- Associated Press - Sunday, September 12, 2010

KABUL, Afghanistan | The NATO command has issued new guidelines for awarding billions of dollars worth of international contracts in Afghanistan, saying that without proper oversight the money could end up in the hands of insurgents and criminals, deepen corruption and undermine efforts to win the loyalty of the Afghan people at a critical juncture in the war.

The guidance, issued last week by Army Gen. David H. Petraeus and obtained Sunday by the Associated Press, was issued in response to concern that the military’s own contracting procedures could be, in some cases, running counter to efforts on the battlefield.

The changes are aimed, in large part, at addressing complaints that ordinary Afghans have seen little change in their daily lives despite billions poured into their country since 2001.

“With proper oversight, contracting can spur economic development and support the Afghan government and NATO’s campaign objectives,” Gen. Petraeus wrote in a two-page memorandum. “If, however, we spend large quantities of international contracting funds quickly and with insufficient oversight, it is likely that some of those funds will unintentionally fuel corruption, finance insurgent organizations, strengthen criminal patronage networks and undermine our efforts in Afghanistan.”

Private contractors, both Afghans and foreigners, provide a range of services to U.S. and NATO forces, including transportation, security, running dining facilities and sanitation at military bases, training and construction.

Precise figures on the amount of money paid to contractors were unavailable, though most estimates put the figure at about $14 billion a year. Navy Adm. Kathleen Dussault, head of the Joint Contracting Command, was quoted as recently as July saying that the amount of money being spent in Afghanistan had tripled since 2008.

But President Hamid Karzai has long criticized the international contracting process, saying that war-weary Afghans have not reaped the full benefits because so much of the money goes to high-priced contractors, subcontractors and power brokers.

Afghans also complain that too many contracts are awarded to the same contractors.

“Contracts with a broader range of Afghan companies will help break monopolies and weaken patronage networks that breed resentment” among the Afghan people, Gen. Petraeus wrote. “In situations where there is no alternative to powerbrokers with links to criminal networks, it may be preferable to forgo the project.”

The new guidance said that contracts should go to Afghans first and if the military cannot contract with an Afghan company, the company that is awarded the contract should be encouraged to hire Afghan workers and subcontractors. Gen. Petraeus referenced a Kabul company that is making boots for Afghan police and soldiers as a success story of NATO’s “Afghan First” program.

“Focus efforts on promoting industries with immediate and long-term growth potential, such as agriculture, food processing, beverages and construction,” Gen. Petraeus wrote. “Guard against ‘front businesses’ that fraudulently claim to be Afghan-owned.”

Commanders must use intelligence resources to learn a lot about the companies they are dealing with and determine the effect of each contract on “security, local power dynamics and the enemy.”

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