Contracting by USAID For Reconstruction of Iraq

Questions And Answers

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT
FACT SHEET

WASHINGTON, DC 20523
PRESS OFFICE
http://www.usaid.gov
(202) 712-4320

2003-043

UPDATED

May 2, 2003

As the President has repeatedly stated, the United States intends to stay the course in Iraq and help the people of Iraq rebuild their country in the aftermath of war. Iraqi and international participation will be vital to a successful, post-Saddam reconstruction effort.

Following are questions and answers on the USAID procurements that will support the reconstruction of Iraq.

1. What is the source of funding for the contracts and grants that USAID is awarding?

   Funds appropriated by the U.S. Congress - ultimately the U.S. taxpayer. Revenues from the Oil for Food program, or other Iraqi or international sources, will not fund these contracts.

2. What will the initial contracts cover?

   Between January 31st and March 4th, USAID issued eight Requests for Proposals or RFPs for work in Iraq. These are for capital construction including bridge, road and port rehabilitation and repair; seaport administration; airport administration; public health; primary and secondary education; local governance; theater logistical support and personnel support.

3. What is the total amount for reconstruction?

   The President's budget request contained $1.7 billion for reconstruction and $543 million for humanitarian relief efforts. However, Congress will make the final determination about the funds that can be spent.

4. Who will the contracts go to?

   The prime contracts will be awarded to U.S. firms through the competitive procurement process. Existing U.S. foreign assistance law establishes a preference for U.S. firms. There have been eight contracts signed to date directly with USAID.

   The personnel support contract was awarded to Arlington, Virginia-based International Resources Group (IRG); the seaport administration contract was awarded to Seattle, Washington-based Stevedoring Services of America (SSA); and the local governance contract was awarded to the North Carolina-based non-profit organization, Research Triangle Institute (RTI).

   Information on the dollar amounts of these contracts as well as the entire Requests for Proposals (RFPs) can be found on the website.

5. Does USAID follow full and open competition procedures for awarding contracts?

   Yes, full and open competition is the standard rule. USAID awards contracts in accordance with the Federal Acquisition Regulation (FAR), the rules that apply generally to all federal agencies. The Agency is responsible for the purchase of over $2.5 billion of goods and services each year in the support of U.S. foreign policy goals in over 100 countries.

6. What about the first eight contracts for Iraq reconstruction?

   USAID chose to limit competition -- in full compliance with the FAR -- for these Iraq reconstruction contracts to certain U.S. companies that are known to have a combination of demonstrated technical capability, proven accounting mechanisms, ability to field a qualified technical team on short notice or the requisite clearance to handle classified national security material. This was done in accordance with existing regulations that permit limited competition when it is necessary to move forward quickly with foreign assistance programs.

7. Why did USAID do this?

   As the U.S. Government's first responder to foreign emergencies, disasters and humanitarian crises, USAID undertakes contingency planning for multiple relief and reconstruction scenarios in all corners of the developing world. In the case of Iraq, USAID made the determination that it could very well be called upon at any time to deliver assistance rapidly in order to meet various contingencies. At that point, USAID decided to undertake specific procurement planning actions, but did not want to do anything that might have complicated diplomatic efforts to prevent war. Therefore, contract negotiations had to be conducted on a sensitive and expedited basis. Events have confirmed that these contracts needed to be awarded and available for use as soon as possible.

8. In all, how many U.S. firms were invited to submit proposals for these various contracts? How many of the first seven contracts will be sole-sourced?

   In all, 21 firms were solicited by USAID.

   Only one of the first eight contracts was sole-sourced by USAID, for personnel support, which was awarded to IRG. IRG has a two decade-plus record of work with USAID and with international development agencies in more than 120 countries.

   The contract needed to be done right away to support the rapid scaling up of the reconstruction planning effort. Sole source means that only one firm was solicited to undertake the work because it was uniquely qualified to do so.

9. Will there be additional contracts, beyond the initial eight?

   Yes, up to three more contracts are anticipated for agriculture, economic governance and monitoring and evaluation of the capital construction contract. RFPs have not been issued for these but are expected in the very near future.

10. Will USAID limit competition for these contracts and grants?

    This has not been decided yet. We are reviewing possible approaches, seeking to maximize competition while responding swiftly to the extraordinary circumstances in Iraq.

11. What about sub-contracting? Who is eligible for this work?

    Prime contractors, who are responsible for the successful completion of their contracts, will be able to award subcontracts to qualified U.S. and foreign companies. The latter will include -- but not be limited to -- those companies located in coalition partner countries.

    In fact, in January 2003 USAID waived a standard procurement provision known as "source and origin" to allow a great number of countries to be eligible to compete for sub-contracts. Companies located in non-restricted countries (those not on the terrorist list) can compete, just as U.S. companies can compete, to be considered as sub-contractors.

12. Are there opportunities for U.S. small businesses?

    A number of the initial eight RFPs required offerors to submit small business sub-contracting plans. In addition, for upcoming RFPs, USAID will post on its website the names of firms that receive the RFPs so that sub-contractors have the opportunity to contact the prime contractors should they wish to compete for work.

13. How can interested firms explore sub-contracting opportunities with the prime contractors?

    To assure transparency, USAID will post the names of the prime contractors on the USAID website as contracts are finalized. Since decision-making authority for subcontracting sources rests with the prime contractors, they will be free to choose the best combination of U.S. and foreign companies as subcontractors in order to fulfill contractual requirements.

    USAID has also started hosting a number of seminars on its reconstruction plans for potential sub-contracting firms beginning the week of April 14.

14. Will there be opportunities for non-governmental organizations and educational institutions?

    Yes. USAID has provided funding to domestic NGOs, including Save the Children, the International Medical Corps, Mercy Corp International and the International Rescue Committee. There will be additional opportunities to be awarded USAID funds for programming in the future. On April 11th, USAID published a Request for Applications (RFA) for the Community Action Program on its website. A second RFA will be issued for a program to establish university linkages between U.S. universities and Iraqi universities in key areas such as science, technology and teacher training.

The U.S. Agency for International Development has provided economic and humanitarian assistance worldwide for more than 40 years.

For more information on USAID's humanitarian relief efforts in Iraq, please visit www.usaid.gov/iraq/.

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