What Are the Statutory, Regulatory, and Other ControllingAuthorities for How Federal Government Contracts Are Awarded? In general, theauthority for awarding federal government contracts can be found in the United States Code (U.S.C.)and the Federal Acquisition Regulation (FAR). The statute in the U.S. Code for the Competition inContracting Act of 1984 (1) explicitly states that the federal government "shall obtain full and open competition through use ofthe competitive procedures in accordance with the requirements of this title and the FederalAcquisition Regulation ." (2) The FAR, the Defense Federal Acquisition Regulation Supplement (DFARS), (3) and the United States Agencyfor International Development (USAID) Acquisition Regulation (AIDAR) outline seven differentcircumstances which permit DOD and USAID to use other than full and open competition in theawarding of federal government contracts. The Competition in Contracting Act cites the followingexceptions to the use of full and open competition. 1. There is only one responsible source available to fulfill the contract requirements. 2. The federal agency's need for these goods or services is of such an unusual and compellingurgency that the federal government would be seriously injured if this contract were notawarded. 3. The federal government needs to ensure that suppliers are maintained in the event of a nationalemergency, or to achieve industrial mobilization, or to establish or achieve or maintain anengineering, development, or research capability. 4. The federal government has an international agreement to make this acquisition through meansother than through full and open competition. 5. A statute specifically authorizes or requires that the contract be made through a specific source. 6. The use of full and open competition may compromise national security. 7. The public interest would be better served by use of other than full and open competition. (4) The procedures for submitting written justifications to use other than full and opencompetition, including review requirements and delegation of authority, are outlined in DFARS,Subparts 206.303-1 and 206.304, and AIDAR 706.3. The Bush Administration has set additional criteria for eligibility for contracting in Iraq. Amemorandum issued by Deputy Secretary of Defense Paul Wolfowitz on December 5, 2003, statesthat he has determined that it is in the public interest to limit competitive bidding for theprocurement of certain Iraqi Relief and Reconstruction prime contracts awarded by the CoalitionProvisional Authority (CPA) and DOD, on behalf of the CPA. (5) (See the next question for therationale.) The statement can be viewed at http://www.rebuilding-iraq.net . What Countries' Businesses Are Eligible to Compete for ContractsFunded with U.S. Appropriated Reconstruction Funds? Contracts issued utilizingFY2003 appropriations were provided under sole source or limited competition procedures thatultimately benefitted U.S. firms. The national security interest was a key justification for excludingcompetition, domestic as well as foreign. However, as most contracts were then provided by USAIDand treated as foreign assistance, they became subject to "buy America" provisions of law under theForeign Assistance Act of 1961, and exempt from international procurement agreements. (6) Foreign countries could,however, participate as sub-contractors to the selected American firms, and are estimated to composehalf or more of the total cost of these contracts. Most FY2004 appropriations -- managed by the CPA -- are being treated somewhatdifferently. Under a previously mentioned December 5, 2003 "Determination and Findings" reportissued by Deputy Secretary of Defense Paul Wolfowitz, prime contracts are subject to full and opencompetition only among U.S. firms and those of 62 other eligible countries, including Iraq, coalitionpartners, and force contributing nations. The rationale for barring other countries' firms is that it is"necessary for the protection of the essential security interests of the United States." Countriesineligible to compete for prime contracts may still participate as sub-contractors. Some excluded countries, such as Germany and France, have protested the decision on thegrounds that it may violate the WTO's Government Procurement Agreement (GPA). Some U.S.officials suggest that the contracting organization, CPA, is not covered by the GPA and need notallow open competition. Others point out that GPA rules and existing practice exempt much foreignassistance from their requirements. The strength of these arguments has been questioned. OnJanuary 13, 2004, President Bush announced that Canada -- previously excluded as an opponent ofthe war, but a significant financial contributor -- could compete for contracts that have not yet beenopen for bids. (7) Will