Local Iraqi builders call bids difficult

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BAGHDAD -- Some Iraqi construction companies say they are being shut of out reconstruction contracts by discriminatory practices and unreasonable standards.

U.S. officials reject the charges and say much of the frustration is caused by a misunderstanding of the contractors' legal obligations.

The contracts are awarded by three organizations -- the U.S. Army, the U.S. Agency for International Development (USAID) and the Coalition Provisional Authority (CPA), headed by L. Paul Bremer.

USAID contracts are awarded through the Bechtel Corp. U.S. Army contracts are awarded primarily through Halliburton Corp. Although at least some CPA contracts also are awarded through Halliburton, it has signed some of its own agreements.

Most Iraqi companies can learn about new reconstruction contracts by checking a special Web site set up by the CPA or by attending weekly meetings at Baghdad's Convention Center where Kellog, Brown & Root (KBR), a division of Halliburton, seeks subcontractors for its work.

Several Iraqis interviewed say they are frustrated by the process.

"We look at the Web site, it has some good information about each contract, but not enough," said Hend Adnan, who represents an Iraqi engineering company. "They don't give information over the phone, so you have to come and attend these meetings to know more."

The meetings, however, do not allay the Iraqis' suspicions.

"In colloquial [Arabic] in Iraq, we say things are done behind doors. You don't 'feel' the contracts," said Haidar Abdel Kazem, a construction contractor. "You feel it is decided before [the contracts] are announced."

Other Iraqi contractors complained about being given less than a week to respond to bids and produce detailed documents.

"They give four, five days. How are you going to prepare for it, how are you going to answer it, how are you going to get the answer to them? The period is unreasonable," Mr. Abdel Kazem said.

When they do respond properly to the contracts, many say, they go home empty-handed.

"I am not happy with their system. My company has been coming here for four months and responded to at least 10 bids but has not won anything. You look at the list of the companies that win and see there are a few companies that are always on top of the list," Mr. Adnan said.

The question of fairness in contracting procedures is likely to gain more attention as the United States plans to award about $25 billion of reconstruction contracts next year.

U.S. officials say the American companies are encouraged to hire as many Iraqi subcontractors as possible. Bechtel and KBR have awarded 50 percent of their contracts to Iraqis and plan to increase the figure to 70 percent "soon," one U.S. official said.