The White House spokesman said that as the projects were financed with US taxpayers' money it was "appropriate" that countries which did not support the war should not benefit.
Spokesman Scott McClellan said President George Bush was "well aware of the decision, fully supportive of the decision".
France, Germany and Russia blasted the US decision earlier on Wednesday.
The move could also complicate a US effort to gain an international consensus for relieving Iraq's $125 billion in foreign debt.
The European Commission said it was investigating whether the ruling violated global trade rules.
The decision was announced on Tuesday in a notice written by deputy Defence Secretary Paul Wolfowitz, a noted administration hawk.
He said it was necessary to limit competition for the prime Iraq contracts "for the protection of the essential security interests of the United States."
"The United States and coalition countries… are the ones that have been helping and sacrificing to build a free and prosperous nation for the Iraqi people. And I think it's totally appropriate for those US taxpayer dollars to go to the entities I just mentioned," McClellan said.
Companies likely to benefit most from the decision come from Britain, Japan, Italy, the Netherlands, Australia, South Korea and Poland.
"[the policy is] for the protection of the essential security interests of the United States"
deputy defence secretary
Other supporters of the war effort include Albania, Bulgaria, Denmark, Honduras, Hungary, Kazakhstan and the Philippines.
The contracts cover electricity, communications, public buildings, transportation, public works and security and justice.
France said on Wednesday it would study whether the US move was legal and Germany said it could not accept the US decision.
“That would not be acceptable for the German government. And it wouldn't be in line with the spirit of looking to the future together and not into the past," a spokesman for German Chancellor Gerhard Schroeder.
In an apparent effort not to sharpen the brewing diplomatic row with Washington, President Jacques Chirac, Foreign Minister Dominique de Villepin and other ministers avoided reporters' questions after a cabinet meeting.
But a Foreign Ministry spokesman said Paris and its partners, an apparent reference to Germany, were studying the legality of the US decision.
“We are studying the compatibility of these decisions with international competition law together with our partners that are involved, notably in the European Union and the European Commission," said Foreign Ministry spokesman Herve Ladsou in a statement.
As for Moscow, Russian Foreign Minister Igor Ivanov said all countries should be allowed to help rebuild Iraq.
“All those countries that are ready to take part in reconstruction in Iraq should be given the opportunity to do so,” Ivanov said after talks in Berlin with German counterpart Joschka Fischer.