Army Contract Again Disputed

Times Staff Writer

The U.S. Army has, for the second time, awarded a contract to supply the Iraqi security forces to a consortium of companies with little arms experience and whose participants include a friend of controversial Iraqi official Ahmad Chalabi.

ANHAM, a joint venture based in Vienna, Va., was the winner of a $259-million contract to equip the new Iraqi army and security forces with guns, trucks and other equipment, it was announced late Tuesday.

The consortium includes many of the same companies as a group headed by Nour USA, whose contract to supply the Iraqi forces was canceled this year amid protests from competing firms and confusion surrounding the bidding procedures.


“Nour and ANHAM Joint Venture are proud of our original and subsequent proposals to equip the Iraqi army,” Robert Hoopes, an ANHAM spokesman, said in a statement. “We are very pleased to have been selected for this effort, and we look forward to getting to work to deliver the best quality and value to the Iraqi army and the American taxpayer.”

Army spokeswoman Jan Finegan identified one of ANHAM’s component companies as HAIFinance, founded in part by A. Huda Farouk. Another is American International Services, of which Farouki is part-owner. Both were part of the Nour USA consortium.

Farouki is a Washington financier and political donor whose friendship with Chalabi, now a member of the Iraqi Governing Council, dates back more than a decade. Chalabi’s Petra Bank helped rescue Farouki from bankruptcy with a series of favorable loans in the 1980s. Chalabi’s Baghdad headquarters was raided by Iraqi security forces last week, and he was accused of spying for Iran, an allegation he denies. Another company in the joint venture, Finegan said, is the Munir Sukhtian Group, a Jordanian conglomerate active throughout the Middle East that was also part of the previous consortium.

ANHAM’s fourth company was identified as ASTRA, the Arab Supply and Trading Co., based in Riyadh, Saudi Arabia. ASTRA, the second-largest privately owned company in Saudi Arabia, was founded by Sabih Masri, a Palestinian businessman, according to its website. ASTRA was not listed as a participating member in the Nour USA bid.

Competitors said late Tuesday that they were considering filing another round of protests over the award to ANHAM.

Several U.S. firms as well as companies from U.S. coalition partners had participated in the bidding, including General Dynamics, ITT, Raytheon, Lockheed Martin, the Polish state arms company Bumar and a Spanish consortium, said one source who had reviewed documents related to the bidding.


Controversy erupted over Nour’s first winning bid of $327 million. It was unclear how the company was able to undercut its price in winning the new award for $259 million.

“We were shocked,” said one competitor, who did not want his name used because his firm had not yet decided whether to file a protest. “We’re puzzled at how they can develop a price like this.”

Army officials in charge of the contracting process could not be reached for comment late Tuesday.

After several companies filed formal protests over the Nour award, the Army determined that the language in its bid documents was confusing. The award was canceled and a new solicitation issued.

The confusion prompted sharp criticism from U.S. military commanders and members of Congress, who said the resulting delays endangered Iraqi and American lives by holding up the delivery of equipment needed for the new Iraqi army and civil defense forces.