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IRAQ: Contractors Are Bidding Amid Increasing Attacks

Some 50 Iraqi contractors listened recently at a Sunday bid meeting to Kellogg, Brown & Root project manager Glenn Powell via a translator. To get there, they had passed through four U.S. military checkpoints along a quarter-mile stretch through a heavily fortified Baghdad “green zone” for foreigners doing business in Iraq.

by Beth PotterMcGraw Hill Construction
July 26th, 2004

Some 50 Iraqi contractors listened recently at a Sunday bid meeting to Kellogg, Brown & Root project manager Glenn Powell via a translator. To get there, they had passed through four U.S. military checkpoints along a quarter-mile stretch through a heavily fortified Baghdad “green zone” for foreigners doing business in Iraq.

“My boss sends me here because it’s the only way to get business from the Americans,” said Abeer al-Mosawi, engineer with materials and electrical firm Rusafina General Contracting Co.

KBR doesn’t publicize the bid winners because Iraqi firms are worried that they may be targeted by insurgents, says spokesperson Megan Mason. “People don’t want others to know that they’re working with Americans.”

This typifies how the Houston-based Halliburton subsidiary does much of its Iraq business these days, as it doles out everything from multimillion-dollar building renovation contracts to $500 cleaning supply contracts for the massive palace used by U.S. Embassy officials.

Danger is part of the cost of doing business in post-war Iraq, says Mazin Gltanim, an engineer with al-Muatamada Co. for General Contracting. His firm has done building work in Baghdad, where guards have not been necessary. But his firm has not worked at Abu Gahraib prison or other high-risk locations seen as a place where even Iraqis need security guards with guns.

“Our company doesn’t need guns, but if we take on work in a place like Abu Gahraib, we will hire security guards,” Gltanim says. “We will charge more, of course, if this happens.”

Gltanim says his firm got work with KBR through the Union of Engineers, a local trade union that spread word of the Sunday bid contract meetings.

One worker at a firm with a $2-million, six-month contract under KBR to provide bottled water to foreign workers and U.S. troops says several truck drivers came under insurgent attacks and consequently were promised doubled salaries. “The first six months, nothing bad happened to us, but after fighting happened in Fallujah, we lost four of our trucks to thieves,” the worker says.

KBR declined to pay for security to protect the trucks, so the firm has hired one car with four armed guards to ride alongside every truck, spending half its profit from the contract, the worker says.

Companies are getting paid well for what they do, says Francis Canavan, spokesman for Bechtel, San Francisco. Bechtel currently has subcontracts with 119 Iraqi firms for 158 projects, he says.

“We have an ample supply of people we can work with,” Canavan said. “The security environment in the country is what it is. It has caused anxiety for people [but] we have security professionals assess it constantly.”

Arabic-speaking staff with Bechtel suggested contacting the Union of Engineers to publicize bids, says Canavan. “It’s gone very well. One of the first challenges was getting in touch with the contractor community and explaining to them how the bid process works.”

The killing of several high- and mid-level Iraqi officials in recent months has not deterred local contractors from contacting Bechtel, Canavan says.





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