The bombs may have just started dropping, but some U.S. companies are already lining up to cash in on the postwar rebuilding of Iraq.

Weeks before President Bush delivered his final ultimatum to Iraqi President Saddam Hussein, government agencies quietly began soliciting bids from U.S. companies to provide a wide range of services, including bridge and road construction, oil refinery work, airport administration, health services and education.

The initial dollar amount for these various contracts, most of which have yet to be awarded, is less than $2 billion. That's not a huge sum, considering that some of the companies being considered for postwar Iraq contracts --


(HAL) - Get Report



(SLB) - Get Report



-- are big multibillion dollar enterprises.

But the winners of these early reconstruction contracts hope to capitalize on even bigger government deals down the road. That's especially true if the rebuilding effort in Iraq goes on for years, as some think it will have to, if the U.S. is truly committed to building a viable democratic Iraq.

The conventional wisdom is that Halliburton, the oil-services and heavy construction company that Vice President Richard Cheney led, stands to be one of the big winners in the postwar reconstruction bonanza. The Houston-based company is believed to have won a contract to modernize Iraq's oil production facilities, even though neither the company nor the federal government will confirm it.

Two other potential big winners in the postwar sweepstakes are companies that may not be as well known to many investors:


(FLR) - Get Report


Washington Group International


. Both companies, which specialize in heavy construction and engineering work, have confirmed that they submitted bids for some of the contracts being awarded by the U.S. Agency for International Development, as well as other government agencies. The two companies, along with others, were secretly solicited to submit the bids back in February.

"We have been solicited in three areas by the Army Corps of Engineers, USAID and the Defense Threat Reduction Agency," said Jack Herrmann, a Washington Group spokesman. "It involves everything from infrastructure work to biological and radiological work."

This week, with the onset of fighting, shares of Fluor and Washington Group have begun moving up. Fluor, for the week, is up 8% at $34.70 and the stock is up 25% for the year. Over the same time frame, shares of Washington Group are up 5% and 11%, respectively. Halliburton is up 5% for the week and up 12% for the year, while Schlumberger is up 4% for the week, yet down 6% for the year.

The awarding of contracts would be particularly good news for Washington Group, an Idaho-based company that emerged from bankruptcy a little over a year ago. The company, formerly known as

Morrison Knudsen

, reported a fourth-quarter profit of $9.3 million, or 37 cents per share, before accounting for bankruptcy-related items. The company is in a good position to win some Iraq contracts, since 35% of its revenue comes from work for a variety of government agencies.

The same can be said of California-based Fluor, a company that posted nearly $10 billion in revenue and generated $163 million in net income last year. Like Washington Group, it gets a substantial portion of its revenue from government contracts, and that has led a number of Wall Street analysts, including Salomon Smith Barney's Leone Young, to label it as a reasonable "rebuild Iraq play."

That's especially true since the stock, despite its recent gains, still trades $10 below its 52-week high. And shares of Fluor trade at discount to Halliburton and Schlumberger. Based on Thomson Financial First Call earnings estimates for 2003, shares of Fluor trade at a price-to-earnings ratio of 15, compared with a P/E of 18 for Halliburton and P/E of 28 for Schlumberger.

Of course, at this point, there's no guarantee that companies like Fluor or Washington Group will get any of those postwar contracts. And if the war doesn't turn out to be as devastating as initially thought, there may not be that much rebuilding to do in the country.

If that's the case, Fluor again would seem to be in a good position because it's less dependent on government contracts than a company like Washington Group. Its government services division, while big, accounted for roughly 10% of its revenue last year. The company also has a big energy and chemical manufacturing operation that accounts for roughly a third of its annual revenue.

For investors, Fluor offers a chance to make a bet on the outcome of the war -- but a bet that's not totally dependent on the outcome, either.