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'I don't know what you're talking about, about international law,' Bush on the decision to restrict Iraq reconstruction contracts, December 11

Bush Defends U.S. Decision on Iraqi Reconstruction Bids, December 11, 2003

Remarks by the President after meeting with the Cabinet

Q: Mr. President, what did the leaders of France, Russia and Germany say to you yesterday about being excluded from contracts, reconstruction contracts in Iraq? And can those countries be considered for the contract if they forgive debt that's owed by Iraq?

THE PRESIDENT: Let me make sure everybody understands that men and women from our country, who proudly wear our uniform, risked their life to free Iraq. Men and women from other countries, in a broad coalition, risked their lives to free Iraq. And the expenditure of U.S. dollars will reflect the fact that U.S. troops and other troops risked their life.

Now, we want to work with all countries. We have a common goal, and that is to see that Iraq is free and peaceful. It is in every nation's interest that Iraq be free and peaceful. And we welcome contributions, we welcome people's willingness to participate in this difficult, yet important job of rebuilding Iraq.


Q: Sir, Chancellor Schroeder says international law must apply in this case. What's you're understanding of the law?

THE PRESIDENT: International law? I better call my lawyer; he didn't bring that up to me. I asked President Chirac and Chancellor Schroeder and President Putin to see Jim Baker, to talk about debt restructuring. If these countries want to participate in helping the world become more secure by enabling Iraq to emerge as a free and peaceful country, one way to contribute is through debt restructuring. And so Jim Baker, with the consent of the Secretary of State, is going to go over and talk to these leaders about that. But I don't know what you're talking about, about international law. I've got to consult my lawyer.

Q: Can I clarify one thing?... You seem to be saying that the boots on the ground are the only qualifications for -- but what about the forgiveness of debt? Isn't that a fairly substantial --

THE PRESIDENT: It is, it would be a significant contribution, for which we would be very grateful. What I'm saying is, in the expenditure of taxpayer's money -- and that's what we're talking about now -- the U.S. people, the taxpayers understand why it makes sense for countries that risk lives to participate in the contracts in Iraq. It's very simple. Our people risk their lives. Coalition -- friendly coalition folks risk their lives, and, therefore, the contracting is going to reflect that. And that's what the U.S. taxpayers expect.

Source: US State Department, Washington File, http://usinfo.state.gov.

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Iraq Reconstruction Contracts for Firms from Supporting Nations, December 5

Wolfowitz memo with attachments lists contracts to be awarded, eligible countries.

Competition for 26 Iraq reconstruction and relief contracts to be paid for by U.S. taxpayers will be limited to sources from the United States, Iraq, Coalition partners and force contributing nations, according to a memo written by Deputy Secretary of Defense Paul Wolfowitz.

The memo, dated December 5 and posted on the Internet December 9, has two attachments. One lists all 26 of the prime contracts, which total $18.6 billion ($18,600 thousand million) and range from water projects to equipping the new Iraqi army. The other lists the countries whose firms will be eligible to compete for the contracts.

Begin Text

Deputy Secretary of Defense
Department of Defense
Washington, D.C.
Dec. 5, 2003


This Determination and Findings (D&F) applies to the 24 construction and services, and indefinite-delivery, indefinite-quantity contracts described in the attachment that are to be awarded by the Coalition Provisional Authority (CPA) and the Department of Defense, on behalf of the CPA. It also applies to one overall program management contract to be awarded to oversee the total effort. Finally, it applies to the indefinite-delivery, indefinite quantity contract to equip the new Iraqi army. These contracts will obligate $18.6B in funds from the Iraq Relief and Reconstruction Fund (IRRF), which were appropriated by Public Law 108-106 for the purpose of relief and reconstruction of Iraq. These contracts will upgrade and rebuild the electrical sector, public works and water, military courts and borders, building, housing and health, transportation, communications, and oil infrastructure. This D&F is executed under the authority of 41 U.S.C. 253 (c)(7) and 10 U.S.C. 2304(c)(.7), as implemented by FAR 6.302-7.

I hereby make the following findings regarding the limitation of competition for the particular procurements of Iraqi Relief and Reconstruction prime contracts identified in attachment number 1 to firms from the United States, Iraq, Coalition partners and force contributing nations:


1. In light of the global war on terrorism and the end of major combat operations, the task of rebuilding the infrastructure of a free Iraq remains critical. The mission to rebuild Iraq is massive in nature and requires major improvements and redevelopment in electricity, public works/water (including wastewater treatment and water distribution), security/justice, transportation/communications (including ports, roads and airports), and buildings/housing/health (including public and government buildings, schools, and medical facilities). The state of the Iraqi infrastructure is a reflection of decades of neglect by a totalitarian regime. Under a free Iraq, the reconstruction process will involve the input of the Iraqi people and their governmental ministries in the development of projects and products that will reinvigorate the country for self-sufficiency in the future.

