DoD Mission for
Repair and Continuity of Operations
Of the Iraqi Oil Infrastructure

- The U.S. considered such contingency planning necessary because of Saddam Hussein's actions in Kuwait in 1991, when Iraqi forces damaged 750 wells. That destruction resulted in an environmental disaster as well as a tremendous blow to Kuwait's oil production capability. The U.S. had grounds to believe Saddam was planning to destroy Iraq's own oil infrastructure in the event of hostilities. Such destruction, especially if it extended beyond oil wells to pipelines, pumping stations, or other elements of the infrastructure, could have drastically reduced the Iraqi oil industry's capability to produce income on which the Iraqi people depend. Destruction of the oil fields would result in potential loss of $20 to $30 billion a year in oil revenues for Iraq, as well as an estimated cost of between $30 and $40 billion to recreate the infrastructure.

- When the war began, some wells were sabotaged and set ablaze by Saddam Hussein's forces, but coalition forces were successful in securing most oil fields and infrastructure before major damage could occur. The Department put its planning to use immediately, and the well fires were extinguished and the associated environmental damage was limited. The results of ongoing assessments of the condition of oil facilities throughout the country will determine what actions need to be taken to repair and restore the oil infrastructure. These activities may include extinguishing oil fires; assessing the condition of oil-related infrastructure; cleaning up oil spills or other environmental damage at oil facilities; engineering design and repair or reconstruction of damaged infrastructure; assisting in making facilities operational; distribution of petroleum products; and assisting the Iraqis in resuming Iraqi oil company operations.

- The Army Field Support Command also issued a letter contract to the planning contractor, BRS, that was primarily for pre-positioning of fire fighting equipment and the staffing and training of damage assessment teams that could be ready to deploy on short notice. This effort was necessary to enable rapid response to oil well fires. The estimated cost plus fixed fee of this contract is $37.5 million.

*The government contracted with BRS to perform the planning effort because BRS is the Army's contractor for the Logistics Civil Augmentation Program (LOGCAP). The LOGCAP contract is used to develop plans to address such requirements of Combatant Commanders. When a specific plan is needed, a task order is issued under the contract. The current LOGCAP contract was awarded to BRS on December 14, 2001, after a competitive source selection process. This is the third LOGCAP contract in a series of LOGCAP contracts that have provided capability to support global contingencies since 1992. The first LOGCAP contract was held by BRS from 1992-1996. The second LOGCAP contract was awarded after competition to DynCorp from 1997-2002. The latest competition resulted in the December 2001 award of the third LOGCAP to BRS.

- To carry out this mission, the Corps of Engineers will rely in large part on contractors with the needed expertise and specialized resources. In this initial phase, the prime contractor involved, Brown & Root Services, of Houston, TX, (a division of Kellogg, Brown & Root (KBR)) is the contractor that developed the contingency plans for the government. Only the contractor that developed these complex plans could commence implementing them on extremely short notice.

- Given this reality, the Corps of Engineers put in place a "bridge" contract with Brown & Root, which is being used for an interim period as a bridge to competition. The contract with Brown & Root is an Indefinite Delivery/Indefinite Quantity (ID/IQ) contract that enables the government to immediately obtain, through the placement of task orders, the specific services it needs to execute contingency plans. The Corps of Engineers will limit orders under this contract to only those services necessary to support the mission in the near term.

- The total value of the "bridge" contract with Brown & Root will be the sum of the values of the orders placed under it. Thankfully, there was relatively little damage resulting from sabotage and hostilities, but years of neglect and post-hostility looting have taken a toll. Specialized teams are assessing the condition of oil facilities; to date, assessments are completed or have been undertaken on roughly 25 percent of the Southern oil field infrastructure. It is not yet possible to predict how much of what kind of work will be required in the near term to enable operation of the infrastructure such that Iraq's needs are met. (For example, a near-term need is for the infrastructure to be able to satisfy domestic demand for fuel products such as propane for cooking and diesel fuel for running generators. This alone requires the infrastructure to produce oil, have it flow to refineries, have refineries operate, and have the country's internal fuel distribution process work.) As of May 6, 2003, five orders have been placed totaling $76.8 million. Under these orders, the contractor has been required to first, before hostilities began, mobilize fire fighting, damage assessment and oil spill assessment and response teams to train and rehearse safe shut-down procedures with military maneuver elements, and design long lead time equipment. After the beginning of hostilities, the contractor was tasked to extinguish fires, respond to oil spills, assess damage, perform emergency repairs, and provide life support facilities and services to contractor and government employees working on the project.

- The government's strategy has been to compete the execution effort at the earliest reasonable opportunity consistent with the needs of the mission. The government will solicit competitive proposals to provide the broad range of services that may need to be performed to support this mission in the months ahead. The contracts awarded as a result of this competition will replace the "bridge" contract now in place with BRS. It is anticipated that multiple contracts will be awarded.

- The fact that the Department was planning for the possibility that it would need to repair and provide for continuity of operations of the Iraqi oil infrastructure was classified until March 2003. This prevented earlier acknowledgement or announcement of potential requirements to the business community.

o Any future synopses and solicitations will be posted by the United States Army Corps of Engineers (USACE), Southwestern Division (SWD), at the Federal Business Opportunities website: http://www.fedbizopps.gov

o The Point of Contact (POC) in SWD is the Director of Contracting at 214-767-2476.

o Information about this mission is available at the Corps of Engineers website: http://www.usace.army.mil

o Information about subcontracting opportunities with the current prime contractor (BRS) can be obtained by contacting the contractor's point of contact at this e-mail address: dwayne.bourque@halliburton.com

- For information about Iraq reconstruction efforts other than the DoD mission to repair and provide for continuity of operations of the oil infrastructure, the following sources are available:

o http://www.usaid.gov/iraq/about_reconstruction.html has information regarding the activities managed by the U.S. Agency for International Development. These include contracts awarded or pending for a variety of requirements including capital construction, airport administration, theater logistical support, etc. The USAID mission encompasses a broad range of reconstruction efforts involving the country's power grid, ports, roads, bridges, schools, and health care facilities, etc.

o The Department of Commerce's Iraq and Afghanistan Reconstruction Task Force may be able to provide guidance on business opportunities. Information may be obtained at www.commerce.gov or www.export.gov or by calling 202-482-3011.