Israeli Businesses Be Eligible to Participate in IraqiContracts? Reflecting political sensitivities in the Middle East, Israeli businesses are not eligible for primecontracts resulting from FY2004 appropriations. Although it has consistently backed U.S. policyin Iraq, Israel did not express official support at the request of the Bush Administration. Israelifirms, however, are eligible to participate in Iraq reconstruction programs as sub-contractors. Reportedly, some are currently acting as sub-contractors in communications, water, security, andagriculture programs. (8) What Federal Agencies or Governing Bodies Are Involved inContracting for the Reconstruction of Iraq? Primary authority for the awarding andadministration of Iraq reconstruction contracts has been transferred to the U.S.-led CoalitionProvisional Authority (CPA) http://www.cpa-iraq.org/ . The CPA Program Management Office(PMO) http://www.rebuilding-iraq.net/ is responsible for selecting projects and overseeing 25 Iraqreconstruction prime contracts worth up to $18.6 billion that were originally to be awarded byFebruary 2004. However, slipped deadlines and the accelerated sovereignty schedule have led toa re-evaluation of the PMO's needs and capabilities. By the end of March 2004, only about $2.2billion of the original $18.6 billion had been obligated. As of May, contracts potentially worth nearly$8 billion of the $18.6 billion in FY2004 supplemental funding had been awarded. Among recentreasons for the slow progress are the requirement for open and competitive bidding for most of thenew reconstruction contracts and inter-agency disputes over control of the funds. Security concerns,escalating since March, have also delayed reconstruction further. Previously, major contract awards and management for postwar Iraq reconstruction projectswere administered by USAID http://www.usaid.gov/iraq/activities.html . Other federal agencieshave taken steps in the awarding and/or disseminating of information on contracts and thecontracting process, including the U.S. Army Corps of Engineers http://www.hq.usace.army.mil/cepa/iraq/contracts.htm and the U.S. Department of State http://usinfo.state.gov/mena/middle_east_north_africa/iraq/iraq.html . It is anticipated that USAIDand the other federal agencies involved with Iraq's reconstruction will continue their roles in thecontracting process as a complement to CPA's efforts. For additional information on federal agencysolicitations, application procedures, and contact information, see CRS Report RS21546, IraqReconstruction Resources: Fact Sheet. Under the Broader Question of Different Authorities, What Is theUSAID Contracting Role in Iraq? USAID has been responsible for contracting themajority of FY2003 reconstruction appropriations in Iraq and the widest range of economic, social,and political development programs. To date, USAID has awarded contracts in seaport and airportadministration, capital construction, theater logistical support, public health, primary and secondaryeducation, personnel support, local governance, agricultural development, and higher education. Although USAID was responsible for the FY2003-funded $1 billion construction contractawarded to Bechtel and an FY2004-funded $1.8 billion follow-on project, the CPA has control overmost of the funding available for reconstruction-related activities, particularly in the infrastructureand security sectors. USAID appears likely to continue to carry out many of the non-constructiondevelopment programs supported by FY2004 appropriations in areas such as education anddemocratization. As of May 18, 2004, USAID had obligated more than $3.5 billion in Iraq aidcontracts and grants. (9) Who are the Major Contractors Involved in the Iraq ReconstructionEffort? The Center for Public Integrity has completed an investigation of contractawards in Iraq and Afghanistan made by DOD, Department of State, and USAID; in the course oftheir inquiry, Center for Public Integrity officials filed Freedom of Information Act requests andagency appeals, studied Security and Exchange Commission filings and other news sources, studiedcontract award histories compiled by a database through the United States General ServicesAdministration of unclassified contracts worth more than $25,000, and made contact withgovernment and non-government officials who awarded and received contracts. The followinginformation was excerpted from the Center for Public Integrity's website. Table 1. The Top 20 Contractors, Ranked by Total ContractValue, for Activities in Iraq and Afghanistan (from 2002 through May 20,2004) Source: The Center for Public Integrity's website, at http://www.publicintegrity.org/ , viewed on June 8, 2004. According to the Center's website, a total of 13 new companies have received contractawards (since the website's last update