WASHINGTON — The award of a major contract to equip the new Iraqi army has triggered an uproar in staunch U.S. allies Poland and Spain, where officials are questioning why their nations' experienced arms firms lost out to an American company with little history in such projects.
The $327-million contract to supply everything from canteens to AK-47s was awarded in January to Nour USA, a Virginia-based company whose president is A. Huda Farouki. Farouki is a close friend of Ahmad Chalabi, a controversial member of the U.S.-appointed Iraqi Governing Council who has close ties with some Pentagon officials.
The winning bid was so much lower than those by the Polish and Spanish firms -- both for more than $500 million -- that officials from the two nations have questioned Nour USA's ability to make good on the contract. Nour USA, formed in May, has no experience in supplying weapons, although it has supplied vehicles and communications equipment in Iraq.
"In this business, sometimes you win and sometimes you lose, but not by such a huge difference," said Andrzej Spis, deputy chairman of Bumar Group, Poland's state-owned military company whose $558-million bid was not accepted. Bumar has asked the U.S.-led Coalition Provisional Authority for an explanation of why it lost the bid, and board members are debating whether to file a formal protest.
Spanish officials were similarly stunned by the rejection of their bid. In an interview with local media, Spain's secretary of state for defense, Fernando Diez Moreno, called the loss "incomprehensible."
"There is a lot of bad feeling," a Spanish government spokesman said.
But Farouki, of Nour USA, said Poland and Spain are just upset that, in spite of contributing soldiers and other resources to the U.S.-led occupation of Iraq, they didn't win the contract.
"These are sour grapes," said Farouki, a politically connected Washington financier. "They bid $200 or $300 million too much and they're upset. They had a sense of entitlement."
In making its successful bid, Nour USA enlisted several Polish and Iraqi partners. The Polish government has launched three investigations related to the award. One of them concerns Ostrowski Arms, part of the Nour USA consortium. Polish prosecutors are looking into whether Ostrowski may have violated any laws. Its owner, Andrzej Ostrowski, has no license to export arms.
