Awarding the first major contract for Iraq's reconstruction to politically-connected Bechtel sent "a deplorable message to a sceptical world," the New York Times said in an editorial.

The move "can only add to the impression that the United States seeks to profit from the war it waged," the Times charged.

The US government announced that a contract worth up to $680 million for emergency repair and rehabilitation of Iraq's infrastructure had gone to Bechtel Group of San Francisco.

"Bechtel is undeniably one of the world's most experienced construction companies and has a long history of doing business in the Middle East," the Times acknowledged.

"But like virtually all of the big American companies involved in global construction, it has deep and long-standing ties with the power centres in Washington," it went on.

Former secretary of state George Shultz sits on its board of directors, and Bechtel's chief executive is a member of a presidential trade advisory board, the Times noted.

Such ties make the deal an easy target for criticism, the Times said, calling for an "open, competitive, transparent process" in giving out the work ahead in Iraq.