Wyden-Byrd Provision in Defense Spending Bill Requires Report on Iraqi Contracting Process
Most contracts for $100 billion rebuilding effort
have been let in secret or with limited bidding

July 17, 2003

Washington, DC – U.S. Senators Ron Wyden (D-Ore.) and Robert Byrd (D-W.Va.), Ranking Member of the Senate Appropriations Committee, won approval of a Defense appropriations amendment today requiring the Secretary of Defense to report to Congress on the Pentagon’s process for awarding government contracts for Iraqi reconstruction. Wyden and Byrd, along with Senators Susan Collins (R-Maine), Hillary Rodham Clinton (D-N.Y.) and others, have been leading an effort in the Senate for several months now to require public disclosure on a number of Iraqi reconstruction contracts that have been let without a full and open competitive bidding process. The General Accounting Office has cited sole-source and limited source contracts as a particular source of waste in government spending; most contracts for Iraqi reconstruction have been awarded in this manner.

“If the Administration wishes its policy on the reconstruction of Iraq to have credibility, then the process used to award tens of billions of dollars in contracts must be transparent,” said Wyden. “Congress and the American people cannot arrive at a fair judgment about the use of these taxpayer dollars without the type of information our amendment demands.”

“This amendment will pull back the curtain and cast some light on the Administration's reconstruction plans in Iraq, so that the American people will no longer be kept in the dark about how their money is being spent,” said Byrd. “If the taxpayers are expected to foot the bill for rebuilding Iraq, they deserve to know that their money is not being misused. Reconstruction contracts should be awarded for a reasonable price to the most qualified companies, not to those with the closest ties to the Bush Administration. With this amendment, Congress will ensure that the Defense Department is spending the people's money fairly and responsibly.”

The Wyden-Byrd amendment requires the Secretary of Defense to report in writing to Congress within 30 days about the Department’s process for letting Iraqi reconstruction projects, and must include the following information:

• the process and standards used for designing and awarding contracts;
• the criteria for justifying sole-source contracts;
• the method for determining the percentage of profit for cost-plus-fixed-fee contracts;
• the mechanisms to provide independent oversight over contractors;
• policies to prevent conflicts of interest;
• policies to prevent waste, fraud and abuse;
• and a list of all contracts for reconstruction and other services in Iraq and their overall expected costs and duration.

The Senate is expected to approve Defense appropriations legislation this week; the measure will then move to conference to resolve differences with the House version of the spending bill.

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