Rival Bechtel Beats Fluor in Iraq Again
By CHRIS CZIBORR
Chalk up another loss for Fluor Corp. in Iraq.
The Aliso Viejo engineering company learned last week it lost out on $1.8 billion in reconstruction work to San Francisco archrival Bechtel Group Inc.
The two-year pact, awarded by the U.S. Agency for International Development, is a follow-on award to the $1 billion of work Bechtel won last year. Bechtel will oversee work including electric, power, sewage, transportation and airport repairs, according to the deal.
Fluor spokesman Jerry Holloway said the loss wasn’t a total surprise, though it nevertheless stung.
“All competition for these contracts is among the few companies who are qualified to take on these large projects,we’re not surprised that Bechtel or the other major players are selected,” Holloway said. “On the other hand, we also feel we could’ve done the work as well, and with that comes a certain level of disappointment.”
USAID officials said the Bechtel bid won because it had the lowest cost and the highest score for the technical engineering aspects of the project among the three finalists. Boise, Idaho-based Washington Group International Inc. was the third bidder on the contract.
Agency officials said they gave high marks to Fluor’s bid.
“Fluor had a very competitive bid,” said USAID spokeswoman Portia Palmer. “They did a very, very good job.”
Bechtel teamed with Pasadena-based Parsons Corp. and Fairfax, Va.-based Horne Engineering Services for the winning bid. Parsons will focus on water and sewage, while Horne Engineering will be the project’s equipment buyer, according to Bechtel officials.
Fluor, meanwhile, partnered with Britain’s AMEC PLC for its bid.
Outside observers weren’t surprised Bechtel won the work.
“It’s not a surprise that Fluor didn’t get a contract,Bechtel already is working with USAID,” said a spokesman with a New York investment firm that follows Fluor shares. He didn’t want to be named for this story.
In some eyes, political connections have made Bechtel a particularly strong bidder for Iraq-related work.
The company counts several executives and directors, including George Schultz, with ties to the Bush administration. Bechtel has a team of lobbyists and spends about $300,000 a year on outside influence peddlers, according to a report in Forbes magazine last year.
Fluor has tried to counter with its own war chest. In the 2001-2002 congressional cycle, the company made $260,000 in political donations, according to company officials.
Up next for Fluor could be a bid for more than $5 billion worth of rebuilding work that was announced last week by the Pentagon. Fluor’s Holloway said the company is reviewing initial bid documents on the work. Holloway said it wasn’t clear when the winning bidder would be named.
“We believe based on the early information that was provided that we would be a good fit for some of those contracts,” Holloway said. Fluor again would bid in partnership with AMEC.
Separately, Fluor also is in the running for $2 billion worth of oil infrastructure upgrade work, which the U.S. Army Corps of Engineers said it would award by Saturday.
That work would replace controversial oil sector work given without a competitive bid process to Houston-based Halliburton Co.’s Kellogg Brown & Root International Inc. unit.
Fluor has 120 people in Iraq working on $102 million in electricity repair and restoration work for the Army Corps of Engineers. That contract was announced in October.
Under that contract, Fluor is handling rebuilding in central Iraq, which includes Baghdad. Washington Group is doing similar work on a separate contract for northern Iraq, with Framingham, Mass.-based Perini Corp. handling southern Iraq.
The limit on Fluor’s portion of this work has been set at $500 million. Fluor also is working on $13 million in work for the Army Corps on a number of smaller military logistical support tasks such as building and maintaining camps for troops.
