AVIATION UPGRADE Work already under way includes upgrade at airfields to meet international standards. (Photo courtesy of Bechtel)

If Congress goes along with President Bush’s proposal, the scope–and the cost–of rebuilding post-war Iraq will take a quantum leap. Recognizing the increased magnitude of the task, the White House is seeking $14.5 billion in additional funds to reconstruct Iraq’s infrastructure. The administration also has brought in retired Admiral David Nash, former head of the Naval Facilities Engineering Command, to help oversee program management of the gargantuan nation-building effort. But congressional Democrats are skeptical about the size of the reconstruction spending proposal, which Bush sent to Congress on Sept. 17, and how the White House wants to fund it.

The infrastructure plan is part of an $87-billion supplemental spending proposal. Of the total, $51 billion would go to support the U.S. military in Iraq. "This request is urgent," L. Paul Bremer III, head of the Coalition Provisional Authority, told the Senate Appropriations Committee Sept. 22. For the reconstruction, "we need to emulate the military practice of using overwhelming force in the beginning," he added.

The federal funds would cover only part of a rebuilding that officials estimate will cost $50 billion to $75 billion. They hope to close the gap with revenue from Iraqi oil and contributions from multilateral organizations and other countries. Bush told the United Nations General Assembly Sept. 23, "Now, the nation of Iraq needs and deserves our aid and all nations of goodwill should step forward and provide that support."

Bush has a strong ally in Appropriations Chairman Ted Stevens (R-Alaska) for the $87 billion seeks from Congress. "I believe the supplemental is necessary to protect the lives of our people," Stevens said. Democrats take a different view. Sen. Robert Byrd (D-W.Va.) called the $87-billion plan "incredibly costly," and said it would push the 2004 deficit to $535 billion.

The largest piece of the reconstruction program, to be directed by Bremer’s organization, would be $5.7 billion for electric power, including $2.9 billion for generation and $1.55 billion for transmission. Other items are: $3.76 billion for water and sewerage, including $2.8 billion for 15,000 km of water main line; $2.1 billion for oilfields, including $1.2 billion for infrastructure; $875 million for water resources, including $200 million for an Umm Qasr-to-Basra water pipeline and treatment plant; $835 million for transportation and telecommunications, including $165 million for airport work; $240 million for roads and bridges; and $860 million for health projects, including $150 million for a new pediatric hospital.

NASH

The plan is on a tight, two-year timetable and "every contract will be competitively bid," says Bremer. Nash, who has a Dept. of Defense post as director of CPA’s office of program management, told ENR, "What I’m trying to do is to rally the industry. This is an opportunity for our international industry to stand and deliver." One of the goals of the infrastructure reconstruction effort will be to "build capacity in program management and in the construction industry in Iraq," he says.

The U.S. Agency for International Development has tried to get a running start on the program, if Congress approves the funds. USAID issued a draft request for proposals on Sept. 15 for a second capital construction contract to follow the $680-million contract awarded to Bechtel National Inc. in April.

A Sept. 9 notice on USAID’s Website estimated the new contract at $1.5 billion. But agency spokesperson Ellen Yount says the cost-plus-fixed-fee contract’s value hasn’t been set and is "subject to the availability of funds." The draft prioritizes electrical and potable water systems and wastewater treatment; surface transportation, public buildings, ports, waterways and airports; technical support, cost recovery advice, construction management and procurement services for Iraqi ministries.

In the meantime, USAID has raised the ceiling on Bechtel’s April contract by $350 million. The agency says the added money will let Bechtel continue its work until the second contract is awarded. Yount says most of the $350 million will go for electricity restoration and sanitation. The funds come from the $2.5 billion Congress approved earlier this year.

The draft RFP raised concerns among potential bidders, all of whom requested anonymity. One says USAID appears to be throwing more evaluation weight on factors such as management skill and technical approaches and less on "past performance and cost reasonableness."

Others wonder whether the procurement exercise is just a more politically correct way to award "Phase II" of USAID reconstruction to the incumbent, Bechtel National. One source says that RFP terms relating to a contractor’s approach to dealing with DOD, non-governmental organizations and other Iraq-specific issues may "make it difficult for other contractors to step up." But others contend that USAID definitely is seeking additional contracting assistance.

Construction executives also question RFP stipulations that make reconstruction security management a contractor function rather than the military’s. "But we don’t know what will change in the final [RFP]," says one. Even so, sources say bidding teams are already being formed. "We’re very interested," says an executive of one leading contractor.