Lincoln Group drew widespread media attention last year after the Los Angeles Times revealed in November that the company had been involved in the covert Pentagon operation.
A company spokesman said on Tuesday that a two-year, $6.2 million contract to monitor English and Arabic media and produce "public relations products" for US forces in Iraq had been awarded to the Washington-based company.
Spokesman Bill Dixon said: "Lincoln Group is proud to be trusted to assist the multi-national forces in Iraq with communicating news about their vital work."
The contract is also detailed in documents posted on a US government website which outlines contracts awarded.
The list of media outlets to be monitored includes the New York Times, Fox Television and the satellite channel, Al-Arabiya.
Robert Andrews, a Democratic congressman who serves on the House Armed Services Committee, said he would be asking the US department of defence for information about how the "controversial" vendor was chosen, saying the choice of the Lincoln Group "concerns me greatly."
"I wish that our problem in Iraq was that the military wasn't getting good PR"
Robert Andrews, Democratic congressman
"I wish that our problem in Iraq was that the military wasn't getting good PR," Andrews said.
Lucy Dalglish, the executive director of The Reporters Committee for Freedom of the Press, based in Arlington, Virginia, said she was worried about whether the military would be creating their own news through their own newspapers or websites.
"If they're trying to influence Iraqi opinion of Americans, I almost find that to be unconscionable because that would say that they do not value a free and independent press in Iraq," Dalglish said.
The Lincoln Group, which was formed in 2003, would not comment on details of the contract.
Lt. Col. Barry Johnson, a US military spokesman in Iraq, confirmed the award of the contract but would not comment on how the Lincoln Group was chosen, saying it was merely a "standard contracting process."
"We always monitor the press. Any organisation, anywhere monitors the press to see what's being said, to determine what messages are out there and how it's impacting the environment," Johnson said.
He said the contract did not include any provisions to purchase favourable coverage or pay for favourable stories.
Multi-National Forces Iraq already has in place a contract with The Rendon Group, a Washington DC-based company, to perform similar work to the Lincoln Group.
The Rendon Group contract, worth $6.4 million over a one-year period, was scheduled to expire this September but had been extended until October 27 in order for the winner of the new contract to be determined, Johnson said.
Nabil Khalid, the executive news director of Al-Arabiya, a Dubai-based news organisation, says the multi-national forces in Iraq are losing the public relations battle.
"If you asked me who better influences the media, the insurgents or the multi-national forces, I would say the insurgents," Khalid said.