Bidders for Iraq contracts face higher security bills

27 November 2003
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27 November 2003 | Simon Binns

Government procurement officials in the US may ask companies tendering for reconstruction projects in Iraq to pay for their own security.

By some estimates, the cost of rebuilding infrastructure and restoring essential services could reach $100 billion. The US government has seen costs climb as security deteriorates and money is lost through the theft of equipment and sabotage.

Some industry experts fear that any such plans would discourage companies from tendering for contracts, although others argue that it may lead to better risk assessment.

Colin Adams, chief executive of the British Consultants and Construction Bureau, told SM: "I think it will be a disincentive. Many of the companies working on US projects in Iraq see these contracts as a loss leader to re-establishing themselves in Iraq.

"The contracts in Iraq are not huge, and security considerations take a huge chunk out of them.

"In the future, British companies need to focus on projects coming out of the UN and the World Bank, but as this won't happen overnight, there is still a preoccupation with getting work from the US."

Harry Legg-Bourke, marketing director of Olive Group, which provides security, risk and defence consultancy services, said security has always been an issue and is becoming a more recognised part of the tender process.

"It should make a difference to the revenue of security companies, in that they will be able to better advise clients and provide improved preparation, planning and risk assessment.

"Security analysis firms will be able to add to their services by providing security advice - it should be an extension of services rather than escalation of fees."

However, it also means that there will be a limited number of companies able to carry out such security work, he added.

"Purchasers should always look for the more highly regarded companies who have been on the ground."

SMnov2003

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