Press Conference with Senator Susuan Collins (R-ME) and Senator Ron Wyden (D-OR)
HEADLINE: PRESS CONFERENCE WITH SENATOR SUSAN COLLINS (R-ME) AND SENATOR RON WYDEN (D-OR)
TOPIC: IRAQI RECONSTRUCTION CONTRACTS
LOCATION: SENATE RADIO TV GALLERY
BODY:
SEN. COLLINS: Good morning. I'm Senator Susan Collins from Maine. I am pleased to be here this morning with my colleague, Senator Ron Wyden from Oregon -- I always have to remember whether it's Oregon or Washington -- you know, that's the way we East Coasters are.
I chair the Senate Governmental Affairs Committee, which has jurisdiction over federal contracting law. Senator Wyden and I have been working together on contracting issues for some time, so it should come as no surprise that we are once again joining forces to move forward with another initiative today.
Earlier this year we offered an amendment to the Defense Department authorization bill to ensure that full and open contracting procedures were followed for DOD contracts. Today we are proposing to offer an amendment to the Iraqi supplemental appropriations bill next week to ensure that al of the contracts awarded under that bill, whether it's to support the military or to build the Iraqi infrastructure, are awarded in a way that uses full and open competition.
Today's amendment is really about accountability. It's about ensuring fairness and openness when contracts are made to support our military, or to build the infrastructure. And that's why we want to make sure that it's a transparent, open and competitive process that is used to award contracts.
We would require all of the contracts awarded under this bill to be awarded under the Competition in Contracting Act, which requires the use of full and open competition. If an agency decides for some reason that full and open competition would not be used, we would require a notification to Congress, and the publication of the reasons that full and open competition was not used in the Federal Register. Our amendment would require this disclosure, so that Congress can conduct vigorous oversight of the contracting process.
Our approach has been to offer a bipartisan, reasoned amendment that will ensure that the American taxpayers are getting the best quality and the lowest price in awarding contracts. Now, some earlier contracts in Iraq were awarded without going through the normal contracting process. We want to make sure that contracts awarded in the future follow the standard roles of full and open competition. And in that regard, I was heartened yesterday to hear Ambassador Bremer say at the Armed Services Committee that he is committed to following the competitive procedures that are in our law.
Now I'd like to introduce my partner in this endeavor, Senator Ron Wyden. He has been known for his commitment to good government, to government reform, and I've been very pleased to work with him on a number of initiatives. Senator Wyden?
SEN. WYDEN: Well, thank you Senator Collins. And so all understand, the chair of the Governmental Affairs Committee, Senator Collins, is clearly the Senate's leading authority on contracting issues. She has been immersed in these questions for years and years, I think going back to your staff days. So I am just thrilled to be able to be part of this bipartisan effort.
Senator Collins has said it very well, and let me if I might just make a few additional comments. Sunshine has always been a particularly good disinfectant. So today we are launching a bipartisan effort to let the sun shine as brightly on the Iraqi contracting issue as it does on the Iraqi desert. And suffice it to say $87 billion is an astounding sum of money. Certainly the American people aren't asked to spend such a jaw-dropping sum very often. And what Senator Collins and I are saying, and what we hope to get the Senate to say next week, is that the federal government should be as accountable for its spending as the typical American has to be. When you get your statement back from the bank, it tells you where your money was spent. And so far the statements that have been coming back with respect to Iraq have been pretty skimpy, if not blank, with respect to the specifics. And my constituents are unwilling to write a blank check for Iraq, when they are worried that their own checks for their family bills might be returned stamped "insufficient funds." And with family budgets and the federal budget so tight, from Bend, Oregon to Bangor, Maine, Americans want their government to turn every single penny over twice. And competitive bidding is the best way to do that. It ensures that the American people are getting the best product and services at the best prices.
And it just doesn't pass the smell test to have so many of these companies not in effect be part of a competitive bidding process. The free market requires openness and hard-nosed competition, and in that kind of marketplace orientation, the best businesses win out.
