Mr. President, we rise today to discuss the call of a bipartisan coalition for some badly needed sunshine in the process of awarding Iraqi reconstruction contracts. I particularly commend several of my colleagues for joining me in the…
Mr. President, we rise today to discuss the call of a bipartisan coalition for some badly needed sunshine in the process of awarding Iraqi reconstruction contracts. I particularly commend several of my colleagues for joining me in the bipartisan legislation, the Sunshine in Iraqi Reconstruction Contracting Act introduced April 10.
First, Senator Clinton and I are especially grateful to the chair of the Governmental Affairs Committee, Senator Collins of Maine. Not only is she an excellent chair of the committee that will take up this legislation, she is also an expert on procurement law, a real authority on the very issue we have addressed in our legislation. We are very proud to have her as our lead bipartisan coalition builder on this legislation because her leadership qualities on the committee and special proficiency on this topic give me great confidence this bill is the right move for America, the right move for the Senate, particularly the right move for our taxpayers, and we are very grateful for Senator Collins' support and participation in this effort.
Our legislation has a simple aim. It says if a Federal agency awards an Iraqi reconstruction contract without the benefit of open and competitive bidding, that agency must publicly justify their decision to do so. I will tell the Senate and my colleagues the events and news reports of the 21 days since our bill's introduction have only strengthened our bipartisan conviction that Iraqi reconstruction contracts must be awarded in the sunshine and not behind a smokescreen.
There are two primary reasons we believe it is so important American taxpayers deserve additional details about this closed and secretive process. First, there is a huge amount of money on the line, a projected $100 billion in taxpayer funds. Second, the General Accounting Office has already reported sole-source or limited-source contracts almost always are not the best buy for the taxpayer.
In my view, the need for explanation increases a hundredfold if Federal agencies are going to employ a process that may expose taxpayers to additional cost. When we introduced this legislation, we were concerned that the U.S. Agency on International Development had already awarded four of eight major Iraqi contracts through a closed bid or no-bid process. Even at that time, sole-source and limited- source contracts already seemed to be the rule and not the exception for rebuilding Iraq. USAID announced it would limit competition to companies they felt had the technical ability and accounting ability to handle these matters.
But since our legislation was introduced, not only have a number of Federal agencies continued to award no-bid or closed-bid contracts, but once the bids have been solicited, they even started to ignore or circumvent their own publicly stated criteria for limiting the pool of applicants. More than ever, our bipartisan coalition believes if the Federal Government chooses not to use free market competition to get the most reasonable price from the most qualified contractor, then at a minimum they should tell the American people why that is necessary. Sunshine is the best disinfectant and the news reports of recent days simply beg for a clearing of the air.
On April 11, the day after we introduced our bill, one firm secured a $2 million Iraq school contract through an invitation-only process. On April 18, USAID awarded the biggest contract yet through an invitation- only bid process. A $680 million contract to rebuild Iraq's infrastructure was awarded to Bechtel. On April 19, a $50 million policing contract was awarded through a closed bidding process. On the same day, the Washington Post reported that a renewable $7.9 billion contract for personnel services in Iraqi reconstruction was awarded February 25, nearly a month before the war began, with a single company invited to bid for the job. According to the press reports, that invitation came a full 55 days before the start of the hostilities.
As each of the contracts was awarded, Federal agencies justified the no-bid or closed-bid process only by saying that they simply had to move quickly. That is basically one of the only arguments the agencies have left. Originally, USAID said the only companies with security clearances could be invited to apply. But that argument fell apart just a couple of days ago. USAID's own inspector general revealed that USAID waived the security clearance requirement when one bid was awarded. It turned out that the winner of a $4 million ports contract, in fact, did not have the security clearance that was supposedly essential when the limited bid process started. In effect, USAID eliminated the very criteria it used to limit bidders on the project. USAID suddenly said the outbreak of war in Iraq simply made the security clearance process unnecessary.
The only reason the United States would be awarding contracting to rebuild Iraq would be if the United States went to war. So if the requirement for security clearance was needed before the war broke out, it is hard to see what would have changed once the war started. As a Member of the Senate Intelligence Committee, I thought the argument was a bit shaky at the outset. I was not certain why you would need all of the security clearances to fix the sewer system. Weeks ago, it was clear that most of the Iraqi work would be subcontracted out to companies who did not meet the security requirements in the first place. But the report from the inspector general this week has significantly increased my concern. It turned the agency's argument about security clearances from suspect to essentially ludicrous.
This incident makes the case better than any other that agencies should have to clearly and publicly state how they are choosing companies for these invitation-only bids. Perhaps if they know they have to face the public on these issues they will have better explanations or a more open process.
We want to be clear, in the presence of actual security concerns, our legislation assures the protection of classified information. But at the same time, it does give the Congress oversight over the billions in taxpayer money that Americans are being asked to commit in Iraq and that is desperately needed. Historically, open and competitive bidding by Federal agencies has been the tool to get the best value for the taxpayers of our Nation.
