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Washington Group International wins contract to provide up to $500 million in services to build electrical infrastructure in Iraq

BOISE, Idaho, March 15, 2004 — Washington Group International Inc. announced that it has been selected by the United States Department of Defense under the Program Management Office (PMO) of the Coalition Provisional Authority to assist in the reconstruction of electrical infrastructure in Iraq.

Under the terms of the contract, Washington Group will be awarded specific assignments to provide design-build services for projects associated with electrical transmission and distribution for the Northern Region of Iraq.

The indefinite delivery/indefinite quantity (ID/IQ) contract has a monetary ceiling of $500 million. ID/IQ contracts do not identify a specific quantity of services, but they do set ceilings on the total amount of work that can be awarded during the life of the contract.

“With an experience base of designing and building more than 200,000 megawatts of electricity around the world, we’re pleased to again have the opportunity to assist our government and the Iraqi people in this important reconstruction effort,” said Stephen G. Hanks, Washington Group President and Chief Executive Officer. “Since last year our employees have been working with the Coalition Provisional Authority, the Army Corps of Engineers, Iraqi citizens, and others to restore the electric power grid in northern Iraq. This new contract is a reaffirmation of the heroic work our people are doing.”

The award represents a portion of the $18.4 billion appropriated by the U.S. Congress and managed by the PMO of the Coalition Provisional Authority. The PMO is responsible for all activities associated with program, project, asset, construction, and financial management of that portion of the reconstruction effort undertaken by the U.S. The goal of the PMO, and the prime contractors who are selected, is to assist Iraq in rebuilding infrastructure, growing employment opportunities for Iraqi citizens, and building skill sets and capacity for a strong and successful future.

This latest award is the fourth contract won by Washington Group to support the reconstruction efforts in the region. On March 11, a joint venture of Washington Group and Black & Veatch won an ID/IQ contract under the Coalition Provisional Authority to provide design, engineering, and construction services to rebuild water infrastructure in Iraq. The two-year contract includes three one-year options and a monetary ceiling of $600 million.

Washington Group currently is working on eight task orders awarded by the U.S. Army Corps of Engineers under two separate ID/IQ contracts in the region. Under the Army’s initial one-year contract — awarded last April with a monetary ceiling of $500 million — the company is working on seven task orders totaling $387 million.

The tasks in Iraq include: refurbishing, converting, or installing 13 electrical generators at power plant complexes in northern Iraq; reconstructing 460 kilometers of 400-kilovolt electrical transmission lines near Baghdad; and refurbishing a hospital and administrative facilities in Baghdad. Other tasks under the initial contract with the Army include upgrades to four military bases — two each in Afghanistan and Kuwait.

Earlier this year, Washington Group again teamed with Black & Veatch to win a second ID/IQ contract with the Corps of Engineers. Similar to the 2003 contract with the Corps, this one has a $500-million monetary ceiling for the first year. It also includes four one-year options, each with a $250 million ceiling. Washington Group has received its first order under the new contract: a $33-million task to refurbish more electrical generating units at various locations in northern Iraq.

Washington Group International, Inc. provides the talent, innovation, and proven performance to deliver integrated engineering, construction, and management solutions for businesses and governments worldwide. With approximately 26,000 employees at work in over 40 states and more than 30 countries, the company provides professional, scientific, management, and development services in more than two dozen major markets. The company’s Web site address is www.wgint.com.