U.S. Shuts Out France, Germany for Iraq Work

In a policy document released on Tuesday, Wolfowitz said he was limiting competition for 26 reconstruction contracts worth up to $18.6 billion that will be advertised in 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," Wolfowitz said in a notice published on the web site www.rebuilding-iraq.net.

The move is likely to anger France and Germany and other traditional allies in NATO and the U.N. Security Council who are being blocked out of prime contracts after their opposition to the war. They may bid for sub-contracts.

But the decision will 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 U.S. firms.

The contracts cover electricity, communications, public buildings, transportation, public works and security and justice. Additional contracts are also being awarded to oversee those projects.

TIT FOR TAT RESPONSES

U.S. trade lawyer 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 Schooner.

But a defense 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."  - 

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