(Off Camera) Our guest tonight is ANDREW
NATSIOS, administrator of the Agency for International Development, the
lead agency that is responsible for rebuilding the infrastructure of
Iraq. Mr. Natsios was manager of Boston's "Big Dig," the largest public
works project in American history. He is also a veteran of Desert Storm.
He joins us here in our Washington studios. First of all, let me say
that there is no evidence that anything illegal has been done or even
anything improper. The question is, was it smart to exclude all
Well, first, that's Federal law. Federal
statute requires that all Federal agencies only allow American companies
to bid under the Federal acquisition statute.
(Off Camera) Actually, obviously, I have to
defer to your expertise, but I'm not sure that that is true of all
Federal statutes. The Army Corps of Engineers is not required to, is it?
Well, I think it is, but they can waive it.
And I can waive it. And I did waive it in January for subcontracts. But
the problem is, when we started this process, it was January. The
President had not decide to go to war. If we had gone internationally to
a big bidding process, it would've sent a huge message the decision had
already been made when what we were doing was prudent contingency
planning for what might happen. There was some likelihood it would
happen, but a decision hadn't been made. So, we did do competition. It
was limited competition. It's a procedure, let me just say, it's a
procedure we used in Bosnia in the Clinton years, that's where we got
this from. It was done to speed up the reconstruction of Bosnia. We also
did it in Afghanistan and now we're doing for a third time in ten years
in Iraq. And no one raised complaints about this before, I might add.
(Off Camera) Well, it's a, I think you'll agree,
this is a much bigger project than any that's been talked about. Indeed,
I understand that more money is expected to be spent on this than was
spent on the entire Marshall Plan for the rebuilding of Europe after
World War II.
No, no. This doesn't even compare remotely
with the size of the Marshall Plan.
(Off Camera) The Marshall Plan was $97 billion.
This is 1.7 billion.
(Off Camera) All right, this is the first. I
mean, when you talk about 1.7, you're not suggesting that the rebuilding
of Iraq is gonna be done for $1.7 billion?
Well, in terms of the American taxpayers
contribution, I do, this is it for the US. The rest of the rebuilding of
Iraq will be done by other countries who have already made pledges,
Britain, Germany, Norway, Japan, Canada, and Iraqi oil revenues,
eventually in several years, when it's up and running and there's a new
government that's been democratically elected, will finish the job with
their own revenues. They're going to get in $20 billion a year in oil
revenues. But the American part of this will be 1.7 billion. We have no
plans for any further-on funding for this.
(Off Camera) Let me go back to a point you were
making a moment ago, namely, you can only really begin on this process
in January. The Army began planning for this war, in some detail, last
June, ten months ago. Why could you not on a contingency basis have
said, we don't know if we're going war, there's a possibility we'll be
going war, everyone's been thinking we'll be going to war for many
months now, put out the bids and get some competitive bidding going on a
global basis or even get some major competitive bidding here in the
United States. If it happens, it happens and we're ready. If it doesn't,
we don't have to go ahead with these projects.
Sure. We were plan on this last September
and we spent the fall working with other domestic Federal agencies and
the State Department and the Treasury Department and the National
Security Council and MOB on an interagency agreement as to who would do
that what. By October/November, that had been set. We began working on
the scopes of work which actually take a long time to write because
you're reconstructing large parts of a whole country, and by January
they were ready to be bid. And we got approval in January to go out and
do this truncated shorter process that takes about six weeks or two
months. So, the timing actually goes back to September, but you don't
just go out to bid, you have to have a document to bid.
(Off Camera) Gotcha. Why it was not more
competitive and why it ends up being cost plus, let's just take a quick
break and when we come back, perhaps you'll address those two questions.
Back in a moment. commercial break
(Off Camera) And we're back once again with
ANDREW NATSIOS, administrator for the Agency for International
Development. I want to be sure that I understood you correctly. You're
saying the, the top cost for the US taxpayer will be $1.7 billion. No
more than that?
For the reconstruction. And then there's 700
million in the supplemental budget for humanitarian relief, which we
don't competitively bid 'cause it's charities that get that money.
(Off Camera) I understand. But as far as
reconstruction goes, the American taxpayer will not be hit for more than
$1.7 billion no matter how long the process takes?
That is our plan and that is our intention.
And these figures, outlandish figures I've seen, I have to say, there's
a little bit of hoopla involved in this.
