- The Washington Times - Friday, April 18, 2003

Bechtel Corp. yesterday won a U.S. government contract to repair Iraq's power, water and sewer systems, a deal that will pay as much as $680 million to the San Francisco-based firm.

The U.S. Agency for International Development announced the award for emergency capital construction, one of eight Iraqi reconstruction contracts that could total as much as $1.7 billion for U.S.-based companies.

"The capital construction contract is part of U.S. AID's planned reconstruction assistance to the Iraqi people, aimed at helping maintain stability, ensure the delivery of essential services, and facilitate economic recovery," the agency said in a statement announcing the award.

The contract calls for Bechtel, a privately owned engineering and construction firm, to assess and repair power-generation facilities, electrical grids, municipal water systems and sewage systems, USAID said.

The firm also may repair airports and the Umm Qasr seaport, reconstruct hospitals, schools, some government buildings and major irrigation structures, and restore transport links, USAID said.

The capital-construction award is the fifth and biggest of the eight contracts announced by USAID.

"We will now begin meeting with USAID to start detailed planning on this important effort," said Tom Hash, president of Bechtel National, part of the Bechtel Group.

The initial award to Bechtel is $34.6 million but, pending availability of funding, the contract provides up to $680 million over 18 months, USAID said.

Bechtel is a family owned firm with about 47,000 employees. The company's Web site said it booked $12.7 billion in new business and worked off $11.6 billion in revenue during 2002.

The company has worked on massive construction projects around the world, including San Francisco's Bay Area Rapid Transit, the Channel Tunnel between England and France, and the Hoover Dam.

Bechtel also worked on restoring oil production in Kuwait after the 1991 Persian Gulf war.

While all companies bidding on the USAID contracts have to be U.S. firms or U.S.-based subsidiaries of foreign firms, subcontracting work is open to all qualified bidders.

USAID said that it expects Bechtel will work through subcontractors on several tasks in the contract.

The contracting process has come under criticism because USAID sought bids from a limited number of firms, and because some of those firms have apparent ties to the Bush administration.

George P. Shultz, secretary of state during Ronald Reagan's presidency, sits on Bechtel's board.

Bechtel Group made almost $1.3 million in political contributions from 1999-2002 election cycle, with 59 percent going to Republicans and 41 percent to Democrats, said the Center for Responsive Politics, a nonprofit research group based in Washington.

Other firms invited to bid on the USAID contracts include Fluor Corp.; Kellogg, Brown & Root, a subsidiary of Halliburton Co.; Louis Berger Group Inc.; Parsons Corp.; and Washington Group International Inc., press reports said.

Of the eight major USAID contracts, five have been announced.

One winner, Stevedoring Services of America, made $23,825 in political contributions, with 80 percent going to Republicans. The other three winners have made political contributions ranging from $2,000 to $3,800 entirely or mostly to Democrats, the center said.

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