Bechtel Awarded Contract for Iraq

The Washington Times (Washington, DC), January 7, 2004 | Go to article overview
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Bechtel Awarded Contract for Iraq

Byline: Jeffrey Sparshott, THE WASHINGTON TIMES

The Bush administration yesterday opened the spigot on $18.6 billion in U.S. reconstruction funds for Iraq, awarding San Francisco-based Bechtel National a contract worth up to $1.8 billion to rebuild the country's power grid, water system and other public works.

Congress last year approved the multibillion-dollar funding package for Iraq's stabilization and reconstruction. International donors have also pledged $13 billion to help Iraq, a country ravaged by years of neglect under Saddam Hussein and further battered by military invasion and subsequent looting.

Bechtel has been one of the biggest corporate winners as the U.S. government funds projects in Iraq. The firm last year won what was then the biggest U.S. Agency for International Development contract, originally worth up to $680 million and later expanded by up to $350 million.

The contracting process has come under severe criticism from some legislators and watchdog groups, who have complained of limited competition and potentially improper connections between companies that have won awards and the Bush administration. Bechtel has contributed heavily to Republican election campaigns, and top officials have ties to the Bush administration.

Another firm with administration ties, Houston-based Halliburton Co., also has come under scrutiny for contracts in Iraq. The Army Corps of Engineers awarded Halliburton subsidiary Kellogg, Brown & Root contracts worth $2.26 billion through mid-December to restart Iraqi oil production. Vice President Dick Cheney was Halliburton's chief executive before joining George W. Bush's campaign for the presidency.

Pentagon auditors have said KBR may have overcharged the Army by $67 million for fuel delivered to Iraq between April and October. The audit is continuing.

Companies contracting with USAID in Iraq have not been accused of any improprieties, though the bidding process has drawn complaints.

Bidding on the contract announced yesterday was open only to American firms. Bechtel submitted a bid together with Pasadena, Calif.-based Parsons Corp. to beat out two other rivals, USAID said.

USAID officials said the award was made strictly on merit.

"I don't see Bechtel as having any particular advantage or disadvantage," said Tim Beans, director of procurement for USAID.

The Pentagon yesterday also announced plans to open bidding on an additional 17 contracts worth $5 billion.

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