There are no limits on total costs, so the more a firm charges in expenses, the more profit it makes. If the Federal Government's going to spend my constituents' money that way, without asking for competitive bids, I think my constituents deserve to know why.

Let me give you two concrete examples of the kind of secrecy I'm talking about. A lot of the known details come from press reports. In February and March, USAID invited a handful of companies to bid on $1.7 billion in Iraqi projects—rebuilding highways, bridges, schools. Competition for one $600 million contract was limited to seven large U.S. engineering firms. USAID apparently put out some bid invitations before the war even started.

On March 24, the Army Corps of Engineers announced a sole-source, unlimited contract to two American companies to control Iraqi oil fires. The no-bid contract is still classified. Information that should be available to the public was finalized on March 8 but is still under wraps. What we know is that other firms that had experience putting out oil well fires in Kuwait in 1991 were left out of the process altogether. And we also know that as early as last fall, the parent company of these contractors got an exclusive contract to study how to supply oil services during an invasion of Iraq.

Anybody looking to find an explanation for this closed-door contracting is likely to come up short. So far the agencies haven't said much. Last month, USAID 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. The USAID Director told The New York Times that to work in Iraq you have to have a security clearance, and only these few American companies have that clearance.

I sit on the Intelligence Committee, and don't know of any good reason why a contractor bidding to rebuild a school, hospital, sewer system or any other part of Iraq's infrastructure would need a security clearance. In any case, four of USAID's eight reconstruction projects will allow subcontracting to companies that don't have to meet the security requirements. So that argument doesn't hold up.

Our bill has a simple premise to ensure accountability in the awarding process. It says that any Federal entity bypassing competitive bidding for Iraqi reconstruction projects has to disclose some key information. Most importantly, that means revealing the documents used to justify a sole-source or limited contract. Agencies are already required by law to prepare this rationale for sole source bidding. Our bill just makes the information accessible. We've written provisions to protect classified information, while still giving Congress full oversight over the billions in taxpayer money that Americans are being asked to commit in Iraq.

There are too many questions and the stakes are too high for Congress not to demand public disclosure of this information. I am pleased that Senators COLLINS, CLINTON, BYRD and LIEBERMAN are joining me in introducing this legislation to bring greater accountability and openness to the contracting for Iraq reconstruction.

I ask unanimous consent that a copy of our bill be printed in the RECORD.