Commerce, Treasury step up contracting efforts in Iraq

The Commerce and Treasury Departments are stepping up their efforts to help companies get contracts in Iraq, despite concerns about limits on which countries can bid for the contracts and criticism that laws issued under Saddam Hussein's regime to prevent government workers from unionizing remain on the books.

While the Pentagon has banned countries that didn't support the U.S. invasion of Iraq from bidding on prime reconstruction contracts, Commerce is actively soliciting Middle Eastern nations to take a slice of contracts valued at more than $18 billion.

"Our main job is to serve as a clearinghouse of information about commercial opportunities in Iraq," said Jay Brandes, director of Commerce's Iraq Task Force. "Things on the ground are moving very, very quickly, so timely information is absolutely vital."

At a briefing Wednesday on Iraq contracts in Washington, Brandes announced that Commerce has launched a new regional program in the Middle East to specifically entice companies and investors from Turkey, Saudi Arabia, the United Arab Emirates, Kuwait and Jordan to work with American and Iraqi companies to rebuild Iraq.

Under the program, Commerce's foreign commercial service offices in Arab countries will help companies and investors access projects in Iraq. Brandes said Commerce is considering extending the program to other countries, and he will promote it during a trip to the region in January.

Commerce has also established a Web site that provides updated information on commercial opportunities in Iraq; an "Iraq alert database" of more than 3,000 companies from 73 countries seeking work; and a toll-free "hotline" for business counseling (866-352-IRAQ).

Along with Commerce, the Treasury Department is trying to build a private financial sector in Iraq and helping companies with finance-related contracting, said Larry McDonald, director of Treasury's Iraq Task Force.

"The Treasury Department's overall objective in Iraq is to support the development of a financial sector that does what a financial sector really ought to do in a well-functioning economy," he said. "One of our first and most basic objectives is to try to help the Iraqis set up a Central Bank that will be a kind of anchor for sound monetary policy in their new economy."

However, the rapid pace at which contracts are being let in Iraq is stunning some industry and labor officials, especially because multi-year contracts will be issued before an elected national government is in place. For some projects, a request for proposals and contract award are expected to occur within one week, causing some to question how competitive the bidding process will be.

"There's a sense of someone having pushed the fast-forward button on this whole show," said James Clad, senior counselor for the Overseas Private Investment Corporation.

An attorney specializing in Iraq contracts said nobody knows whether a new government will honor contracts. The Coalition Provisional Authority in Iraq, which manages operations in the country, has stated that elections will occur in June.

"You can have all the contracts you want, but it's anybody's guess what will happen in six months," the attorney said.

Labor groups are also outraged the CPA is not allowing public-sector Iraqi workers to unionize.

"It turns out that of all the laws they decided to keep on the books from Saddam Hussein, the prominent ones are the labor laws," said Gene Bruskin, co-convener of U.S. Labor Against the War, a national network of labor unions. "Workers are being denied the right to organize under Saddam Hussein's 1987 laws, which say that public-sector workers have no right to organize."

Timothy Mills, a lawyer with Patton Boggs LLP who counsels the CPA, acknowledged the concerns.

"There are some contracts from time to time that have been put on a short time frame and you ask yourself the question: 'Would it be better in terms of having more competitive bids if in fact you had a longer time to respond?'" he said. "There's been some criticism in that regard, and I think in some regards that's a legitimate concern."

He said some contracts needed to be awarded quickly, such as those used to purchase radios for police forces and provide operational services for government ministries.

However, he claimed the CPA is not obligated to change or make labor laws under the Geneva Convention.

"The CPA policy on labor law is the labor law of Iraq as it existed prior to the CPA coming into existence," he said. "To my knowledge, under the regime there was no public employees union. But it's not up to the CPA to change Iraqi law. It's up to the Iraqis to decide what their laws should be in the labor realm."