Iraq: Risky Business
Michael Fleischer, director of private sector development for the Coalition Provisional Authority (CPA), is well aware of the effect of violent images from Iraq flashing on TV screens. "One car bomb drowns out an entire booming economy," he says. "Small businesses could be taking more advantage of Iraq."
How many entrepreneurs share Fleischer's view is impossible to know. Those undaunted by security concerns can try going the official route, through government agencies, or can strike out on their own. Information, though, hasn't been easy to find.
The multinationals snagging much of the $18.4 billion in contracts the CPA is expected to award this year are required to use small companies for subcontracting. But the CPA's Program Management Office organized only two U.S. conferences for prime contractors to network with entrepreneurs. Many prime contractors are still in the planning stages. John Chisholm, subcontracting manager for Framingham (Mass.)-based Perini Corp., says 29 small companies have approached him about working in Iraq. Perini has a $500 million contract for electrical work, but Chisholm is still figuring out what help his company will need.
James Morrison, president of the Small Business Exporters Assn., says he has had about 50 inquiries about Iraq, many from frustrated small-business owners. "They've had a hard time reaching the right people at the CPA," Morrison says. A new Web site that lists prime contractors, www.iraqibusinesscenter.org, should help.
There's opportunity beyond the big contractors. The CPA's Fleischer says Iraq increasingly will need services and conveniences from auto repair shops to theaters, and U.S. companies could supply those businesses -- say, by providing machines or parts. Small businesses can contact local U.S. Export Assistance Centers or the Commerce Dept.'s Iraq site at www.export.gov/iraq.
Lyle Clemenson, the 69-year-old owner of 25-person Clemenson Enterprises in Brooklyn Park, Minn., plans to go to Iraq this summer. The Commerce Dept. gave him leads on oil refinery companies that may need PermaWrap, a fiberglass product his $3 million company sells to fix corroded or leaking pipes. "I'm not going casually," says Clemenson, who's trying to decide which areas are safest and concentrate his travel in those regions.
Gamal Osman, president and CEO of Tifa Ltd., scored a hefty deal without leaving his Millington (N.J.) office. His 25-person company supplied Iraq with defogging equipment used to combat disease-spreading insects until 1990, when U.N. sanctions against Iraq went into effect. Earlier this year, though, the Iraqi Ministry of Health contacted Tifa. The $3 million company landed a four-year, $15 million contract. "It's very important to be in touch with the Iraqi government," Osman says.
But Osman is waiting until security improves before he books a flight. For those going to Iraq, the CPA recommends private security firms. The cheapest charge from $300 a day for guards around a house to $5,000 a day for a convoy. Others ask as much as $12,000 daily for a driver and three guards. Sounds like only the flush -- and daring -- need apply.