Business
& Labor
KBR, Parsons Win Big Corps Contracts to Rebuild Iraq Oil Infrastructure
(enr.construction.com - 01/20/04)
By Tom
Ichniowski
In a move that has stirred further controversy,
the Army Corps of Engineers has awarded Halliburton Co.'s
KBR unit a contract valued at up to $1.2 billion to continue
rebuilding Iraq's damaged oil infrastructure. KBR's new contract,
announced Jan.16, encompasses southern Iraq. At the same time,
the Corps also awarded a contract valued at up to $800 million
for similar work in the northern part of the country to a
joint venture of Parsons Corp. and Worley Group of Australia.
The indefinite delivery-indefinite quantity
contracts are to be done on a cost-plus-award-fee basis. Carol
Sanders, a Corps spokesperson, said six companies had made
proposals for the contracts. She would not disclose the names
of the unsuccessful contenders, saying that federal acquisition
law "doesn't permit us to release that."
KBR has been working under a Corps contract
on Iraqi oil projects since March. Halliburton Chairman and
CEO Dave Lesar said, "This decision is an endorsement
of the courageous work being done by Halliburton's employees
in Iraq." KBR says that three of its employees and 25
contractors on the LOGCAP III project have been killed in
action and four KBR workers and 29 subcontractors have been
wounded in action.
"Of course, we believe the award
of this contract validates the decision of the Army Corps
of Engineers last year," Lesar added. The Corps said
the contract competition "was full and open in accordance
with the Federal Acquisition Regulation."
Jim McNulty, Parsons' chairman and CEO,
said, "We are committed to helping the Iraqi people rebuild
their infrastructure and improve their way of life in the
years to come." The company says it began working on
oil, water and transportation projects in the 1950s and continued
there through the mid-1980s.
KBR has drawn criticism for its handling
of one part of the job--providing fuel to Iraq from outside
the country. On Jan. 13, the Defense Contract Audit Agency
referred the KBR-Iraqi oil issue to the Dept. of Defense's
Inspector General, citing "a suspected irregularity"
it found during a routine audit of the contract.
After the second award, Rep. Henry Waxman
(D-Calif.), a leading critic of the KBR contract, issued a
statement, saying, "The decision to award another billion-dollar
contract to Halliburton is mind boggling." Waxman and
Rep. John Dingell (D-Mich.) have charged that KBR has been
overbilling the Dept. of Defense for the fuel it has been
importing from Kuwait. Halliburton, KBR's parent, has strongly
defended its work, saying in a Jan. 14 statement, "KBR
delivered fuel to Iraq at the best value, the best price and
the best terms."
On Jan. 14, two KBR subcontractor employees
were killed when their vehicle convoy was attacked by small
arms fire near Tikrit. One KBR employee was injured in the
same attack, according to a KBR statement. The wounded KBR
worker underwent surgery at a combat support hospital. The
three workers were on the company's team for the Army Materiel
Command's Logistics Civil Augmentation Program III, which
is separate from KBR's oil infrastructure contract.
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