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US Defends Decision on Iraq Reconstruction Contracts - 2003-12-10

The Bush administration is defending its decision to bar countries that opposed the war in Iraq from bidding on billions of dollars worth of contracts to rebuild the country.

White House spokesman Scott McClellan says there is nothing wrong with keeping more than $18 billion worth of business in the hands of those who are helping with Iraq.

"We are talking about U.S. taxpayer dollars here," he said, "and I think it is appropriate and reasonable to expect that the Iraqi people and those countries who have been working with the United States and contributing forces to the efforts in Iraq would be the ones that would be eligible for the prime contracts."

The Pentagon says restricting contracts is meant to protect "essential security interests."

Those eligible to bid on helping equip Iraq's new army and rebuilding the country's oil industry and public infrastructure are the 63 countries in the U.S.-led coalition including Britain, Spain, and Italy.

The list does not include Germany, France, or Russia which led opposition to the U.S.-led invasion and have been highly critical of the Bush administration's post-war strategy.

Germany says the decision is unacceptable. Russia says the contracts should be open to everyone. France says it is considering a legal challenge through the World Trade Organization.

WTO rules call for government procurements to be non-discriminatory, but they do allow exemptions in cases of national security. Mr. McClellan says the White House is confident the bidding decision complies with its WTO obligations.

At a time when the Bush administration is trying to convince more countries to help with Iraq, Mr. McClellan says he does not believe the restrictions will alienate potential allies. If other countries want to join the effort, they may have a chance to bid on U.S. contracts.

"We welcome the opportunity to talk with those countries about what we have previously announced and made public about what we are doing here with U.S. taxpayer dollars and talking to them about the fact that if additional countries want to participate with our efforts in Iraq, then circumstances can change," he said.

Mr. McClellan says the decision does not prevent companies excluded from the bid list from working in the country as subcontractors or bidding on contracts funded by international donors.