The NATO-led International Security Assistance Force (ISAF) in Afghanistan has issued a new set of contracting guidelines aimed at decreasing corruption and reducing the amount of funds that indirectly flow into the hands of insurgents and criminals. Currently, it is estimated that $14B USD a year is being paid to contractors.
Background
The international contracting process in Afghanistan has been criticized by many, including President Hamid Karzai who often states that the process fails to employ an adequate amount of Afghans, and denies many of the benefits of foreign spending because much of the contracting money goes to over-priced, corrupt contractors, subcontractors, power brokers, and foreign contractors. Many Afghans feel overlooked when NATO forces hire companies that are completely staffed by foreign workers.
On numerous occasions contracts have ended up aggravating Afghanistan’s problems by empowering warlords and established power brokers, favouring certain tribes over others, lining the pockets of corrupt local leaders, and delivering services like security by paying off gunmen for illegal armed groups. In other cases, contractors are paid who are inefficient and perform poorly on anything from delivering military supplies to construction projects. Not only does this undercut the trust of average Afghans who see money being spent but never see the results, it undermines the faith of Afghans in NATO and in their own government.
New Guidelines
In view of these points, the guidelines issued last week by Gen. David H. Petraeus define contracting as a “commanders business”, one where commanders must consider the effects of contract spending and ensure those who NATO works with, work for the best interests of the Afghan people.
General Petraeus urges NATO commanders to look at contracting through an unconventional lens, instructing them to work with a broader range of Afghan companies to help break monopolies and weaken patronage networks. Using local firms will also significantly reduce costs and timetables because products do not have to be shipped from foreign factories. If unable to find qualified contractors, however, NATO must encourage foreign companies to employ Afghan workers to carry out the terms of the contract. In situations where there is no alternative to companies with links to criminal networks, Petraeus insists that “it may be preferable to forgo the project”.
He also emphasizes the importance of contracting with vendors who have fewer sub-contractors in order to maintain visibility of the sub-contractor network. Lead contractors should also be held responsible for their sub-contractors, warned General Petraeus, as “excessive sub-contracting tiers provide opportunities for criminal networks and insurgents to divert contract money from its intended purpose”.
As a final point, the General maintains that intelligence resources must be used to determine the effect of each contract on “security, local power dynamics and the enemy”. When links are found between contractors and criminal networks, appropriate actions must be taken, including suspension or debarment of the individual or company. If the contractors cannot perform sufficiently, they will be put on notice and run risk of losing the contract completely.
The hope is that with appropriate oversight, contracting will increase development, assist the Afghan government and support NATO’s operational goals.
Looking Forward
Following the new guidelines, NATO recently contracted with three Afghan companies all owned by women. At a cost of roughly USD$300m, the contractors will be providing boots, t-shirts and other clothing to 125 000 Afghan soldiers. This is significantly less than the would-be cost of buying the items from foreign firms, which would range upwards from $1.4B USD.
In addition to this, Afghanistan’s Ministry of the Interior has developed a phased approach to disband firms that operate illegally, are not registered properly with the government, have been criticized for reckless behaviour, and those that protect private businesses and dignitaries. The approach is expected to help curb corruption while decreasing serious threats to the government’s national sovereignty.
These contracts and policies represent the kind of action NATO commanders would like to see more of in the future.
By: Chelsea Plante
Further Reading: COMISAF’s New Counterinsurgency (COIN) Contracting Guidelines, Eliminating Afghan Corruption, New Guidelines for Afghanistan Contracts, International Contracts in Afghanistan, Petraeus Issues Guidance for Afghan Contracting