on March 31, 2004), and nine companies previously awardedcontracts have seen contract increases totaling $5.8 billion. The CPA Program Management Office announced on May 12, 2004, that no protests havebeen filed against the $5.1 billion in construction contracts awarded in March 2004. (10) What is LOGCAP, and What Contracts Have Been Awarded underLOGCAP? The United States Army's Logistics Civil Augmentation Program(LOGCAP) (11) is aninitiative to manage the use of civilian contractors who perform services in support of DOD missionsduring times of war and other military mobilizations. It was established on December 6, 1985, withthe publication of Army Regulation 700-137. LOGCAP is administered through the Army MaterielCommand (AMC), Operations Support Command, and is a centrally managed program to coordinateefforts to negotiate pre-existing (such as contingency) contracts with vendors from the United States. LOGCAP has been used in a variety of military contingency operations, and provides for theawarding of contingency, or bridging contracts, or for the inclusion of contingency clauses inpeacetime contracts. LOGCAP contracts have been previously awarded for work in Rwanda, Haiti,Saudi Arabia, Kosovo, Ecuador, Qatar, Italy, southeastern Europe, Bosnia, South Korea, and Kuwait. LOGCAP contracts are "costs-plus award fee" contracts, meaning that there is a fee paidbased on contract costs, in addition to the potential for incentive fees based on performance. Tasksadministered under LOGCAP contracts are executed through "task orders." Task orders outline thespecific actions that the contractor needs to perform. The scope and breadth of the tasks to beperformed by the contractor are determined by the base commander. LOGCAP contracts allow taskorders to be approved as needed, without having to compete. Tasks orders have the effect of actingas small contracts, are awarded without benefit of competition, and can be quite large. Reportedly,three of the LOGCAP task orders given to Halliburton/KBR under the LOGCAP III contract wereeach worth at least $60 million. (12) In an audit of several task orders issued under theHalliburton/KBR LOGCAP III contract, the Defense Contract Audit Agency found a number ofdeficiencies, such as pointing out that four task orders, totaling $227 million, did not show evidenceof current, accurate and complete cost or pricing data. The report concluded that ... "Collectively,the deficiencies described above bring into question BRS' (13) ability to consistentlyproduce well-supported proposals that are acceptable as a basis for negotiation of fair and reasonableprices. We recommend you contact us to ascertain the status of the BRS' estimating system prior toentering into future negotiations." (14) The first LOGCAP contract (LOGCAP I) was awarded by the Army Corps of Engineers toKellogg, Brown, and Root (KBR) in1992. The contract was used to support the United Statesmilitary services and the United Nations military forces in Somalia. The second LOGCAP contract(LOGCAP II) was awarded to DynCorp in 1994. The third LOGCAP contract was awarded to KBR(now a subsidiary of Halliburton) in 2001. According to the LOGCAP Program Manager, (15) each of the three LOGCAPcontracts was awarded competitively. The third LOGCAP contract (LOGCAP III), a ten-year contract (one base year, followed bynine option years), was awarded in 2001 to Halliburton/KBR to perform a variety of tasks. Initialpress reports indicated that this LOGCAP III contract would be for the development of a contingencyplan for extinguishing oil well fires in Iraq; however, subsequent press reports include such tasks asproviding housing for troops, preparing food, supplying water, and collecting trash. This contractwas awarded under a cost-plus-award-fee, indefinite delivery/indefinite quantity contract. (16) The 2001 contract isbased on specific task orders which are issued individually, and only for those services that DODfeels are necessary to support the mission in the near term. During 2003, the Halliburton/KBRLOGCAP III contract rose to more than $3.5 billion. According to one press account,Halliburton/KBR earns a fixed 1% profit above costs on LOGCAP III, with the possibility of anadditional 2% as an incentive bonus, (17) while another press account reports that the Halliburton/KBRLOGCAP III contract is a cost-plus, award fee contract that earns a 2% fixed fee with the potentialfor an extra 5% incentive fee. (18) In accordance with the Freedom of Information Act, the Center for Public Integrity hasobtained portions of the LOGCAP III Iraqi oil repair contract, and such portions can be viewed onthe Center's website, http://www.publicintegrity.org/ . Was Halliburton Awarded a Sole-source Contract (A ContractAwarded Without Full and Open Competition)? On March 24, 2003, the Armypublically announced that Halliburton's subsidiary Kellogg, Brown and Root (KBR) had signed acontract with the Army Corp of Engineers to extinguish oil well fires in Iraq as well as provide anassessment of the necessary repairs to the Iraqi oil infrastructure. (19) This contract was asole-source contract to repair and operate oil wells in Iraq. According to the Army Corps ofEngineers, KBR was selected for this contract because KBR was judged to be the only contractorthat could begin implementing the contingency plan on such extremely short notice. DOD hasasserted that KBR had equipment and personnel in the region, and requiring competition for thework would have delayed the response to the oil well fires in Iraq. (20) This contract wasexpected to be used for an interim period, until the Army Corps of Engineers had an opportunity toaward additional contracts to provide a broader range of services to execute more of the contingencyplan. It appears that DOD justified the awarding of this contract based on an "unusual andcompelling urgency" (see DFARS 206.302-2). As a Result of Questions Raised over the Awarding of theHalliburton Sole-Source Contract, What Action Did the Army Corps of Engineers (Corps)Take? The Army Corps of Engineers made the decision to conduct a competitionto award two new contracts to replace the sole-source Halliburton contract. The Corps conducteda competition for two new costs-plus-award fee, indefinite delivery/indefinite quantity contracts fora full range of services to assist the continued recovery operations in Iraq. The Request for Proposal(RFP) was issued on July 9, 2003, and closed on August 14, 2003. The Corps held a conference withall interested parties on July 14, 2003. The solicitation (Solicitation DACA63-03-R-0021, for theRepair and Continuity Operations of Iraq Oil Infrastructure) called for a total of two (2) contractsto be awarded, and that work under each of these two contracts could range from a minimum amountof $500,000 to not more than $500,000,000, during the life of the contracts. On Friday, January 16,2004, the Corps awarded Halliburton subsidiary KBR the first of the two contracts, a competitivebid to rebuild the oil industry in Southern Iraq. Soon after, USAID announced that Bechtel had beenawarded the second of the two contracts, a contract to repair bridges and roads, electrical powergenerators and grids, water and sewage systems, and airport facilities; the contract also calls forBechtel to rebuild up to100 hospitals and 6,000 schools and may be worth up to $1.8 billion dollarsover two years. The contract award information can be accessed from the Federal BusinessOpportunities website at http://www.fedbizopps.gov/ . (21) What Has Replaced the Oil-for-Food Program (OFFP) Structure? Who Is Providing Oversight Authority? Security Council Resolution 1483, adoptedon May 22, 2003, extended the OFFP for six months beyond its original expiration date of June 3,2003, during which time the program was phased out. For information about the OFFP operationsunder the United Nations (U.N.), see http://www.un.org/Depts/oip/background/latest and CRS Report RL30472 , Iraq: Oil-For-Food Program, Sanctions, and Illicit Trade , by [author name scrubbed].The resolution ended sanctions against Iraq and permitted the CPA to use oil reserves for morelong-term reconstruction purposes. It also shifted responsibility for oil profits from the U.N. to theUnited States by establishing the Development Fund for Iraq, which is held by the Central Bank ofIraq. (22) The OFFP was phased out on November 21, 2003 when the U.N. officially transferredoperational responsibilities to the CPA. For information about the transfer and related links, see http://www.state.gov/r/pa/prs/ps/2003/26540pf.htm . Of the overall $46 billion allocated to theOFFP during the life of the program, $39 billion was in humanitarian assistance. The $8.2 billionof remaining assets and funds in the pipeline when the OFFP terminated were to be transferred tothe Development Fund for Iraq. The CPA took over responsibility for the management of themulti-billion dollars' worth of supplies and equipment already designated for Iraq through the OFFPdelivery system and for the authentication and payment of suppliers. As of March 31, $7.6 billionof these assets and funds had been transferred. The CPA established a coordination center in Baghdad that took over issues previouslyhandled by the OFFP. The website http://www.cpa-iraq.org/oil_for_food offers a section onfrequently asked questions that is useful for contact information and details on contract funding,amendments, and prioritization. Terminating the OFFP also put a limit on contract applications forthe export of goods to Iraq. With consideration of Iraqi views and needs, a priority system wasdeveloped. Categories of eligible and ineligible