Watch
Senator Wyden's Statement From the Senate Floor
Wyden Fights Waste in Iraqi Reconstruction
as White House Requests Additional $60 Billion in Funds
No-bid private contracts may
squander tax dollars as U.S. economy suffers
September 4, 2003
Washington, DC – As
the Bush Administration announced plans today to request at least
$60 billion in additional Federal funds to rebuild and occupy
Iraq, U.S. Senator Ron Wyden (D-Ore.) renewed his call for more
accountability in the spending of American tax dollars there.
Wyden urged his Congressional colleagues to finally pass a measure
requiring the Administration to explain why it chose to let billions
of dollars in private contracts for Iraqi reconstruction without
allowing open and competitive bidding to keep costs down. Wyden
wrote the measure earlier this year and won its inclusion in
the Defense Appropriations bill; the final version of that bill
is now being negotiated by House and Senate leaders.
“This latest request
from the President makes it clear that the cost of rebuilding
and occupying Iraq is only going to grow,” said Wyden. “At
a time when Oregon families are hurting and education and health
care are woefully underfunded, I want an accounting of how their
tax dollars are being spent – and why the Administration
is refusing to use the most cost-effective method of doling reconstruction
dollars out.”
On August 29, the Wall
Street Journal reported that Bechtel Corp., one of the major
limited-bid contract-holders for Iraqi reconstruction, will receive
an additional $350 million for their work, as they’ve already
committed the full amount of their original $680 million contract
to reconstruction projects. The Washington Post has reported
that Halliburton, already the recipient of $1.7 billion in Iraqi
reconstruction contracts and “the single biggest government
contractor in Iraq,” stands to make hundreds of millions
of dollars more under a no-bid contract recently awarded by the
Army Corps of Engineers.
Guerilla warfare, terrorist
attacks and severe heat conditions have contributed to some delays
in Iraqi reconstruction. But in July, an official at the U.S.
Agency for International Development admitted to the Baltimore
Sun that many Iraqi rebuilding projects could be completed at
lower costs than the current contracts incur. Additionally, the
General Accounting Office has reported that sole-source and limited-source
contracts often waste taxpayer dollars; investigators 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.
Many of the no-bid or limited-bid
contracts awarded for Iraqi reconstruction 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.
Wyden’s amendment would require any Federal agency awarding
no-bid or limited-bid Iraqi reconstruction contracts to publish,
in the Federal Register, documents justifying that decision – forcing
agency officials to explain how a contract let with no bids could
be more efficient or cost-effective.
“I believe that if Federal
agencies have to justify their spending decisions in Iraq, the
most egregious cases of waste will stop,” said Wyden. “The
U.S. has an obligation now to rebuild Iraq – but at a time
when American schools are closing early, and American roads and
bridges are crumbling from neglect, the American people deserve
to have their money spent as judiciously as possible.”
Once the Senate and House
agree on a final Defense Appropriations bill, the spending measure
will move to the President’s desk. Wyden’s provision,
if retained in the bill, would require disclosure to begin immediately
on no-bid and limited-bid contracts for Iraqi reconstruction.
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