Acknowledging “irregularities” in its contracting process, the U.S.-led occupation authority in Iraq on Friday canceled a $327 million deal to equip the Iraqi army. The contract had been awarded to a fledgling Virginia company with limited military-supply experience.
The U.S.-led Coalition Provisional Authority, which had previously suspended the deal with Nour USA, decided to toss out the contract. The authority will start from scratch in its effort to equip 40,000 Iraqi soldiers to eventually replace U.S. troops, possibly delaying the project by weeks.
A Nour official said the company had not been notified of the decision and could not comment. The company’s president is A. Huda Farouki, a Washington financier who is a friend of Ahmad Chalabi, the head of the Iraqi National Congress, a longtime Pentagon ally and a member of the Iraqi Governing Council.
The controversial contract was called into question after protests by several bidders who alleged that Nour could not deliver on its promises, and reports by the Los Angeles Times that cast doubt on Nour’s claims about its partners and advisers.
The recognition that mistakes were made on one of the largest and most high-profile contracts awarded to date by coalition officials also raised questions about the authority’s ability to manage the contracting process only weeks before the scheduled award of an additional $10 billion in contracts to rebuild Iraq’s infrastructure.
Speaking to reporters Friday, a senior U.S. Army official described an office in Baghdad that is overwhelmed by the task of sifting through complex bid proposals. The official said the office had a staff of only five people, who were issuing as many as 15 contracts a day.
The official said the Army was reassessing the coalition authority’s ability to award major contracts, though no other irregularities had been found.
“We frankly found some procedural irregularities in the contract filing and we are terminating” the contract, the Army official said.
In all, five U.S., Polish and Jordanian companies protested the bid award to Nour.