2. The Coalition Provisional Authority (CPA) has been established to promote the welfare of the Iraqi people through the effective administration of the territory, including in particular working towards the restoration of conditions of security and stability and the creation of conditions in which the Iraqi people can freely determine their own political future. In awarding the contracts, competition and responsiveness to the needs of Iraqi people will be emphasized.

3. The successful reconstruction of Iraq is critical to the viability of the new Iraqi economy. International support and cooperation are necessary for progress in Iraq. An unsuccessful reconstruction effort would have serious negative effects on the ultimate success of the war effort. The President has made clear that the Coalition's actions to reconstruct Iraq are indispensable for national security and national defense purposes.

4. 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. Thus, it is clearly in the public interest to limit prime contracts to companies from these countries.

5. Every effort must be made to expand international cooperation in Iraq. Since May 2003, Coalition forces other than those from the United States have increased from 14,000 to 23,700. U.S. force levels, accordingly, have decreased by approximately 12,000. Limiting competition for prime contracts will encourage the expansion of international cooperation in Iraq and in future efforts.

6. Coalition partners share in the US vision of a free and stable Iraq. The limitation of sources to prime contractors from those countries should encourage the continued cooperation of coalition members.

7. Including Iraqi firms in the reconstruction process makes them an active stakeholder in the rebuilding of their country. Besides helping the Iraqis generate the income to rebuild their country, it enables the Iraqi people to assume more responsibility for their country's economic and infrastructure development. This leads to a sense of ownership and pride in the reconstruction process and provides long-term stability to the political and economic transformation in Iraq, making it a model for other countries to follow and sending a clear message to the people of the Middle East and beyond that freedom and democracy are the best paths for the future.

8. Upon limitation of sources to firms from the United States, Iraq, Coalition partners and force contributing nations, acquisition of the 26 Iraqi Relief and Reconstruction contracts will use the competitive procedures prescribed in FAR 6.102.


Based upon the findings above, I hereby determine that, in accordance with U.S.C. 253(c)(7) and 10 U.S.C. 2304(c)(7), as implemented by FAR 6.302-7, it is necessary in the public interest to use other than competitive procedures in the procurements for the prime contracts described on the attachment. Such procurements shall use competitive procedures, with participation limited to sources from the United States, Iraq, Coalition partners and force contributing nations.

Paul Wolfowitz

1. Contract Listing
2. Eligible Countries


Iraqi Reconstruction & Relief Contracts to be Awarded

1. Program Management Office Services
2. Program Management Services - Electrical Sector
3. Design-Build IDIQ Construction Services for New Power Generation (Southern region)
4. Design-Build IDIQ Construction Services for New Power Generation (Northern region)
5. Design-Build IDIQ Construction Services for Rehabilitation of Existing Power Generation Facilities (Country-wide)
6. Design-Build IDIQ Construction Services for Transmission/Distribution/Communication and Control (Northern region)
7. Design-Build IDIQ Construction Services for Transmission/Distribution/Communication and Control (Central (Baghdad) region)
8. Design-Build IDIQ Construction Service for Transmission/Distribution/Communication and Control (Southern region)
9. Program Management Services - Public Works/Water Resources Sector
10. Design-Build IDIQ Construction Services for Public Works and Water Projects (Northern region)
11. Design-Build IDIQ Construction Services for Public Works and Water Projects (Central region)
12. Design-Build IDIQ Construction Services for Public Works and Water Projects (Baghdad region)
13. Design-Build IDIQ Construction Services for Public Works and Water Projects (Southern region)
14. Design-Build IDIQ Construction Services for Public Works and Water Projects (Nationwide)
15. Program Management Services - Security/Justice Sector
16. Design-Build IDIQ Construction Services for Security and Justice facilities
17. Design-Build IDIQ Construction Services for Iraq National Defense Force Facilities
18. Program Management Services - Building/Health Sector
19. Design-Build IDIQ Construction Services for the Building, Housing and Health sector
20. Program Management Services - Transportation and Communications Sector
21. Design-Build IDIQ Construction Services for Transportation Projects
22. Design-Build IDIQ Construction Services for Communication Projects
23. Program Management Services - Oil Sector
24. Restore Iraq Oil Services (Northern region)
25. Restore Iraq Oil Services (Southern region)
26. Equip New Iraqi Army


Countries Eligible to Compete for Contracts Funded with U.S. Appropriated Funds for Iraq Reconstruction:

Costa Rica
Czech Republic
Dominican Republic
El Salvador
Marshall Islands
New Zealand
Saudi Arabia
Solomon Islands
South Korea
United Kingdom
United States

As of November 25, 2003 per NSA, Defense Policy

Source: US State Department, Washington File, http://usinfo.state.gov.

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International Reaction


Russian Deputy Minister of Foreign Affairs Yuri Fedotov: From the formal point of view it is hard to dispute the United States' right to dispose of the funds it allocates from its own budget for the reconstruction of Iraq.

At the same time, this decision has an obvious political implication. That it will serve to broadly mobilize the international community in the interests of rehabilitating war-ravaged Iraq is not likely. Rather the other way round.

Stakes are again being put on unilateral, private actions which hitherto have led to nothing good. The situation in Iraq remains dangerous and unstable. There are no signs of improvement in the Iraqi people's life. That is why Russia has consistently been advocating that settlement in Iraq should be effected with the international community's broad participation under the aegis and with the leading role of the UN.

Only thus is it possible to ensure a genuine settlement and give the Iraqi people the opportunity to start a new life. If, however, the coalition members intend to act on their own then in this case they can hardly count on support and understanding from other countries.

Source: 'Russian Deputy Minister of Foreign Affairs Yuri Fedotov Answers a Question from ITAR-TASS News Agency Concerning Statements by US Officials Regarding Contracts in Iraq', http://www.russianembassy.org, December 10, 2003.

Russian Defense Minister Sergei Ivanov: "Iraq's debt to the Russia Federation comes to $8 billion and as far as the Russian government's position on this, it is not planning any kind of a write-off of that debt."

Source: Robert H. Reid, 'Iraq Bids Ban Fuels U.S.-Europe Rift', Associated Press, December 10, 2003.


Prime Minister Paul Martin: "I understand the importance of these kinds of contracts, but this shouldn't be just about who gets contracts, who gets business... It ought to be what is the best thing for the people of Iraq."

Deputy Prime Minister John Manley: "It would be difficult for us to give further money...To exclude Canadians just because they are Canadians would be unacceptable if they accept funds from Canadian taxpayers for the reconstruction of Iraq."

Source: 'Martin slams U.S. ban on bids for Iraqi contracts; Manley suggests aid halt', Yahoo! News, Canadian Press, December 10.


Statement by the French Foreign Ministry Spokesperson (Paris, 10 December 2003)

Q - US Deputy Defense Secretary Paul Wolfowitz yesterday excluded countries that opposed the invasion of Iraq from contracts for reconstruction in that country. What's the reaction of France which was hoping to participate in that key phase?

A - We have taken note of the guidelines signed by Paul Wolfowitz. We are studying the decisions to see whether they are compatible with international law on competition, examining them in liaison with our partners that are concerned, specifically the European Union and Commission.

Source: French Ministry of Foreign Affairs, http://www.diplomatie.fr.


German Foreign Minister Joschka Fischer: "We noted with astonishment today the reports and we will be speaking about it with the American side."

Source: Robert H. Reid, 'Iraq Bids Ban Fuels U.S.-Europe Rift', Associated Press, December 10, 2003.

European Commission

"The European Commission deeply regrets the decision of the United States to exclude countries that did not participate in the war in Iraq from US reconstruction contracts. This decision is difficult to accept and unjustified. Furthermore, it is a political mistake because it sends a most unhelpful signal at a time when the international community is constructively working on making of Iraq an open, transparent, democratic and prosperous country.

This is no time to reopen old wounds but to focus on making concrete progress towards that objective.

As requested at the Madrid Conference on Reconstruction in October 2003, we urge all donors to Iraq including the US to apply open, transparent and non-discriminatory contracting procedures. We therefore hope the US will reconsider the decision announced yesterday.

The Commission will examine the 26 contracts at stake to determine whether procurement restrictions are in line with the commitments undertaken by the United States in the World Trade Organisation (WTO) Government Procurement Agreement (GPA).

We also call on the US Administration itself to re-examine the WTO compatibility aspects before proceeding with this ill thought out action. We do not need another WTO dispute at this time."

Source: 'EU-US: Commission urges US to reconsider Iraq reconstruction contracts decision,' IP/03/1713, Brussels, December 11, 2003, http://europa.eu.int/comm/external_relations/iraq/intro/ip03_1713.htm.

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