READY TO ROLL Recently graduated Iraqi Army trainees are joining a 170, 000-strong national security force to relieve coalition troops. (Photo by Tom Sawyer for ENR)

Iraqi contractors are expressing frustration following their initiation into the mysteries of government contracting, American-style. Contract opportunities under the $18.6-billion supplemental budget for Iraqi reconstruction are a powerful lure, but the bidding process and contract requirements of the Coalition Provisional Authority’s Project Management Office look daunting to many.

Insurgents have targeted people collaborating with CPA, but interest in reconstruction work funded by the U.S. and other donor nations is high. Lt. Gen. Robert B. Flowers, chief of the U.S. Army Corps of Engineers, says that 170,000 Iraqis are "trained and on the street" in security roles ranging from police to civil defense to pipeline and powerline security.

But for the moment, security is taking a back seat to project delivery concerns. "The American standards needed to bid are difficult to meet," says Adnan al-Shama’a, head of civil projects for RAPCO Group, Baghdad. "They want health, security and safety measures for workers. Before, these never existed in Iraq."

Some 300 Iraqi business leaders attended a Jan. 29 meeting with the PMO and Private Sector Development Team at the Iraqi Convention Center in Baghdad to discuss reconstruction contract opportunities. Coalition officials described training and financing initiatives.

"We want to do everything we can to encourage Iraqi companies to take part in the reconstruction of their country," says Michael Fleischer, deputy director of the Private Sector Development Team.

Col. Anthony Bell, PMO’s head of contracting activity, explains that Iraqi companies must focus on the scope of work, cost estimates and funding requirements to bid successfully. "American rules" will govern contracting, he says. "The evaluation of contract proposals will be done in a transparent manner. We will evaluate only on a technical manner, and then price will be put into play."

Would-be bidders must register on the Iraqi Business Center’s Website, explains Capt. James Sosnicky. "If you don’t register, you won’t be contacted," he says. The registration will categorize Iraqi and foreign companies by professional experience.

But some attendees were downbeat. "I don’t think the bidding process has been fair," said Hamid Ahmed Jenan, director of al-Hamid Constructors. "It was just a lot of talk."

The imposition of U.S. standards bothered some. "They don’t use Iraqi laws for Iraqi subcontractors," says Louay Allose, an engineer with Edward Allose Construction Co., an airport and road construction contractor.

Before the war, regulations were loosely defined because most government contracts were awarded to government-financed contractors or companies with strong connections with the regime.

Raising capital remains difficult for Iraqi companies because the banking system is rudimentary. One Iraqi contractor’s bank manager offered to provide funding for a project if given a 50% stake in the business.

Uday al-Azawi, United Co. project manager, says Website registration also may be a problem. "Many Iraqi businesses don’t have Internet access," he says.

Despite the expressed frustration, there were some positive views. Engineer Allose says that he believes his company had future opportunities in the reconstruction process.