Iraq occupation authority’s status remains unclear

Almost a year after the U.S.-led Coalition Provisional Authority took over the administration of Iraq, unanswered questions about the organization's legal status, its founding, and the role it plays spending U.S. funds could have broad implications for the effort to rebuild and govern Iraq.

In a 35-page report issued late last month, the Congressional Research Service concluded that "it is unclear whether the CPA is a federal agency." That means it's also unclear whether CPA is covered by federal rules and regulations, particularly those that affect how the organization may spend U.S. funds.

Exactly how the CPA was established is still a subject of debate, the report says, citing numerous administration documents, statements, passages from laws and reports by Congress' investigative arm, the General Accounting Office. Evidence suggests the CPA was set up by presidential order or under the auspices of a United Nations Security Council Resolution. But "the lack of an authoritative and unambiguous statement about how this organization was established, by whom, and under what authority leaves open many questions, particularly in the areas of oversight and accountability," the report concludes.

In the absence of a clear explanation of the organization's status, "lines of authority and accountability could become tangled, or even obscured," the report says. CPA employees who have been detailed there from more than 30 federal agencies "possibly could find it difficult to understand and delineate clearly -- on a daily basis -- the organization's different roles and associated funds, laws and rules."

The CPA is responsible for spending -- or directing the spending -- of billions of dollars for the reconstruction of Iraq. The organization is authorized to disburse funds from the $18.6 billion aid package Congress approved in October 2003. However, it appears that the CPA has actually implemented reconstruction contracts by tapping other agencies, mostly in the Defense Department, to administer the contracts on its behalf.

That process is overseen by the CPA's Program Management Office. According to a list of projects on the PMO's Web site, contracts have been awarded by several federal agencies--including the Army Corps of Engineers and the U.S. Agency for International Development--"through the direction" of the PMO.

The Congressional Research Service report also notes that contracts have been let for CPA by the Army's Communications-Electronics Command, which traditionally administers technology contracts, and the Naval Facilities Engineering Command.

It's unclear how the CPA or its PMO can direct these purchases when the CPA's status as a federal agency is uncertain. Though it apparently hasn't directly spent money from the $18.6 billion reconstruction fund, even though it is authorized to do so, the CPA has awarded contracts using the Development Fund for Iraq, which includes foreign donations and assets seized from the Saddam Hussein regime.

At least three companies who have lost contract competitions in Iraq have protested that the CPA has no authority to award contracts. The General Accounting Office, however, which has jurisdiction to overturn contract awards by federal agencies, has declined to rule on CPA's status.

In October 2003, GAO dismissed a protest over the CPA's award of mobile telecommunications licenses in Iraq. In that ruling, GAO noted Army lawyers had argued that GAO had no jurisdiction to rule on the protest "because the CPA is not a 'federal agency.' "

GAO left open the possibility that it could rule on the CPA's status if a protested contract were "conducted on the CPA's behalf by an entity that is a federal agency (such as the Department of the Army)." That could open many reconstruction contracts to protest, and expose the CPA to a greater level of oversight.

The CPA will be dissolved June 30 when sovereignty is granted to an interim Iraqi government. The Congressional Research Service report cites CPA officials, however, as saying that the PMO will still be responsible for managing Iraqi infrastructure reconstruction under contracts that already have been awarded.