contracts are provided on the CPA website withdetails about specific suppliers listed in tables arranged by country. Press reports in February and March 2004, apparently based on material released by the IraqiGoverning Council and in other news briefs attributed to documents found in Iraq by the CPA, referto allegations of abuse of the OFFP by the Hussein government (and when the OFFP was under U.N.authority) including a list of individuals, companies, and organizations that may have receivedkickbacks. (23) Sincenearly the beginning of the OFFP there have been allegations of program abuses, and audits havebeen conducted at different points over the life of the program. Apparently, U.S. officials wereparticularly concerned about whether Iraq was using the additional revenue to buy prohibited militaryand WMD technology. (24) In March 2004, Secretary-General Koffi Annan suggested to the Security Council that anindependent investigation into the allegations of corruption and fraud within the OFFP beundertaken. (25) Thisaction was later endorsed by the Security Council. On April 21, Mr. Annan announced that themembers of an independent panel, to be chaired by Paul Volcker, is expected to conduct acomprehensive investigation. (26) The Iraqis may be organizing an investigation of the allegationsas well. The latest potential scandal refers to dealings that may have happened during PresidentSaddam Hussein's rule and is separate from the current contract management under the CPA. Itappears that the number of Iraqis (roughly 60%) dependent on food assistance provided by the publicdistribution system has not changed since the termination of the OFFP. It is expected that the newIraqi interim government will take responsibility for continuing the process of closing out theprogram and for managing food distribution, but specific details are not yet available. (27) What Can Explain the Cost Differential in Halliburton/KBR OilFuel Purchases from Kuwait and Turkey? Halliburton/KBR, on behalf of the CPA,has purchased oil fuels for consumption by the Iraqi population. Gasoline has been purchased fromKuwait and Turkey, and delivered into Iraq by truck. While roughly 75% of the gasoline has comefrom Turkey, both the commodity cost of the fuel and the cost of transport from Kuwait are eachmore than twice as high as the corresponding charges associated with Turkish supplies. What canexplain the cost differential in each element of this transaction? In most cases, fuels for Iraq werepurchased in two geographically separate markets. Supplies came from both Turkish suppliers andinternational spot markets in the Mediterranean oil trading area. Offshore purchases were importedinto the Mediterranean ports of Iskenderum and Mersin, and shipped overland by Turkish truckersto Iraq. In other cases, fuels were purchased from a Kuwaiti supplier not directly in the oil business,who also made transport arrangements. Between May and October 2003, Halliburton imported about 179 million gallons fromTurkey and 61 million gallons from Kuwait. Turkish supplies averaged $1.24 per gallon delivered;those from Kuwait averaged $2.64, including $1.21 for the fuel and the remainder transport and KBRfees. (28) This is the mostrecent price data available, despite purchases continuing through the end of March 2004. Information on the quantities of gasoline obtained for Iraq were provided to the HouseGovernment Reform Committee by the Corps of Engineers for the whole period of Halliburton fuelprocurement management. The cheaper Turkish purchases -- which comprised about 75% of a totalof 464 billion gallons acquired (29) -- may well have comprised all the available supply in thattrading area; hence, perhaps the need for the higher priced supplies from nearby Kuwait. However, certain factors might have contributed to higher Kuwaiti prices: Dealing with Dangerous Transportation. Over 60 vehicles have beendestroyed or damaged, at least 3 people killed, and several more injured. Using Short-term Supply Contracts. The 30-day supply contract specified inthe supply arrangement with Kuwait may have been too short to line-up additional trucks, which areapparently in short supply. The Nature of the Existing Kuwaiti Supply Contract. According to PlattsOilgram News , the Kuwait Petroleum Corp. refused to grant KBR permission to deal with any othersupplier than the Altanmia Commercial Marketing Company to procure and deliver petroleumproducts from Kuwait to Iraq. Altanmia's main shareholder is Najeeb al-Humaizi, part of aprominent Kuwait family closely linked to the Kuwaiti government. Altanmia refuses to provide costinformation, contending it is prohibited from doing so by Kuwaiti law. Reacting to the fuel price controversy, the Pentagon decided, on December 30, 2003, to givethe Iraqi fuel procurement job to the Defense