Nearly 3,000 potential
subcontractors showed up at two recent meetings hosted by
Bechtel National Inc. on two continents to learn about construction
opportunities in Iraq. Bechtel, the prime contractor for the
$680-million Iraqi capital construction project, expects to
award most subcontracts by August, but competition will be
WAIT Potential subcontractors flock to Bechtel
meeting in Washington May 21. (Photo courtesy of U.S.
Agency for International Development)
As firms from all over the world
jockey for current subcontracts, and to get a foot in the
door for possible future work, reconstruction activities continue.
In a key step, the U.S. Agency for International Development
announced May 23 that the port at Umm Qasr had been transferred
from military to civilian administration. It is the first
such transfer for a reconstruction project in Iraq. Stevedoring
Services of America, the Seattle firm that won a USAID contract
to manage the port, says more than 3,520 local workers will
be employed as managers, heavy equipment operators and maintenance
workers. Bechtel is charged with rebuilding port administration
buildings, restoring utilities and dredging.
As USAID also announced that the
U.S. Army Corps of Engineers will serve as construction manager
for the Bechtel rebuilding contract, the contractor held the
first of three program supplier conferences, in Washington,
D.C. The May 21 meeting attracted more than 1,800 attendees.
The second meeting, May 23 in the London suburb of Hammersmith,
was equally crowded. A third session was slated for Kuwait
City on May 28. Corps officials say its role is to become
official on May 30.
Both Bechtel conferences attracted
representatives of construction contractors and equipment
suppliers, consultants, foreign governments and lawyers. Also
attending were design firms, transportation companies, claims
consultants, managers of foreign construction associations,
all manner of service providers and even a young information
technology specialist hoping to find a job in Iraq.
Potential bidders came to learn
about qualifications, financing and insurance needed to work
in the region. Attendees at both meetings were greeted with
the blunt truth: They must supply their own security and telecommunications,
as well as provide food and accommodations for their crews.
Safety concerns will also require employees to wear flak jackets
and Kevlar helmets.
Such hunger for work in Iraq may
be excessive, hints Tom Elkins, Bechtels acquisition
services manager. Kuwaits reconstruction effort a decade
ago was four times larger, but drew a tenth of the interest,
he recalls. Bechtel says 4,348 firms registered as potential
subcontractors on its Website as of May 16, a month after
the April 17 contract award. About 35% are based in the U.S.
and another 25% in the U.K. Bechtels designated supplier
portal Website for prospective suppliers and subcontractors
recorded some 87,000 visits in its first month. The "intense
interest will translate into intense competition," says
Bechtel officials expect that about
5,000 companies will meet prequalification requirements. That
list will be reduced to about 1,000 firms for project-specific
consideration. Once their financial information has been evaluated,
they will be invited to bid on specific subcontracts. "Only
responsive and responsible bids will be considered,"
says Elkins. All subcontracts will be awarded on a fast track,
and comply with U.S. government procurement rules.
About 90% of the work will be subcontracted,
says Clifford G. Mumm, Bechtels program manager for
the Iraq contract. Those subcontracts will not be large, he
says. Many will be for under $1 million and the largest will
be for about $30 million, he adds. Jobs are small because
work across the country is "very different in nature,"
explains Lindsey Holbrook, Bechtels London-based manager
of engieering. "It doesnt lend itself to large
contracts." Bechtel officials expect that roughly $600
million in subcontracts will be awarded by August.
Mumm also told potential subcontractors
that Iraqi labor will perform at least 98% of work. He urged
interested companies to make connections with Iraqi firms
because Bechtel would not make those introductions. Many western
and eastern European firms are already in Kuwait and Iraq,
making those connections, Mumm said. Bechtel expects to post
contact information for the Iraqi contractor association on
Typical subcontract work involves
activities such as patching bridge decks and replacing doors
in buildings, says Elkins. Airport rehabilitation focuses
on avionics equipment. The only substantial element of the
program will be renewing Iraqs high-voltage transmission
system. With subcontractors needing to be self-sufficient
and responsible for their own procurement and security, such
small foreign jobs would normally not attract major attention,
agree executives. But some firms see beyond this project,
knowing that it will take more time and money to rebuild the
countrys battered and neglected infrastructure.
For Japans Marubeni Europe
plc, rebuilding "is the entry" to Iraq, says Yoshio
Hiro, its London-based general manager. The firm wants to
return to work in the region but must still recoup payments
owed since the first Gulf War. Similarly, Black & Veatch
Consulting, Redhill, U.K., plans to resume its long connection
with Iraqs water sector. "We always had a very
good relationship with our clients," says James Wilson,
business development manager. Work now "seems to be very
bitty, but we are looking very much to the long term."
Some firms might bid contracts
at a loss just to a get a market toe-hold, suspects Haluk
Bilgi, executive vice president of Tepe Group, Ankara. Having
flown to London from Turkey, he was disappointed by the scale
of available work. Bilgi also worries that Bechtel will select
known partners rather than conduct a costly search through
long lists of new names. "It will not be equal,"
Other potential bidders see immediate
benefits. Small-sized rehabilitation seems tailored to Thermal
Energy Construction Ltd., Shardlow, U.K. Supplying specialist
crews to work on powerplant cooling equipment, "no job
is too small," says Peter Mason, its business development
manager. Chris McDonald, sales general manager at Mitsui Babcock
Ltd., Renfrew, Scotland, sees potential mainly in powerplant
rehabilitation. "The fact that lights stayed on during
the war means that powerplants are in reasonable shape,"
But Iraqi engineers in London complain
they feel ignored, mostly because the rebuilding program is
run under U.S. law and Arabic is not accepted for registration
on the Bechtel Website. "We want to be consulted,"
says Emad Al-Ebadi, who runs a small U.K. construction firm.
He claims to be among a network of hundreds of Iraqi professionals
in the U.K., linked with a similar group in Iraq, wanting
to help shape his countrys reconstruction.