IRAQ: The US decision to exclude countries which opposed the war on Iraq from tendering for 26 reconstruction contracts, which was taken by the US Deputy Defence Secretary, Mr Paul Wolfowitz, and agreed by President Bush, was done for security reasons, a Pentagon statement said.
In a policy document published late on Tuesday, Mr Wolfowitz said he was limiting competition for the contracts worth up to $18.6 billion (€15.2 billion). These will be advertised in the coming days. "It is necessary for the protection of the essential security interests of the United States to limit competition for the prime contracts of these procurements to companies from the United States, Iraq, coalition partners and force contributing nations," he said in a notice published on the website www.rebuilding-iraq.net.
The move has angered the European Commission, France and Germany, but may placate countries such as Britain, Italy and Spain, which provided troops to Iraq but whose companies were excluded from the first round of deals that went to US firms.
The 26 new contracts cover electricity, communications, public buildings, transport, public works and security and justice. Additional contracts are being awarded to oversee those projects.
US trade lawyer Mr Clark McFadden questioned the administration's criterion for the contracts. "Is this going to set a precedent where national security can be used to justify limiting competition?" he asked.
Procurement specialist Prof Steven Schooner, from George Washington University, said it was "disingenuous" to use national security as an excuse and predicted an angry reaction from those nations excluded.
"This kind of decision just begs for retaliation and a tit-for-tat response from countries [such as Germany, France and Russia\]," said Prof Schooner. But a defence official said NATO partners had known for weeks they would not get prime Iraq business. "This is not a slight. We still have many agreements with those countries and good working relationships with them."
Mr Wolfowitz is apparently hoping that excluded companies will put pressure on their governments to join the post-war effort.
"Limiting competition for prime contracts will encourage the expansion of international co-operation in Iraq and in future efforts," he wrote.
The document, dated December 5th, listed more than 60 countries eligible for contracts funded by the $18.6 billion appropriated by Congress to rebuild Iraq. The list includes Britain, Australia, Poland, Japan, Italy, Norway, Spain, Turkey, Jordan, Egypt, South Korea, the Philippines, Romania and Saudi Arabia.
Some officials had argued privately that the US should not limit international competition to rebuild Iraq.
The roll-out of tenders has been delayed in recent days while "high-level" policy decisions were being taken on Iraqi reconstruction and as lawyers checked that the final wording complied with US procurement laws.
US trade lawyer Mr Roger Schagrin said non-coalition firms could still get business from selling material and equipment to the lead contractors.