WASHINGTON, 18 January 2004 — The US military Friday awarded two contracts to restore Iraq’s oil infrastructure to pre-war levels, the larger, worth up to $1.2 billion, going to Halliburton subsidiary Kellogg Brown and Root (KBR).
The two-year contracts were awarded by the US Army Corps of Engineers, even as the Pentagon’s inspector-general was considering whether to launch an investigation into an earlier Iraq oil contract awarded to KBR. The Halliburton subsidiary was contracted to restore oil fields and installations in southern Iraq to pre-war levels under the contract awarded Friday, which had a minimum value of $500,000 and a maximum of $1.2 billion. A separate contract was awarded to Parsons Iraqi Joint Venture, which teams Texas-based Parsons with the Worley Group of Australia, for work in northern Iraq.
It also had a minimum value of $500,000 and a maximum of $800 million, reflecting the smaller size of Iraq’s northern oil fields. “The competition for the two contracts was full and open in accordance with the Federal Acquisition Regulations,” the Army Corps of Engineers said in a statement.
“This process provides for a fair and impartial evaluation of the offerers proposals. The contractors were selected on the basis of best value to the government and qualifications to do the work described in the solicitation.”
The contracts cover a full range of services — putting out oil fires; environmental cleanups; restoring installations to safe operating conditions; maintaining oil fields, pipelines and refineries; buying and importing fuel; distributing fuel inside Iraq, providing technical assistance.
They replace a contract awarded to KBR in March without competitive bidding to restore Iraq’s oil industry. That contract has come under scrutiny by Pentagon auditors, who earlier this week found “suspected irregularities” that warranted investigation and passed it to the Pentagon’s Inspector General Joseph Schmitz.