Again, independent reports from the General Accounting Office show that in the past, the soul-source or limited-source contracts have not been before the buy. According to the General Accounting Office, military leaders have
often simply accepted the level of services given by a contractor without ever asking if it could be done more efficiently or at a lower cost. In the case of Iraq, again, with estimates being low-balled at $25 billion and some exceeding $100 billion, taxpayers in our country have a great interest in making sure this money is spent efficiently.
I also note in wrapping up that many of these contracts are so-called cost-plus contracts. They pay a company's expenses, plus a guaranteed profit of 1 to 8 percent. There are no limits on total costs, so the more a firm charges in expenses, the more profit it is going to make. If the Federal Government is going to spend the money of the people of Oregon in this fashion without asking for competitive bids, I think the people of Oregon and the people of this country deserve to know why. There simply should not be a place for waste when you are talking about at least $100 billion of taxpayers' cash.
I understand the argument that these contracts need to be awarded quickly. I understand in many cases the companies receiving them have a long history of international work. I simply believe if the need for speed can adequately justify these closed-bid processes that may expose the taxpayers to additional expenditures, then those agencies need to make public why they would take these extraordinary measures that could very well waste significant amounts of taxpayer money.
I want to yield my time to Senator Clinton. I thank her. She is on the Senate Armed Services Committee. She and I and Senator Collins have been a bipartisan coalition.
I would also like to note a number of other Senators--Senator Byrd in particular, who serves on the Appropriations Committee and the Armed Services Committee--have been very helpful as well. But I yield to Senator Clinton and particularly express my support to her. With Senator Collins, we have tried to make the focus that there is a bipartisan need for protecting taxpayers, to make sure this money is spent wisely at a time when there is so much economic hurt across the Nation.
I yield to the distinguished Senator from New York.
I will.
The Senator from New York has summed it up. This is Congress's call. The buck in fact does stop with the Congress.
What we are talking about here is making sure Congress keeps in place vigorous oversight about the process. The process is what has, in our view, put taxpayers' dollars in some peril. People have focused on one company or another. There are inquiries underway. What we are going to do is protect the process that ensures, as the Senator from New York suggests, that the taxpayers are protected and Congress in fact has the last word in making sure this money is spent responsibly.
The Senator is correct. Again, that is what the legislation is about. There is a certain irony in that that information is in fact already available. The bipartisan legislation we have put together with the Chair of the Governmental Affairs Committee, Senator Collins, says what is already completed work, in terms of the analysis and justification, simply would be made public so as to reinforce the proposition that there be the maximum amount of transparency, the maximum amount of accountability, and so the public can see why, if necessary, a special process that doesn't involve open bids would be necessary.
The point of the Senator about the credibility of the Government I think is fundamental. I think we all know if people see something taking place behind closed doors, in secret, without the open and full process of competitive bidding, it just engenders suspicion, it just engenders a sense of skepticism and cynicism about government that just does not have to be.
It is particularly troubling here because the General Accounting Office, the nonpartisan organization of auditors, has already documented there is a problem. So we have a combination of taxpayer skepticism about work done in secret coupled with the long history of the General Accounting Office's skepticism about these reports, and here is an area that just cries out for sunshine.
I talked about sunshine being the best disinfectant, but certainly since we introduced this bill with Senator Collins over the last 21 days, the fact we have seen all these contracts--in fact, one of them where the agency just waives their own process, without an explanation--I think highlights the Senator's point that the Government's credibility is at stake.
Mr. President, to wrap up, I would like to reaffirm a point that the distinguished Senator from New York mentioned with respect to the feeling of our citizens at a time when there are so many schools that are underfunded and seniors can't afford their medicine and other services. When I was home over the break--perhaps the Senator from New York heard this as well--many constituents came up to me and said: We are really glad that you are pushing this bill at more competitive bidding and reconstruction contracts. But, to tell you the truth, why don't you just have Iraqi oil pay for all of the reconstruction? We don't need the taxpayer money.
There already is a sense about the Nation that we have to be careful about how these funds are being used. I think there is a role for the United States to play. I think it is clear that is a part of an important contribution that our country can make with the conflict winding down. But it just reaffirms in my mind how critical it is to use this money wisely. With the American people hurting now with what one might say is the highest unemployment rate of our country, you can't explain to the taxpayers of this Nation frittering away dollars on contracts that are let without competitive bids.
We look forward to colleagues of both political parties joining us in this effort. It seems to me a bill such as this should be passed unanimously with all 100 Senators onboard. We look forward to seeing the resolution of this legislation to protect the taxpayers.
Again, I want to close by expressing my thanks to the chairman of the committee where this legislation was sent. Senator Collins has been a critical partner in this effort to direct procurement law. Senator Byrd, who holds, of course, a longstanding interest in this matter and serves on both the Appropriations and the Armed Services Committees, has been invaluable to me in particular in providing counsel with respect to how to move this legislation forward. Together we look forward to passing this bill and protecting the taxpayers' interests as perhaps $100 billion of taxpayer money is spent in the rebuilding of Iraq.
I yield the floor.