Losers’ Protests Result in Halt to Iraq Contract

The Army said Thursday that it had halted work on a $327-million contract to equip the new Iraqi army after two losing bidders lodged formal protests against the deal.

The U.S.-led Coalition Provisional Authority in Iraq awarded the contract last month to a U.S. consortium led by Nour USA, a Virginia-based company that the protesters say does not have sufficient experience and offered an unrealistically low bid.

“The filing of the protests triggered an automatic stay of performance of the contract. Consequently, by a letter dated Feb. 20, the contracting officer issued a stop-work order to Nour,” said an Army spokesman, Maj. Gary Tallman.

The stop order follows controversy surrounding other U.S. government contracts in Iraq, with allegations ranging from corruption to overcharging for services and products.

The Iraq army contract covers items from military vehicles to assault rifles to basic equipment such as backpacks.

On its website, Nour is described as an international investment and development company. Its president, A. Huda Farouki, is a close friend of Ahmad Chalabi, a member of the Iraqi Governing Council.

The protests to the General Accounting Office, the investigative arm of Congress, were filed this month by Polish state-run arms trading company Bumar Group and another company, Cemex Global, backed by Jordan-based Shaheen Business & Investment Group.

A GAO recommendation is to be made by May 27.

Nour’s winning bid was met with an uproar in Poland, where companies had hoped to be rewarded for their support for the U.S.-led war in Iraq.

A lawyer for Nour declined to comment on the protests because the litigation was continuing.

Coalition officials have said Nour was chosen because it priced its offer at $327 million, compared with $560 million proposed by Bumar.