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[casi] Heady Days for Contractors in Race for Iraq Deals

This story doesn't come from an antiwar or anticapitalist site!


Thu November 20, 2003 01:24 PM ET

By Sue Pleming
WASHINGTON (Reuters) - Prospective bidders are salivating over new
Iraqi business worth up to $18.7 billion, from sellers of trucks and
power generators to construction giants and oil refinery specialists.

A sold-out Pentagon conference for contractors at an Arlington,
Virginia, hotel on Wednesday had the heady feeling of a Gold Rush.

More than 1,300 people from hundreds of U.S. and foreign companies
stalked procurement officials in hallways and pitched their
competence to work in Iraq. A follow-on conference is being held in
London on Friday, targeting non-U.S. firms.

"There is just so much money that we can tap into. It's just
wonderful to have this opportunity," one prospective bidder gushed to
the Defense Department's director of procurement, Deidre Lee.

A new U.S. office established in Baghdad to supervise and oversee
contracts has set an aggressive timetable, awarding up to $18.7
billion in 25 contracts over the next 10 weeks to rebuild Iraq.

Some draft tenders could be released by Friday for work funded by
money already appropriated from Congress. Official bidding will begin
from Dec. 5, with contracts awarded by Feb. 3, 2004.

The handling of the first batch of contracts for Iraq came under
heavy criticism abroad and domestically, with charges of cronyism in
some of the larger deals, which were awarded without competition even
before the war began.

Retired Rear Adm. David Nash, who is in charge of the new Program
Management Office, has promised full and open competition this time.
But many prospective bidders question how far the U.S. government is
willing to go.

"There are people here who can do great things, but will the
government be prepared to take them on rather than the Halliburtons
and Bechtels who they know from previous jobs?" asked one contractor.

Halliburton, the oil services company once run by Vice President Dick
Cheney, has the prime contract to rebuild Iraq's oil fields, while
San Francisco-based Bechtel has the main infrastructure contract.

New prime contracts are expected to be awarded only to companies from
countries that helped in the war effort. That excludes firms from
Germany, France and other nations that strongly opposed the U.S.
occupation of Iraq.

Smaller companies hope to cash in on 2,000 projects soon to be
announced that will cover a range of areas, from building police
stations and prisons to providing furniture and trucks.

Deal-makers, consultants and lawyers are having a field day knitting
together partnerships, stomping the halls of the Defense Department
and other government offices to tout their clients.

"One of my clients is interested in any of the oil refinery deals
coming up and I have another who is a specialist in ordinance
demolition," said one consultant.

Contractors complain of unanswered phone calls and e-mails and say it
is difficult to break into a market that seems to favor tried and
tested companies.

"We are ready to take an order and despite many calls have not been
able to get any meetings with the decision-makers. I'm here to try
and find out who we can deal with," said Joe St. Pierre, a manager of
a gas turbine company.

Michael Mele, Iraq program manager for the Army Corps of Engineers,
had advice for prospective bidders. While price and efficiency are
important, he said, security is the key issue.

Procurement staff are working massive overtime, canceling holidays to
get the work done. "The strain on the government contracting
community is a major concern of mine," said Mele. "We have never seen
anything like this and won't again."

Mark Parkinson

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