WASHINGTON – Trying to ensure competition on future Iraq contracts, U.S. Sen. Susan Collins of Maine and a colleague proposed Friday that an $87 billion spending bill include restrictions on limited or sole-source bidding.

The proposal would require that funds for Iraq only be spent on competitive contracts, unless the awarding agency notified Congress and explained – in the official Federal Register – why full competition was rejected.

Republican Collins and Democratic Sen. Ron Wyden of Oregon were responding to allegations of favoritism in Iraq contracts awarded so far.

The KBR subsidiary of Halliburton, the company formerly run by Vice President Dick Cheney, has taken the brunt of the criticism. The U.S. Army Corps of Engineers has increased KBR’s noncompetitive work to restore Iraq’s oil industry.

After several delays, the Corps is now reviewing bids for a replacement contract that could be awarded next month. KBR has received $1.2 billion in work so far.

Cheney continues to receive deferred payments from Halliburton, but says he severed all ties before taking office and had nothing to do with the oil restoration contract.

In addition to the Corps contract, the U.S. Agency for International Development has awarded Iraq reconstruction work only to firms that were invited to participate in a limited competition. The largest contract, for major construction, went to Bechtel at a cost that could reach $680 million by the end of next year.

USAID officials said they couldn’t use full competitive bidding in the initial Iraq contracts, because they had to quickly find companies with special expertise and security clearances.

The Collins-Wyden amendment would affect only future contracts. Collins, chairwoman of the Senate Governmental Affairs Committee, said the disclosure provisions would allow Congress to vigorously review contracts awarded after limited competition or no competition.

However, she rejected requests from some Democrats for hearings, saying, “What we need is legislation. We don’t need an endless round of hearings.”

Wyden said the contracting method used so far “doesn’t pass the smell test. Before $87 billion is shoveled out the door, let us take steps on a bipartisan basis to restrict the funds, to make sure there’s open contracting and disclosure.”