So what we are going to be doing next week -- we are going to try to convince our colleagues to do -- is to say before $87 billion is shoveled out the door -- this huge sum of taxpayer money -- let us take steps, as Senator Collins has said, on a bipartisan basis, to safeguard the taxpayer's funds. And this brings accountability. And for the first time some of you may be asking, What's different between this and previous efforts? For the first time there is now a bipartisan effort to restrict the funds to in effect tie the money to ensuring that there is open contracting, that there is competition, and there is disclosure. We have said for many months, the two of us, that there are rare instances where open bidding may not be warranted. But certainly if you want to go that route, you should carry a very heavy burden to make the case as to why you wouldn't go forward that way, and in effect why a closed process would be the best deal for the public. We think that the rule has always been to promote openness and competition. Somehow we seem to have gotten away from that over the last few months, and now particularly with the Senate having the chair of the key committee with respect to this issue so heavily involved -- and I'm going to be backing her up, so we will be completely bipartisan on the floor. We are hopeful that this way we can show the American people that we are really squeezing to get every single bit of value out of these tax dollars. And I'm telling you, I was home -- I am sure Senator Collins was home just recently. I mean, $87 billion is an astounding, eye-popping sum of money, and we have got to make sure there is a new focus on accountability. That's what we will be trying to do in a bipartisan way next week.
By the way, because of Senator Collins's time schedule, give any softball questions to me -- any difficult ones for her. (Laughter.) I know she's got a plane.
Q (Off mike?) And the second question is Senator Lautenberg has asked to have hearings on your earlier no-bid contract, particularly the Halliburton one. (Off mike?)
SEN. COLLINS: Well, let me answer both of those questions. The first answer to your question is the restriction that we offered to the DOD bill only applied to money in that particular bill, so it would not reach the 87 billion that will be appropriated in the emergency supplemental. And that's why we need to come forward again.
In addition, we strengthened our amendment. This version is the first version where we require notification to Congress, and we both believe that that's a very important improvement that ensures effective oversight and more accountability.
As far as Senator Lautenberg's request, what we need is legislation. We don't need an endless round of hearings. We need to solve this problem. And the best way to solve this problem, to ensure that the taxpayer is getting the best value for the money spent, is by enacting our amendment.
SEN. WYDEN: I agree completely with Senator Collins' statement, and would only add that if you are talking about a contract that is in existence, and you are talking about new money, then the rules that we are talking about would apply. You know, we are talking about making sure that when there is new money involved that there is a new focus on accountability.
Q Do you agree that you don't need hearings on this?
SEN. WYDEN: I think that -- look, there are a variety of companies that have been involved -- some prominent, some not. I could tell you what my constituents are concerned about now is whether or not this enormous sum of money -- virtually unprecedented sum of money -- whether there is going to be an effort to establish tough controls. My mother always used to say, whenever there was a big sum of money involved, she would always say, "Ron, get out your sharp pencil." Well, that really hadn't been done in the past. So what I want to do, and there are a variety of reports and the like coming out -- I want to join Senator Collins in dealing with what I think is the priority I hear from my constituents, and that is to get on top of this $87 billion -- this huge sum of money that has the American people certainly questioning where it's going to go at a time when they can't afford schools and health services and the like. So that's going to be our focus on the floor of the Senate.
Q Can I ask you for a moment to focus on the $20.3 billion part of this? I think a lot of people think the military part is in like Flint, but that 20.3 billion -- and we have seen in the paper today that some of the details of that are emerging -- are you concerned that there is something in there that the American people are really going to raise an eyebrow about, or maybe put up a major fuss?
SEN. COLLINS: One of the reasons that I've been an advocate for taking the portion of the supplemental, which is about 15 billion that is for building the infrastructure in Iraq, and making it a long-term loan to the Iraqi people, is that I think the Iraqis themselves should be paying for many of the improvements that this bill would pay for. The American people are very generous, and we understand that Iraq cannot not afford on its own to build an infrastructure that it needs. But in the long term Iraq is going to be a prosperous country. It has the second largest oil reserves in the world. It is a country that prior to Saddam Hussein had a high per capita income.
