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US: SF Firm Awarded Contract in Iraq

by David R. BakerSan Francisco Chronicle
March 12th, 2004

The Pentagon has begun doling out $5 billion in new contracts to rebuild Iraq, and a San Francisco firm partially owned by Sen. Dianne Feinstein's husband has landed some of the cash.

URS Corp. will oversee repairs to Iraq's communications system, hospitals and courthouses under contracts worth a total of $27.7 million. The contracts were awarded late Wednesday to a joint venture of URS and the Louis Berger Group of New Jersey.

URS and Berger won't make the repairs themselves. Rather, they'll serve as management, making sure the work runs smoothly and stays on budget. Other firms will do the actual labor.

The Pentagon also awarded the first two of 10 big construction contracts late Thursday, with eight more expected soon.

Orange County's Fluor Corp. and British construction firm Amec together won a $500 million contract for repairs to Iraq's rickety electrical system.

Washington Group International, based in Idaho, and Black & Veatch of Kansas will restore water supply systems, a job worth up to $600 million.

URS won't oversee those two contracts.

Both construction projects awarded Thursday will follow water and power repairs already made by San Francisco's Bechtel Corp., which holds Iraq reconstruction contracts worth almost $3 billion. A Bechtel spokeswoman said the company had not sought either contract awarded Thursday.

Coming in the midst of congressional criticism examining the first round of reconstruction work, the new awards did little to quell complaints that well-connected firms have received plum jobs.

A $43 million contract to oversee electrical repairs went to a joint venture that includes Parsons Brinkerhoff, which once employed the man now in charge of project management for the coalition running Iraq -- retired Navy Rear Admiral David Nash.

Feinstein's husband, Richard Blum, controls about 20 percent of URS shares through his investment firm, Blum Capital Partners. Although connected to the one of Washington's leading Democrats, the company has also donated more than $10,700 to President Bush's re-election campaign and $3,800 to Democratic candidates, according to Center for Responsive Politics.

A URS representative did not return calls for comment Thursday. A Pentagon spokesman, however, said that political connections were not part of any of contract awards, which were based instead on cost and the ability of each company to do the work.

"Politics is not an evaluation criterion," said Army Maj. Gary Tallman.

Feinstein spokesman Howard Gantman said the California Democrat was not involved in URS winning its contracts.

"Sen. Feinstein played no role in that," he said.

Much of URS' business is tied to military spending. A division of URS, for example, won a $163 million contract on Wednesday from the U.S. Navy for engineering services.

Many of the companies winning new work in Iraq are already there. Fluor, for example, started restoring electrical power in Baghdad in September. Before Thursday's award, the company had about $600 million in Iraq reconstruction jobs.

"Certainly, the past six months have allowed us to get a more intimate knowledge of the people and the resources that exist there and the challenges we face,'' said Fluor spokesman Jerry Holloway. "We'll be able to move more quickly on this than we would if we weren't coming in with that experience."



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