Petraeus urges better use of Afghanistan contracting

WASHINGTON Mon Sep 13, 2010 6:06pm EDT

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WASHINGTON (Reuters) - The head of NATO forces in Afghanistan urged commanders on Monday to hire more Afghans and steer contracts to local businesses in a move aimed at boosting Afghanistan's economy, a key counterinsurgency goal.

General David Petraeus, in new guidelines for commanders, said the controversial multi-billion dollar contracting process in Afghanistan "represents both an opportunity and a danger" for growth if properly overseen but one that fuels corruption and insurgency if not.

"In view of these points, contracting has to be 'commander's business,'" Petraeus said in an unclassified memo. "Indeed, I expect commanders to consider the effects of our contract spending and understand who benefits from it."

The U.S.-led operation in Afghanistan, which spent an estimated $14 billion last year on contracting work, has been criticized in the past for not having an accurate count of the numbers of contractors employed in Afghanistan.

Pentagon figures show U.S. military has some 112,000 private contractors in Afghanistan, doing everything from managing dining halls and washing uniforms to transporting supplies and building hospitals and other facilities.

Nearly 80,000 of the contractors are Afghan nationals, about 16,000 are U.S. citizens and another 17,000 are from other countries.

Former NATO commander General Stanley McChrystal said last April the use of private contractors to support military and security operations in conflict zones had gone too far and more Afghan contractors should be used to replace foreign ones.

Afghan President Hamid Karzai also has criticized the large number of foreign contractors in Afghanistan. Last month he gave foreign security firms four months to disband.

In his guidance to commanders, dated September 8 and released publicly on Monday, Petraeus directed NATO forces to use purchases of goods and services to "bolster economic growth, stability and Afghan goodwill toward their government and ISAF (International Security Assistance Force)."

"Contracts with Afghan firms that procure Afghan goods and services generate employment and assist in the development of a sustainable economy," he wrote.

AFGHANS FIRST

"If we contract with powerbrokers who exclude those outside their narrow patronage networks or are perceived as funneling resources to one community at the expense of another, the effect on Afghan perceptions and our mission will be negative," he added.

Petraeus said contracts should be used to hire Afghans first, to buy Afghan products and to build Afghan capacity. He cited a contract with an Afghan firm to provide boots for the Afghan military as an example to be emulated.

"Wherever appropriate, use in-country sourcing rather than imports," he wrote. "Look for opportunities to incorporate maintenance and repair training in existing contracts to build Afghan skills and create long-term employment."

Petraeus recommended commanders promote industries with immediate and long-term growth potential, like food processing, beverages, agriculture and construction.

He cautioned the commanders to make sure the firms were not fronts for foreign or illegal operations and to avoid excessive layers of subcontractors, which can be used to divert funds from their intended purpose.

Discovery of any link between contractors and criminal networks, Petraeus said, should lead to "appropriate actions, such as: suspension and debarment of the individuals or the company, contract termination or not renewing a contract option period."

(Editing by Paul Simao)

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