What we need to do is to provide transitional help, so that the years of looting by Saddam Hussein can be corrected, and the economy can get back on its feet. But I continue to think that that should be in the form of a long-term loan and not an outright grant. And I think that solves many of the problems about what the money is being spent for.
Q Do you have any qualms about the way the Halliburton no-bid contract was worked out, especially now that the Congressional Research Service has said that the vice president does in fact have financial ties to Halliburton?
SEN. COLLINS: Are you directing that to me or to Senator Wyden? Well, you have really asked me two questions. Let me answer the last part of your question first. The General Accounting Office is doing an in-depth review of all of the contracts that have been awarded, and I support that review. The General Accounting Office is the right entity to take a look at whether or not competition was curtailed for good reasons or whether it was a mistake by the Department of Defense and the other contracting agencies. It's premature to reach a judgment on that until the GAO has concluded its work.
As far as the second issue you've raised with the vice president, I think the vice president can defend his own actions. But I would say that deferred comp programs, which are very common, ensure the payment regardless of how the underlying company is doing. I mean, if Halliburton were to go bankrupt today, the vice president would still receive the deferred comp, because it's a legal contract that is separate from whether the company does well or very badly. So I really view that issue as being a tempest in the teapot, and not really worthy of any concern.
SEN. WYDEN: I would only add that as we go to the floor we are going to try to stick to the record. I mean, for example, the record in and of itself makes it clear why the Collins-Wyden amendment is important. I mean, the inspector general, for example, of USAID raised questions about the process used to award the contracts for various activities in Iraq, and concluded the winner of the contract might have had an unfair advantage. And I think the way I'd sum it up -- I mean, I think if you look at the overall contracting process -- what's been going on at a time when the American people are being asked for this huge sum of money, is that the Iraqi contracting process looks like Dodge City before the marshals showed up. And what the two of us want to do on a bipartisan basis is to get the Senate to establish some order, and go back to the traditional principles of competition and openness. The laws that Senator Collins was involved in are good laws, and for reasons that are I guess ones we are going to debate in the political arena, we don't seem to be following them. We want to get back to them. We want to get back to the rules that promote openness and competition, unless somebody has got a darn good case to do otherwise. And that hasn't been what's happened. For five months, the two of us have gone to the floor and worked with our colleagues.
Q (Off mike)?
SEN. WYDEN: Don't get logical.
SEN. COLLINS: It is. It is.
Q (Off mike)?
SEN. COLLINS: The Competition and Contracting Act establishes a rule that agencies are supposed to use competitive bidding in awarding contracts. Now, there are exceptions to that rule, because there are times when for security reasons or because the service or goods are available from only one source, that competition may be curtailed, and both exceptions are laid out in the law.
The problem is that there is no oversight of agency decisions to use one of those exceptions. And what we want to put in place is a process by which when an agency curtails competition, citing one of the exceptions in the current law, there is a report to Congress, so that we can see if we agree with the judgment, so that the whole process is far more transparent than it is now.
There would also be a publication in the Federal Register of the agency's reasons for curtailing competition.
So what we are putting in is a justification, a disclosure, and accountability provisions that will ensure far better oversight of this process.
Q (Off mike) -- violated those rules in the case of the Halliburton contract?
SEN. COLLINS: The problem is we don't know, because we don't have the justification for why the competition was curtailed. That's why GAO is taking a look at these contracts, a study that we support. But that's why our focus is on closing the loophole in the law. We need to reform the laws so that we do know whether a contract is awarded on a sole-source basis in an appropriate manner or whether competition was curtailed without a good reason. But the rule should be, and is under the current law, that you are supposed to use competition. And the reasons for that are evident. It's because that's what gives the taxpayer the best bang for the buck.
I've got to go.
SEN. WYDEN: Yeah, I think we have to stick to it. At this point we'll have the staff available to you, we'll have more details for you in the next couple of days.
Q Is your amendment going to -- (off mike)?
SEN. COLLINS: I don't know. We have just started to talk to our colleagues about it. I certainly hope that it will have widespread support, and I suspect it will, but one never knows. Thank you.