Bechtel Wins Iraq Reconstruction Contract

The government on Thursday awarded a contract potentially worth up to $680 million to evaluate and repair Iraq's power, water and sewage systems to Bechtel Restoration of San Francisco.

The initial award by the U.S. Agency for International Development was for $34.6 million, although the contract could total $680 million over 18 months for the privately-held company.

The larger amount would be subject to congressional approval.

Several Democratic lawmakers have criticized the fast-track bidding process that allowed only a few experienced companies to submit proposals. The U.S. Agency for International Development has controlled the bidding, saying speed was essential to meet Iraq's pressing postwar needs.

Foreign companies have also complained that they cannot be prime contractors under USAID's Iraq program, although the agency has repeatedly said non-U.S. firms can be subcontractors.

"It is anticipated that Bechtel will work through subcontractors on a number of these tasks after identifying specific needs," USAID said Thursday in a statement.

The infrastructure work is the largest Iraq contract to be awarded by USAID so far. In addition to work on the utility systems, the contract also provides for rehabilitation or repair of airport facilities and dredging, repair and upgrading of the Umm Qasr seaport in cooperation with other contractors.

Bechtel also may have a role in repair and reconstruction of hospitals, schools, selected government ministry buildings, irrigation facilities and transportation links.

Sen. Ron Wyden of Oregon, one of the Democratic critics, said the contract showed that "a troubling pattern is beginning to emerge, as some of the most powerful business interests in the country continue to receive these huge contracts without ... open, transparent bidding."

Wyden and others are sponsoring a bill that would require a public explanation of contracts awarded under a limited bidding process.

The 105-year-old Bechtel helped build the Hoover Dam in the 1930s and 50 years later completed work on the Channel Tunnel linking England and France. The company has wide experience working overseas, with 47,000 employees on 900 projects in nearly 60 countries.

The San Francisco Chronicle reported in January that Bechtel and least one other U.S. company sold Iraq technology that helped build up its military in the 1980s. The story attributed the information to a German journalist with access to a document on Iraq weapons that was turned over to the United Nations.

Bechtel spokesman Jeff Berger said it was "absolutely false" that the company aided the Iraqi military. The company worked on two projects in Iraq in the 1980s: a hydroelectric dam and a petrochemical plant that was to make "garden variety" products including plastics and synthetic rubber, Berger said. The plant was still under construction when Bechtel's involvement ended.

Other companies invited to bid were Parsons Corp.; Fluor Corp.; Louis Berger Group Inc.; and Washington Group International Inc. A subsidiary of Halliburton Co., which was formerly run by Vice President Dick Cheney, was invited to bid but decided instead to seek work as a subcontractor.

The agency said Bechtel probably would hire subcontractors for many of the projects.

Reuters and the Associated Press contributed to this report.