WASHINGTON, 10 August 2003 — US construction giant Bechtel Corp. said Friday it had withdrawn from bidding on an army contract to repair Iraq’s oil fields because the size of the job had shrunk.
Bechtel said the Army Corps of Engineers’ had accelerated the timetable for handing over control of the job to the Iraqi oil ministry, “effectively minimizing the scope of any new contracts.
“Given this plan, Bechtel has decided to focus our efforts on future opportunities with the ministry,” it said. Bechtel’s withdrawal appeared to be the latest sign of discontent over the contract, amid concerns that a subsidiary of Halliburton — Kellogg, Brown and Root (KBR) — may have an unfair advantage.
Vice President Dick Cheney was chairman of Halliburton from 1995 to 2000. The Army Corps of Engineers came under fire earlier this year for secretly granting the Iraqi oil firefighting and repair contract on March 8 to KBR without any bidding process.
After criticism, the Army Corps of Engineers said it would put the Iraq oil contract out to tender, with one contract for rebuilding the fields in the north of Iraq and another for the south.
Each contract would be worth a maximum $500 million, with no single firm allowed to take both jobs and bidding open to US and eligible foreign companies.
But a final work plan released to bidders last week shows the first two phases of the work must be completed by Dec. 31 this year, and the third by March 31. Final bids for the contract are not due until Aug. 14, and the award is only expected in mid-October.
A report in the New York Times quoted sources as saying competitors believed KBR was the only company able to achieve such speed because it was already on the ground in Iraq.