Persian Gulf

The Department of Commerce's failure to meet the June 1992 reporting deadline on the extent of contracts awarded U.S. companies for rebuilding Kuwait was due to several factors. First, the President did not assign responsibility for the report until after it was due. Second, after Commerce prepared the report, it took several months to complete the interagency review process that, in turn, required Commerce to update the information, further delaying publication. According to the first Commerce report, the Kuwaiti government awarded U.S. business more than $2 billion in contracts in 1991--about half of all reconstruction business. The second report said that the U.S. share of reconstruction contracting through July 1992 topped $4 billion--also about half of reconstruction contracts. In preparing the reports, Commerce faced several constraints, including (1) incomplete information from the Kuwaiti government needed to identify the dollar values for contracts Kuwait awarded to foreign companies, (2) the reluctance of the U.S. and Kuwaiti private sectors to provide information, and (3) the lack of a central source for this information. Commerce was able to obtain more complete information from the Corps of Engineers. To meet the urgently needed emergency services and clean-up in Kuwait, the Corps awarded restoration contracts without using full and open competition. Also, the Kuwaiti government told the Corps to award several contracts to preferred firms. As a result, the Corps awarded about 87 percent of its prime contracts with less than full and open competition.

GAO found that: (1) Commerce did not meet the reporting deadline because the President did not assign responsibility for the report until after it was due, and it took several months to complete the interagency review process; (2) the government of Kuwait awarded U.S. businesses about 50 percent of the total reconstruction business; (3) Commerce had several problems preparing reports, which included incomplete information identifying the dollar values for contracts Kuwait awarded foreign companies, the reluctance of the U.S. and Kuwaiti private sectors to provide information, and the lack of a central source for this information; (4) the Army Corps of Engineers' contracts showed that U.S. prime contractors received 54 percent of the $312.9 million awarded by the Corps, as of April 30, 1992; and (5) the Corps of Engineers awarded restoration contracts without using full and open competition in order to meet the urgent requirements of the government of Kuwait to provide emergency services and cleanup.