After more than a month's delay, the Pentagon-run Program Management Office kicked off bidding by issuing solicitations overnight for 17 major construction contracts and project management deals to oversee the work.
The Pentagon promised open competition for the deals, but the bidding for prime contracts excludes companies from nations that did not support the US decision to invade Iraq without UN approval, including France, Russia, Germany and Canada.
The United States has drawn up a list of 63 eligible countries but says the list could be revised and other nations included. Sub-contracts will be open to all nations.
The 10 prime construction contracts put on government Web sites overnight (www.fedbizopps.gov) cover work in five sectors: electricity, water, security and justice, transportation and communications and buildings and health.
Retired Adm. David Nash, who is in charge of the Programme Management Office, told reporters late on Tuesday bids were due in 30 days and he expected the work to be awarded by early March, a month later than initially expected. A pre-proposal conference will take place later this month.
Officials said the delay was caused largely by the decision to bring forward the hand-over from the United States to the Iraqi authorities by the end of June, which meant that some contracts had to be reworked.
"With the transition on 1 July, we wanted to make sure that we had this correct before we moved forward because this is a lot of money. And so we've been carefully going over all the aspects of it to make sure we get it right," said Nash.
Bidding documents laid down ground rules for involvement in Iraq and stressed that corruption would not be tolerated.
"Transactions relating to the expenditure of public funds require the highest degree of public trust and an impeccable standard of conduct by contractors, sub-contractors and any other agent," the documents said.
Of the $18.6 billion appropriated by Congress, another $6 billion will be rolled out later for non-construction work and about $4 billion will be held back in reserve.
Of the other congressional funds, $2 billion will go into repairing the oil sector via two contracts to replace a no-bid deal given last March to Halliburton, the oil company once run by Vice President Dick Cheney. Those are set to be announced before January 17 by the US Army Corps of Engineers.
On Tuesday, the US Agency for International Development awarded a $1.8 billion contract to San Francisco engineering company Bechtel for infrastructure work. This money comes out of the $18.6 billion.
It was the second major contract given to Bechtel, which has clocked up just over $1 billion in its first infrastructure deal awarded in April.
Winning firms have been urged to make maximum use of the Iraqi work force.