Rebuilding Iraq

Deleted from the $87 billion Iraq/Afghanistan emergency spending bill President George W. Bush signed into law in November 2003 was a small business subcontracting provision that would have instructed large corporations receiving Iraq reconstruction contracts to create a subcontracting plan showing how they’d make opportunities available to small U.S. businesses.

Rep. Nydia M. Velázquez (D-N.Y.), the ranking Democratic member of the House Committee on Small Business, had introduced this provision, which was eliminated from the final package by the Republican leadership.

Current law requires large corporations to have a subcontracting plan for federal contracts performed inside the U.S. The Velázquez provision would have extended these requirements to Iraq reconstruction projects. Will prime contractors voluntarily engage small U.S. businesses in Iraq?

Velázquez says that unless they are required to work with American small businesses, it is very unlikely that they will do so: “If the U.S. government is unable to meet its small business prime contracting goals mandated by law, the chances of them subcontracting with small businesses voluntarily are practically slim to none.”

Prime contractors started reaching out to small business subcontractors in December 2003, during the second phase of Iraq reconstruction procurement, according to Rep. Donald Manzullo (R-Ill.), chairman of the House Committee on Small Business.

The second phase of Iraq reconstruction contracting features at least one carrot for small business. “The USAID (United States Agency for International Development), to get their prime contractors to use U.S. firms, are giving up to a million dollars in incentives for each prime contractor that subcontracts more than 10% to U.S. small businesses,” says Manzullo.

For information on related contracts awarded by government agencies, try the following resources on the Web:

A list of companies awarded contracts in Iraq (some of which seek subcontractors) by USAID can be obtained at iraq/activities.html.

USAID’s resources on commercial opportunities related to the Iraq reconstruction is available at resources.html.

The Iraq Investment and Reconstruction Task Force ( helps U.S. companies participate in the economic rebuilding of Iraq.

For news on the Afghanistan reconstruction, go to the U.S. Department of Commerce Afghanistan Investment and Reconstruction Task Force site: