IRAQ: US Ruling to Usher More Private Contractors into Iraq

When U.S. troops cut their numbers in Iraq, Washington-area companies hope to expand theirs in jobs critical to that country's future. Thanks to a recent ruling in a protest of a military contract, that wish is getting closer to reality.

Reston company SOS International won a protest of $46.2 million in sole-source Air Force contracts that another company had received to provide advisers to top Iraqi officials. The work will open to bids from SOS and other local firms.

The decision -- which reinforces the concept of competitive bidding, even for critical work in Iraq -- is important because the Defense Department expects to increasingly rely on contractors to advise Iraqi officials and train Iraqi security forces as U.S. troops are drawn down.

"What does that mean for local businesses? It's going to obviously expand their revenue," says Ray Bjorklund, senior vice president of McLean-based research firm Federal Sources.

More work could be in store for defense contractors such as Reston-based L-3 Titan Group and Arlington-based CACI International, for McLean-based consulting firm BearingPoint, which works in developing countries, and for small businesses with language and cultural expertise such as Rockville-based AllWorld Language Consultants.

L-3 Titan and AllWorld Language Consultants didn't return calls. CACI and BearingPoint wouldn't comment.

Awards for work with Iraq's new government already have gone to some local companies.

Greenbelt-based ASRC Airfield and Range Services won a $65 million contract in 2004 to build an academy for Iraqi forces and to train Iraqi security personnel. It won a $19 million contract the same year to train security forces for the Iraqi Ministry of Electricity. The company got a $27 million contract in July to support operations at a U.S. base in Iraq.

"Contractors have been taking an increasingly greater role all along," says Senior Vice President Mark Mueller. "Is there additional potential for contract work? Certainly there is in nation building."

The SOS International protest challenged sole-source contracts awarded to New York-based Operational Support Services in December 2004 to provide 50 advisers for Iraqi officials for one year and in July 2005 to provide 200 advisers through next July.

The Government Accountability Office ruled that the Air Force improperly issued the awards even though it was trying to ensure the contracts were in place as quickly as possible. The GAO said a competitive bidding process for the work should begin quickly to replace the second contract. The first contract expired last week.

The Air Force says it will decide by Jan. 18 how to comply with the GAO decision.

"They're going to find some other companies that have these resources, and they're going to have to recompete it on a fairly fast track," says Bill Walsh, a government contracts lawyer with law firm Venable.

SOS International (www.sosiltd.com) has 350 employees, including 35 in Reston, 190 in Iraq and others at Guantanamo Bay in Cuba and Afghanistan. The company says it expects its work in Iraq to increase.

"The future is going to be more of this kind of support if all goes as people hope and we start seeing light at the end of the tunnel in 2006," says Vice President of Finance Bruce Crowell.

Joining SOS International in its protest was Rumford, Maine-based WorldWide Language Resources. Both companies say they will bid on the contract if it is recompeted, as does Operational Support Services.