(Off Camera) If you were going do it again,
would you do it the same way? In other words, as I said at the outset,
nothing improper here, certainly nothing illegal here. But there is just
a sense that there was more secrecy than was perhaps necessary and that
you didn't, you didn't put it out to enough companies to get any really
competitive bidding going.
Well, actually, we did. This is 680 million,
the largest contract of the 1.7 billion is for reconstruction, physical
infrastructure. And the only kinds of companies that can manage that
kind of money over a year or two, that's the length of time they have to
complete these tasks, are only a few, a handful of companies in the
whole world have the capacity to spend that much money responsibly,
carefully, in a short period of time. And so, we went to the largest and
best construction and engineering companies in the country that have
experience. Bechtel, for example, has 1,000 employees in the Middle East
already. They're in Umm Qasr, we just awarded the contract last
Thursday, they're in the port right now, and they're putting dredging
equipment, it's on the way to begin dredging the port. We needed to move
quickly in order to get this work done. I might also add, this affects
people's lives. 100,000 Iraqi children died needlessly last year. Very
high child mortality rates, higher in Iraq than in India. The reason for
that is dirty water and very bad sewage treatment. Basically, the two
big rivers, the Tigris and Euphrates, are open sewers. And if we don't
repair that, we can't lower these terrible child mortality rates. So, I
think it's important that people understand the context we're working
in, that people's lives are at stake, this not just a little road repair
(Off Camera) You know better than most because
you were actively involved in the project, that Bechtel is under severe
examination. Indeed, criminal action is being considered against Bechtel
for their operations in the "Big Dig" in Boston. It is charged that they
had excessive charges of over a billion dollars here. Doesn't that give
you some pause in going to Bechtel? I realize they may be one of the
only ones in country who can do it, but surely there are one or two
Well, I ran the "Big Dig" after the scandals
took place and we fired my predecessor and the governor asked me to
clean up the mess. So, I'm very familiar with the project. Massachusetts
is a highly politicized atmosphere, and I'm not sure I'd believe all the
headlines in Massachusetts, in terms of what the reality was. But,
Bechtel did, in the final last best offer for these competitive bids,
seven companies, the biggest in the country, were asked to bid. They had
the highest quality rating, highest score, for the technical
requirements of the project and the lowest price. That is the ideal for
Federal contracting. We almost never get it that good, where we have the
highest score for the technical and engineering side of it and the
lowest price of the bids that were made.
(Off Camera) Explain how that works with the
lowest price because I don't quite understand, they couldn't make a bid
because they don't yet know what it's gonna cost, so how, are they gonna
be held to a particular sum here?
Oh, sure. That is what, what we do. . .
(Off Camera) If it's cost plus, in other words,
if they come back to you in another six months or in another year and
say, gee, you know, we gave you best estimate we could but here's what
it ended up costing and it ended up costing double what we said it was
Oh, no, no, we have, that's the amount of
money we have to spend. We're gonna do less if it costs more than that,
because we have an appropriation, we're gonna go within the limits of
(Off Camera) But what you are saying is, maybe,
maybe fewer tasks will be accomplished. The amount of money, however, is
gonna be the same?
That's correct. 1.7 billion is the limit on
reconstruction for Iraq. It's a large amount of money but, compared to
other emergencies around the world. But in terms of the amount of money
needed to reconstruct the country, it's a relatively small amount.
(Off Camera) Mr. Natsios, I thank you. It was
good of to you come back.
Thank you very much.
(Off Camera) I'll be back with tonight's status
report on Iraq.
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(Off Camera) American casualties, millions in
cash, and sticky fingers. All in our status report on Iraq for tonight.
Three US Marines were killed and seven injured today in a training
accident in southern Iraq. They had been firing a rocket-propelled
grenade launcher when it malfunctioned and exploded. Oil began flowing
through Iraqi pipelines for the first time since the war began, as
technicians try to restart production. American soldiers found more than
$100 million in cash, in boxes hidden in dog kennels in a wealthy
Baghdad neighborhood. And in a related story, four American soldiers are
now being investigated for trying to steal some of the hundreds of
millions of dollars that had previously been discovered in a number of
hiding places in Iraq's capital.
(CONTINUED) (Off Camera) That's our report for
tonight. I'm TED KOPPEL in Washington. For all of us here at ABC News,