Energy Support Center (DESC). DESC solicited bidsfor 6.6 million barrels of fuel on January 21, 2004; a contract is expected to be in place by April 1,2004. KBR is also eligible to bid on new contracts. Meanwhile, KBR supplied fuel while being under investigation for wrongdoing under thesupply contract. The investigation continues, although no new developments have been announced. The Pentagon Inspector General made a preliminary finding that KBR had overcharged $61 million.On January 23, 2004, the Wall Street Journal reported that two Halliburton employees had admittedtaking $6 million in kickbacks. (30) The company confirmed this. The Wall Street Journal went onto note specifically, that the kickbacks did not involve the gasoline purchases under scrutiny,although the employees involved worked in the same office in Kuwait that handled the gasolinecontract. The Defense Contract Audit Agency (DCAA) has requested that the Inspector Generalfindings be forwarded to Pentagon criminal investigators. Have Halliburton/KBR Fuel Purchases Had an Undue Impact onthe Spot Market Price of Gasoline in the Persian Gulf Area? Between October andDecember 2003, the spot market price of gasoline in the Persian Gulf area, as quoted in PlattsOilgram Price Report , increased from 71 cents per gallon to over $1.00 per gallon. (31) Has this thinly traded spotmarket been unduly affected by Halliburton/KBR fuel purchases? Spot market gasoline prices inthe Persian Gulf trading area have risen from about $30 per barrel at the beginning of October, 2003to about $44 per barrel in mid-January 2004. That $14 increase -- the equivalent of 33 cents pergallon -- represents a substantial hike, well exceeding that which might be attributable to crude oilincreases. Higher gasoline prices beyond increases in crude oil costs were likely caused by increaseddemand in the limited regional market where fuel is purchased for Iraq. After several months ofunusual demand pressure from continuous short-term purchases, markets have responded in a waysuggesting that local conditions could not support the Iraqi demand without escalating the cost ofthe Kuwait-Iraq procurement. As DESC prepares to take over this program, one clear considerationis to source future petroleum product purchases in more robust markets better able to accommodatethe greater demand without such price increase. In a December 30, 2003, press release, DESC announced it would support the TaskForce-Restore Iraqi Oil (TF-RIO) through the Defense Logistics Agency. Requests for Proposals(RFPs) were initiated, and supply contracts were signed. On April 1, 2004, the DESC assumed soleresponsibility for civilian fuel supplied to Iraq and procured from both Turkey and Kuwait. Halliburton/KBR loaded its last truck shipment in Kuwait on March 31, 2004, ending itsinvolvement in fuel supply (32) . Which Product Areas and Sectors Are the Focus of Future U.S.Contracts? The Coalition Provisional Authority's Program Management Office hasannounced that, based on the awarding of over $5 billion during March 2004 alone, the United Stateshas used up to approximately $8 billion of its 2004 supplemental appropriation for Iraqireconstruction activities. Separate solicitations from the Pentagon Renovation Program for programmanagement support are also anticipated. Table 2 and Table 3 provide information on CPA'sawarded reconstruction contracts. The information from both tables was extracted from the April2, 2004, press release issued by CPA-PMO and can be viewed at http://www.rebuilding-iraq.net . Table 2. FY2004 Contracts Awarded for Iraq InfrastructureReconstruction, by Sector Table 3. Other FY2004 Contracts Awarded for Iraq Infrastructure Reconstruction Source: Extracted from data provided under the "News and Business" section on the Iraq ProgramOffice website, at http://www.rebuilding-iraq.net . How Can U.S. Businesses Get Federal Government Contracts for Work in Iraq? Businesses and producers may bid for contracts to supply specificgoods or services to the federal government. The General Services Administration (GSA) definesa "contract" as a mutually binding legal relationship with the seller furnishing the supplies or servicesand the buyer paying for them. A longer definition of a contract is found in the Federal AcquisitionRegulation (FAR 2.101), with the full text of the regulations available at http://www.arnet.gov/far . A federal contract may be so large that a small business would have difficulty in providingthe products or services required to meet the terms of the contract. In some cases, a prime contractor(the company that received the contract) may need to use subcontractors (other companies) to fulfillthe contractual obligations of the required products or services of the original contract with thegovernment. The primary contractor may hire subcontractors and pay these companies for theirproducts or services in fulfillment of the contract. Iraq reconstruction prime contractors areresponsible for choosing their own subcontractors. Companies are encouraged to access thecontractors' websites for information on needs and bid requirements for subcontracting opportunities. The Federal Business Opportunities (FedBizOpps) website is the single government locationfor posting federal procurement opportunities over $25,000, at http://www.fedbizopps.gov . Commercial vendors can search, monitor, and retrieve information on solicitations posted by theentire federal contracting community. Searches for contract information can be done under the buttonfor "Find Business Opportunities." For example, a keyword search could be done for "Iraq." Thesearcher can select information on a contract award or a synopsis (a summary of a solicitation). Amore precise search for contract information could be done by searching for a particular agencyname, or for a product or service. Aside from business opportunities with the federal government, there are other kinds ofbusiness opportunities concerning Iraq, including the following: (1) CPA and Iraqi Ministrysolicitations; (2) working directly with Iraqi state-owned enterprises; (3) international institutions,such as the World Bank, the United Nations, and nongovernmental organizations; and (4) privateenterprise. For an overview of the contracts concerning Iraq, the Iraq Reconstruction Task Force websiteprovides a listing of contract awards at the website, http://www.export.gov/iraq/market_ops/contracts.html . The tables list "Awarded Contracts andGrants," for Fiscal Years 2003 and 2004, with the names of the prime contractors and knownsubcontractors. A brief summary describes the scope of the contract and the country of the primecontractor that received the contract award. Are There Additional Resources for Business Opportunities inIraq? The Iraq Investment and Reconstruction Task Force website also providesthe following resources: "Business Guide for Iraq." This frequently-updated document discusses thefollowing areas: (1) commercial environment in Iraq; (2) existing laws and regulations; (3)international trade issues; and (4) key industry sectors, including issues affecting agriculture, oil,transportation, telecommunications, health, and energy sectors. Information relating to these topicsmay be found at http://www.export.gov/iraq/bus_climate/businessguide_current.html . "Doing Business in Iraq FAQs." This document answers questions regardingthe following areas: (1) travel and security concerns; (2) health issues; (3) international trade andinvestment issues; (4) job opportunities; and (5) business counseling by federal agencies. Informationrelating to these topics may be found at http://export.gov/iraq/pdf/iraq_faq_current.pdf . "IraqAlert." A company can register to get email alerts on commercialdevelopments and potential opportunities in Iraq, according to industry sectors or activities ofinterest. Information relating to these topics may be found at http://ita-web.ita.doc.gov/iraqreg . For information on more business opportunities, the Iraq Investment and Reconstruction TaskForce website has links to other Iraq resources, including the CPA-PMO, at http://www.rebuilding-iraq.net . This site encourages vendors to register to receive moreinformation, by email, on requests for proposals for Iraq reconstruction projects. The Iraq Reconstruction Task Force at the Department of Commerce can be contacted bytelephone at the Iraq Business Outreach Hotline, Tel: 1-866-352-4727, Fax: 1-202-482-0980, oremail at IraqInfo@mail.doc.gov, or at the website, http://www.export.gov/iraq/ . For additional resources on exporting to Iraq, the website of the Export-Import Bank of theUnited States (Ex-Im Bank) provides links to sources of information on federal agencies, Iraqiorganizations, and international organizations involved in Iraqi activities, at http://exim.gov/iraq.links.htm . At this site, it is possible to register to receive future notificationsof export opportunities to Iraq. What Are the Potential Congressional Oversight Actions toAddress the Iraqi Contracting Situation? Both S. 2400 , the proposedDepartment of Defense FY2005 Authorization Bill for Military Construction and the Departmentof Energy, and S. 2401 , the proposed Department of Defense FY2005 AuthorizationBill, would require the Secretary of Defense to (1) submit to Congress a report detailing amanagement and oversight plan covering contractor personnel who are managed by federalgovernment personnel; and (2) submit to the House and Senate defense committees a report thatoutlines the rationale for and nature of the security, intelligence, law enforcement, and criminaljustice activities performed by contractors in Iraq. P.L. 108-136 ( H.R. 1588 , the FY2004 National Defense Authorization Act)requires DOD to fully comply with the Competition in Contracting Act (33) and other applicableprocurement laws and regulations for any contract awarded for reconstruction activities in Iraq, andto conduct full and open competitions for such contracts (Section 805), and to require publicdisclosure of any contracts for the repair, maintenance, or construction of Iraq infrastructure that areawarded non-competitively or without full and open competition (Section 1442). The House andSenate Armed Services Committees, the Senate Foreign Relations Committee, the HouseInternational Relations Committee, the House Government Reform Committee, and the SenateGovernment Affairs Committee may play an oversight role on Iraqi issues, including contractingconcerns. On January 20, 2004, Representative James Leach introduced H.Res. 494 . Thisresolution is a proposal to create a select committee to investigate the awarding and carrying out ofcontracts to conduct activities in Afghanistan and Iraq and to fight the war on terrorism. Themeasure was referred to the House Rules Committee. P.L. 108-106 ( H.R. 3289 , the FY2004 Emergency Supplemental Appropriationsfor Defense and for the reconstruction of Iraq and Afghanistan) created the position of InspectorGeneral, Coalition Provisional Authority (CPA-IG). Stuart W. Bowen, Jr. was appointed as CPA-IGon January 20, 2004, and reports directly to the CPA Administrator. Under P.L. 108-106 and theInspector General Act of 1978 ( P.L. 95-452 ), the CPA-IG has statutory duties to promote economy,efficiency, and effectiveness in managing CPA/Iraq reconstruction activities. In addition, Section 2001 of P.L. 108-106 requires the CPA-IG to submit to Congressquarterly reports on the activities of the Inspector General and the CPA. The first report wassubmitted during March 2004. In this report, which covers the first 70 days of his appointment, theCPA-IG has requested that future quarterly reporting dates be changed to July 30, October 30, andJanuary 30. The report can be viewed at the CPA-IG's website, located at http://www.cpa-ig.org/ . Another bill that, if enacted, could potentially affect contracts for Iraqi reconstructionactivities was introduced in the House on October 8, 2003. H.R. 3275 , the CleanContracting in Iraq Act, would prohibit the awarding of sole-source contracts unless the Director ofthe Office of Management and Budget (OMB) approved a waiver under existing law; otherprovisions would required that larger contracts would be awarded to a minimum of two differentcontractors, to promote and ensure competition, and that each contracting agency could be requiredto develop a plan to minimize costs, including the use of Iraqi contractors if lower in costs. Themeasure, which has 25 co-sponsors, was referred to the House Government Reform Committee. CRS Report RL32017 . Circular A-76 Revision 2003: Selected Issues. CRS Report RS21489 . OMB Circular A-76: Explanation and Discussion of the Recently RevisedFederal Outsourcing Policy . CRS Report RL32079 . Federal Contracting of Commercial Activities: Competitive SourcingTargets . CRS Report RL31024 . The Federal Activities Inventory Reform Act and Circular A-76 .

Summary: This report provides answers to frequently asked questions about contracts for thereconstruction and recovery in Iraq after Operation Iraqi Freedom (OIF), and questions aboutcontracts for providing support services to the U.S. military during and after OIF. The reportdescribes the governing authorities for federal government contracting policy in general, and Iraqicontracting policy in particular; the contracting process, issues, and challenges; the authority ofindividual federal agencies; contract awards and the identity of major prime contractors; the businessprocurement process, congressional oversight, and resources for additional information. Due to the transfer of sovereignty on June 30, 2004, this report will not be updated again. For a more comprehensive discussion of Iraq, activities since the transfer of sovereignty, and overallIraqi reconstruction issues, see CRS Report RL31339 , Iraq: U.S. Regime Change Efforts andPost-Saddam Governance , and CRS Report RL31833 , Iraq: Recent Developments in ReconstructionAssistance. For a fact sheet on the application of federal procurement statutes to contracts for thereconstruction of Iraq, refer to CRS Report RS21546, Iraq Reconstruction Resources: Fact Sheet. For a detailed discussion on the application of federal procurement statutes to reconstructioncontracts in Iraq, refer to CRS Report RS21555 , Iraq Reconstruction: Frequently Asked QuestionsConcerning the Application of Federal Procurement Statutes. Key Policy Staff Abbreviations: FDT = Foreign Affairs, Defense, and Trade KSG = Knowledge Services Group