WASHINGTON (CNN) -- Herndon, Virginia-based Triple Canopy has been awarded the security services contract in Baghdad, a State Department source told CNN Tuesday.
Triple Canopy is taking over the expiring Iraq security contract of Blackwater/Xe, a source tells CNN.
The order is effective Tuesday, the source said, but Triple Canopy's "in-country performance" won't begin until May 7.
Triple Canopy will take over the expiring contract of Blackwater, which changed its name to Xe last month. The State Department decided in January not to renew Blackwater/Xe's contract when it expires in May.
That followed a refusal by the Iraqi government to renew the firm's operating license because of a September 2007 shooting incident in which the Iraqi government says security guards -- then employed by Blackwater -- fired upon and killed 17 Iraqi civilians.
As part of a contract to protect American diplomats and other employees around the world, the State Department hired Blackwater for a multiple-year assignment in Iraq, renewable once a year. Blackwater/Xe, one of three security firms working for the United States in the country, had one of the biggest security contracts in Iraq.
Triple Canopy already has a State Department contract in Iraq. The new contract will increase its share of the security work there. DynCorp International also has a State Department contract for work in Iraq.
Losing the contract is considered a huge blow to Blackwater/Xe. While the company is privately held, the Iraq contract has been estimated to make up one-third to one-half of its business. Blackwater/Xe has about two dozen aircraft in Iraq, as well as 1,000 personnel.
Earlier this month, the company's founder, Eric Prince, resigned as head of the company.
Five former Blackwater security guards pleaded not guilty in January to charges of voluntary manslaughter and other serious crimes stemming from their involvement in the September 16, 2007, incident in a Baghdad square. A sixth former security guard has pleaded guilty to charges of voluntary manslaughter and attempted manslaughter.
Blackwater says its employees were returning fire after they were attacked by armed insurgents, but an Iraqi investigation concluded that the guards randomly fired at civilians without provocation. The Iraqi government maintains 17 civilians were killed, although the indictment alleges 14 died.
The company does not face any charges. But the Baghdad incident exacerbated the feelings of many Iraqis that private American security contractors have operated since 2003 with little regard for Iraqi law or life.
The indictment of the five men represents the first prosecution of non-Defense Department contractors under the Military Extraterritorial Jurisdiction Act. The act was amended in 2004 to allow the Justice Department to prosecute such personnel providing services "in support of the mission of the Department of Defense overseas."
Last year, the State Department renewed Blackwater's contract over strong objections from the Iraqi government. Starting January 1, the Iraqi government has mandated that all contractors obtain Iraqi licenses to operate.