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Reason Foundation

Iraqi contracts: War opponents need not apply

Ted Balaker
December 9, 2003, 9:02am

From the NY Times: The Pentagon has barred French, German and Russian companies from competing for $18.6 billion in contracts for the reconstruction of Iraq, saying the step "is necessary for the protection of the essential security interests of the United States." The directive, which was issued by the deputy defense secretary, Paul D. Wolfowitz, represents perhaps the most substantive retaliation to date by the Bush administration against American allies who opposed its decision to go to war in Iraq. The administration had warned before the war that countries that did not join an American-led coalition would not have a voice in decisions about the rebuilding of Iraq. But the administration had not previously made clear that French, German and Russian companies would be excluded from competing for the lucrative reconstruction contracts, which include the rebuilding of Iraq's infrastructure and equipping its army. Under the guidelines, which were issued on Friday but became public knowledge today, only companies from the United States, Iraq and 61 other countries designated as "coalition partners" will be allowed to bid on the contracts, which are financed by American taxpayers. Among the eligible countries are Britain, the closest American ally in Iraq, as well Poland and Italy, which have contributed troops to the American-led security effort. But the list also includes other nations whose support has been less evident, including Turkey, which allowed American aircraft to fly over its territory but barred American forces at the last minute from using its soil as a staging point to invade Iraq from the north in March. An interesting quotation from directive: "Limiting competition for prime contracts will encourage the expansion of international cooperation in Iraq and in future efforts." The White House is banking on the hope that a little pressure to the pocketbook will bring the Frances and Germanys of the world to its side on the War on Terror. I suppose that could happen, but it could also further strengthen these nations' anti-war resolve. What's more of a sure bet is that limiting competition could make the reconstruction effort more expensive than it needs to be, as well as limiting contractors' overall level of expertise.

Ted Balaker is Producer


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