This article originally appeared July 21, 2003

The McLean, Va.-based consulting group in late April looked to be the winner of a sole-source contract for the same work from the U.S. Agency for International Development. But USAID abruptly put the job out for competitive bidding after a consortium led by Booz Allen Hamilton, Deloitte & Touche and IBM Global Services complained to the agency and Congress that it had been shut out of the process. 

The complex job of reforming and restarting Iraq's economy has taken on urgency as U.S.-led occupation forces have become the focus of violent attacks and widespread resentment. The 21-day war has left most Iraqis jobless, reliant on savings, scavenging and small payments from the U.S.-led authority to civil servants.

BearingPoint will be responsible for creating Iraq's budget, writing business laws, setting up tax collection, laying out trade and custom rules.

It also is to:

• Privatize state-owned enterprises by auctioning them off or issuing Iraqis shares in the enterprises.
• Reopen banks and jump-start the private sector by making small loans of $100 to $10,000. (Bank of America, Citigroup and J.P. Morgan are expected to seek work as subcontractors to revive Iraq's banks.) 
• Wean Iraqis from the U.N. oil-for-food program, the main source of food for 60% of the population.
• Issue a new currency and set exchange rates. 

USAID spokeswoman Ellen Yount said Sunday that she could not confirm the agency's selection until a contract is signed, most likely today. But an official with the Booz Allen-led consortium said it was notified Friday that BearingPoint was the agency's choice. BearingPoint officials did not return calls Sunday.

USAID has not publicly disclosed the contract's size. One firm involved in bidding puts the value at $60 million to $200 million. The award runs for a year but can be renewed up to two years. BearingPoint's fixed fee is expected to be 6% to 10% of the value. 

Some firms specializing in economic restructuring for poor countries stayed out of the bidding, saying the country was too unstable to meet USAID's goals and ambitious timetable.

One contractor says his firm backed away because there were too many bosses -- USAID, Treasury, Defense, the Coalition Provisional Authority run by L. Paul Bremer, and Iraq's interim governing council. USAID's contract allows for flexibility, Yount said.

The agency has awarded eight contracts in Iraq, including a $680 million job to Bechtel for infrastructure repairs. The Bush administration has been criticized for limiting bids to pre-selected and, in some cases, politically connected companies.