washingtonpost.com  > Politics > Bush Administration

U.S. May End Ban On Iraq Contracts

By Mike Allen
Washington Post Staff Writer
Friday, January 16, 2004; Page A12

Bush administration officials are leaning toward reversing a ban on bidding by French, German and Russian companies for U.S.-financed contracts in postwar Iraq, administration aides said yesterday.

The disclosure follows President Bush's announcement Tuesday that he would allow bids by companies based in Canada, which had been among the countries blacklisted by an administration policy that opened bidding only to nations that had joined the U.S.-led coalition in the Iraq war.

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That announcement, which Bush made in Mexico beside Canadian Prime Minister Paul Martin at the Summit of the Americas, was one of the few times the administration has publicly conceded error in its Iraq policy.

Officials said the decision on France, Germany and Russia was not final, and said no announcement is imminent.

The release of the Dec. 5 memo outlining the policy reopened diplomatic wounds that had begun to heal since the run-up to the war. Several major U.S. allies complained that the Pentagon was branding them a security risk when they were being asked to help fund postwar operations in Afghanistan and Iraq.

The administration immediately began backtracking, and pointing out ways that companies in blacklisted countries could still bid. The policy applies only to prime contracts, not subcontracts, and only to construction contracts, not to contracts for services.

Officials said national security adviser Condoleezza Rice had spoken by telephone with her French counterpart, Maurice Gourdault-Montagne, and pointed out that French companies are eligible to bid for prime contracts on non-construction services.

Alcatel, a French telecommunications giant, and Siemens, a German electronics firm, are already working in Iraq as subcontractors.

A senior official said the White House has always said the contracting policy could change as circumstances change, and the countries are being given credit for their pledges to postwar Iraq.

The administration has pointed to Bush's lunar and Mars exploration plan as an example of ways that the United States wants to work with former adversaries.

"The president has always tried to stress that there are areas where we're going to disagree, but that's not going to prevent us from being able to pursue a common agenda elsewhere," a senior administration official said. "Where he's said the most about that is probably about Germany, and the efforts that they're providing in Afghanistan. He deeply appreciates that."

Defense Secretary Donald H. Rumsfeld had signaled Tuesday that the administration planned to give flexibility to several of the countries on the list. He declined to name them. "There were three or four I saw on the list as the interagency [group] was working this," he said.


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