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The start of ground
fighting in Iraq over the past week intensified the military's
infrastructure and logistical challenges and unleashed award
of a number of new support contracts. Activity also included
a Bush Administration request to Congress for $74.7 billion
to fight the war, provide humanitarian relief and combat terrorism
in the U.S. and abroad.
The "engineering demands are
astounding early on," in a military engagement, Army
Corps of Engineers Major General Hans Van Winkle told attendees
at the Associated General Contractors convention March 20
in Honolulu. The deputy Corps commander described the modern
battlefield as a "continuum." Changes in technology
have made rear areas as active as front lines, he added.
Construction activities include
contingency roads and airfields, base camp construction, baseline
environmental assessment, force protection engineering, assessment
and repair of bridges and utilities, and tactical military
hydrology. "You can live in the mud and dirt for a certain
amount of time, but then there are diminishing returns in
terms of health and effectiveness," said Van Winkle.
Rear Admiral Michael Johnson, commander
of the Naval Facilities Engineering Command, also told attendees
that Seabees are expediting projects such as a 22-acre parking
apron that involved placing 37,000 cu yd of concrete.
Fast tracking such work and responding
to war developments has already generated contracts to private-sector
firms, some controversial.
Kellogg Brown & Root, the construction
subsidiary of Dallas-based Halliburton Co., announced March
24 the award of a Corps of Engineers contract to assess and
extinguish oil well fires in Iraq and to repair damaged petroleum
infrastructure. KBR declined to disclose the contract's value
but says it is subcontracting firefighting work to Boots &
Coots International Well Control Inc. and Wild Well Control
Inc., both Houston-based.
In its announcement, KBR touted
expertise gained during the 1991 Gulf War. "Halliburton
crews brought 320 wells in Kuwait under control in less time
than was expected, and extinguished 90% of the blowouts within
one year of the beginning of operations," KBR said.
The contract has apparently raised
eyebrows among some officials of Bechtel Group Inc., which
had the program management contract from Kuwait Oil Co. to
control the oil well fires. Some questioned the dimensions
of Halliburton's role. The award also prompted industry speculation
as to political connections between Halliburton and the Administration.
Vice President Dick Cheney is a former company CEO, although
he has divested himself of company stock. While one construction
executive says the Corps' oil well award is "small,"
Bush's request to Congress includes as much as $500 million
to fight Iraqi oil fires.
KBR is reportedly also one of two
contractors chosen by the Defense Threat Reduction Agency
to receive major contracts for base operations-related work
in Iraq that may involve exposure to caches containing weapons
of mass destruction. Raytheon Corp. is the other. DTRA officials
declined comment on the awards or their values. The firms
are among five that have already been preselected by the agency
and then compete with each other for "task orders."
These usually range from $1 million to $15 million, but have
been as high as $50 million. The others are Washington Group
International, Fluor Corp. and Parsons Corp.
The U.S. Agency for International
Development also awarded on March 24 the first of eight construction-related
contracts in Iraq, a $4.8-million award to Stevedoring Services
of America, Seattle, for management activities at the port
of Umm Qasr. It will be responsible for port operation to
allow reconstruction materials, food and other relief supplies
to be delivered.
But more industry attention is
focused on USAID's pending award of a capital reconstruction
contract in Iraq that could total up to $600 million over
21 months. It was expected to be announced by March 28.
The contract will focus on preliminary
work, and more contracts are expected to be let as the full
extent of needed work becomes known. International banks,
donor countries and other organizations, including the United
Nations, are also expected to have a role.
There will be a lot of work to
be done, USAID Administrator Andrew Natsios said at a March
25 briefing. "Six hundred million dollars is not going
to rebuild the infrastructure of that country," much
of which was in a state of disrepair before the war, he said.
USAID is set to award the contract
to one of a handful of U.S. engineer-contractors that were
invited on Feb. 12 to respond to the agency's request for
proposals (ENR 3/17 p. 10). The firm selected will be prime
contractor for the initial contract, but as much of 50% of
the work will likely go to subcontractors. One source speculates
that USAID will have a more significant reconstruction presence
in Iraq, with the Corps having "a secondary role."
Neither Natsios nor the bidders
would discuss the status of the procurement, but sources told
ENR that some firms, including Washington Group International,
HDR Corp. and Fluor Corp. have already been eliminated. At
least one executive also speculated whether politics might
influence the possible selection of KBR and Bechtel Group
Inc.
The procurement puzzled some E&C
firms and led others to carefully weigh the potential impact
of Iraq involvement on clients and resources. "I didn't
feel comfortable with the compensation, with making commitments
on our resources," said one firm executive. "The
whole procurement process made us nervous. In some cases,
USAID couldn't answer basic questions." He also questioned
why only one prime contractor was being selected.
Bush's budget request, announced
March 24 and sent to Congress the following day, includes
$62.6 billion for the military effort, with $700 million to
repair Iraqi oil damage and for programs in Colombia and Afghanistan.
There also would be $200 million for other military construction.
The package includes $2.4 billion
for a new, flex-ible account focused on relief and reconstruction.
Combined with items in the $62.6-billion Dept. of Defense
portion of the plan, the total commitment for relief and reconstruction
would be about $3.5 billion, says the Office of Management
and Budget. The plan also contains $4.2 billion for homeland
defense, including $1.5 billion for the new Dept. of Homeland
Security.
House Appropriations Committee
Chairman C.W. (Bill) Young (R-Fla.) said he plans to move
Bush's request through the House quickly "and will resist
any efforts to add extraneous provisions." In the Senate,
Robert C. Byrd of West Virginia, the top Democrat on the Appropriations
Committee, said he supports funds for the military mission,
but "I am not for giving a blank check to this or any
other administration."
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