Fluor Readies New Round of Bids for Work in Iraq
By CHRIS CZIBORR
Aliso Viejo-based Fluor Corp.’s bid writers have been busy putting the final touches on pitches for seven Iraq redevelopment contracts worth more than $4 billion.
The contracts, being handled by the Pentagon’s Program Management Office of the Coalition Provisional Authority, are set to be awarded March 4.
Fluor, an engineering and construction services company, is bidding with Britain’s AMEC PLC. Fluor is the majority shareholder of the joint venture with AMEC.
The effort is the latest in what has been a mixed bag for Fluor in Iraq.
The company has won contracts to do more than $500 million worth of rebuilding work there. It’s also lost out to rivals on several billion dollars of work in the biggest contracts awarded so far.
Fluor isn’t saying too much about its wins or bids for “competitive reasons,” according to spokesman Jerry Holloway. According to a Dow Jones report quoting AMEC, the venture’s latest submissions include:
n Two bids worth $1.5 billion for electrical power and transmission work.
n Two bids worth $1.7 billion for public works and water resources work.
n Two bids worth $400 million for transportation work.
n One bid worth $400 million for justice and security services.
Ken Smith, senior vice president of business development for Fluor’s government group, oversees a team of 15 people who work on bids out of Fluor’s offices in Arlington, Va.; Greenville, S.C.; and Richland, Wash.
The bid team includes people who used to do a lot of power plant work for the company’s former Duke/Fluor-Daniel venture before U.S. power work went away and Fluor dissolved the venture.
The Fluor-AMEC venture hasn’t fared so well winning Iraq bids, chalking up the following losses worth nearly $5 billion there:
n The venture endured two losses to Fluor’s archrival,San Francisco-based Bechtel Group Inc.,for general Iraq rebuilding work. Bechtel’s two wins are worth about $2.8 billion. For the most recent of the two contracts, worth $1.8 billion, Bechtel teamed with Pasadena-based Parsons Corp. and Fairfax, Va.-based Horne Engineering Services.
n Fluor-AMEC lost two big Iraq contracts totaling $2 billion to upgrade the country’s oil system. Houston-based Halliburton Co.’s Kellogg, Brown & Root unit won $1.2 billion of the work, while the team of Parsons and Australia’s Worley Group Ltd. won $800 million worth of work.
Smith said he doesn’t believe Fluor has been treated unfairly in the bidding thus far.
“The bidding process has been fair,” Smith said. “We’re disappointed we lost the Iraqi oil contracts, but we’ve been winning other contracts with the Army Corps of Engineers and the Air Force.”
Fluor, separate from AMEC, has managed to win more than $500 million in Iraq so far:
n Last week, Fluor won three task orders from the Army Corps of Engineers to do electricity restoration work throughout Iraq, worth a total of $154 million. The contract is part of a general $1.5 billion contract for potential U.S. Central Command work awarded last month and could be worth up to $500 million in its first year. It carries the prospect of up to four one-year extensions with a maximum value of $250 million apiece. Fluor officials expect the lion’s share of work under this contract will take place in Iraq and Afghanistan. AMEC officials said they expect their company will share some of this work with Fluor.
n Last year, Fluor won a separate Army Corps of Engineers task order to restore electricity in central Baghdad. Fluor officials said the value of that work is about $250 million so far and could increase to $500 million.
n Earlier this month, Fluor won a $100 million task order from the U.S. Air Force to build barracks outside Baghdad for the U.S. Army.
n Last month, Fluor learned it would be part of a $65 million task order headed by Long Beach-based Earth Tech Inc. to rebuild an abandoned Iraqi military base for Iraq’s new army.
n Fluor also is doing various other barracks-related work for the U.S. military worth several million dollars, according to company officials.
Fluor has been busy in the past year trying to make further inroads into the world of federal procurement contracts. Earlier this month a company subsidiary, Rolling Hills Estates-based Del-Jen Inc., bought Fullerton-based Trend Western for an undisclosed amount.
Trend Western, a provider of logistics and operations services to military bases in the U.S. and Guam, counts 800 workers.
Fluor officials said the combined business would provide “a full spectrum of support services to Defense Department’s military installations worldwide.”
Trend Western specializes in military base supply, fuels management, warehousing and transportation services.
Military base work can be lucrative. Of the reported $8 billion of potential work in Iraq Halliburton has snagged, it’s estimated that military support services work comprises roughly half of that amount.
Fluor bought Del-Jen a year ago for $50 million to boost the government side of its business. Del-Jen does military base upkeep, as well as training, for the Labor Department.
