Companies Secretly Bid to Rebuild Iraq

Weeks before the first bombs dropped in Iraq, the Bush administration began rebuilding plans.

ABCNEWS has obtained a copy of a 99-page contract worth $600 million.

"We have never in our 40-year history spent this much money in one country in one year," said Andrew S. Natsios, administrator of the U.S. Agency for International Development, an independent federal agency that receives overall foreign policy guidance from the State Department.

The USAID contract is filled with details about plans to construct Iraqi schools, airports, roads, bridges, hospitals, power plants and more.

‘Limitations of Competition’

But other details are being shielded by the USAID, which chose to conduct the bidding in secret.

"It's the scope and breadth that, I think, has made people take a second look at this in terms of the secrecy and the limitations of competition," said Steven Schooner, a law professor at George Washington University.

Normally, USAID puts out contracts on the Internet, and any company can bid. But to move this through quickly, the agency said it went to firms with track records and security clearances. It asked seven — about half the number that normally would have sought the business — to bid.

Among the companies believed to be bidding are Bechtel, Fluor, Parsons, the Washington Group and Halliburton, Vice President Dick Cheney's old firm.

All are experienced. But in addition, all are generous political donors — principally to Republicans.


The secret bidding is legal, but controversial.

"If you don't have an open process, the odds are you may not get the best price, you may not get the best contractor, you may not have the best quality control, which may impact your mission success," Schooner said.

British troops are serving alongside U.S. troops in Iraq. But the closed process blocked British companies, as well as any foreign firm, from bidding.

"We have a very keen diplomatic interest in ensuring that others not only are involved, not only will be involved, but feel as though they are part of this post-conflict exercise," said Eric Schwartz of the Council on Foreign Relations, a Washington think tank.

Also left out were international development groups, which historically have been essential to nation rebuilding because they emphasize the involvement of local people.

"They must have ownership over this full development process," said Mary McClymont, chief executive officer of InterAction, an alliance of dozens of U.S.-based nongovernmental relief organizations. "Otherwise, it's a recipe for failure."

USAID denies politics are involved in any of this.

"No political pressure was put by anybody outside the agency on us," Natsios said. "No phone calls have been made to me by anybody."

The agency says within a year, Iraqis will have better lives because of the rebuilding. But the secret bidding process makes it impossible to know how much better, or possibly worse, things might have turned out.

ABCNEWS' Jackie Judd contributed to this story.