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ISAF’s New Counterinsurgency Contracting Guidance

After nine years and billions wasted - nothing changes
Matthew J. Nasuti (Former U.S. Air Force Captain)
Friday 26 November 2010

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On September 8, 2010, after nine years of contracting abuses and mismanagement, NATO’s International Security Assistance Force in Afghanistan (ISAF) issued its solution, which is set out in the “COMISAF Counterinsurgency Contracting Guidance.” This impressive title overshadows the actual text of the guidelines, which say little and fail to address any of the core contracting problems.

The Guidance stresses the importance of transparency, yet this is simply window dressing to appease critics in the U.S. Congress. Today, months after the Guidance was adopted, it remains impossible to search the ISAF website for contracting information. There is no listing of ISAF contractors; no listing of contracts awarded; no spreadsheets on projects that are behind schedule or over budget; no explanation at all about any public funds being spent.

The Guidance fails to address such things as the award of $850 million per year to a shadowy company called FMN Logistics. It is apparently a component of ISAF’s “Northern Distribution Network.” Reports indicate that FMN may be owned by 37-year old billionaire Gulnara Karimova; daughter of brutal Uzbek dictator Islam Karimov. If ISAF truly wants to inject transparency, honesty and accountability into its contracting process, it should start by explaining the FMN contract and it should publish the complete contract on its web site. It should do the same with the suspicious Manas Airbase fuels contracts which were awarded to a Gibraltar-registered company.

One of the fundamental problems associated with ISAF contracting in Afghanistan is the tremendous pressure to show “progress.” Progress seems to be defined as anything positive that can be placed in a press release, regardless of its actual military or economic value. That pressure to show results permeates downward into the military ranks.

This reporter has been in contact with military members who served in Provincial Reconstruction Teams (PRTs) in Afghanistan. The story that comes out is that PRTs are hiring contractors and pursuing projects even though they do not have sufficient qualified personnel to oversee the contracts. As will be explained below, the U.S. Army Corps of Engineers in Afghanistan has the same systemic problem. In the U.S. military, officers are rewarded for having a “can-do” spirit. That spirit can be harmful to military effectiveness. ISAF military contracting officers should be delaying awards and reducing the number of projects on-going because they lack sufficient engineers, project managers and inspectors. Instead, because no one wants to admit that they are unable to complete their mission, contracts continue to be awarded which cannot be supervised, and substantial amounts of money continue to be wasted on shoddy construction, all for the sake of generating “positive” statistics and showing “progress.”

Small, inexperienced Afghan contractors, who are not familiar with U.S. building designs and specifications, require constant oversight. This may require U.S. inspectors to be on-site at least every week, but for critical path (i.e., key construction) events, they may need to be present every day. At present, this level of oversight is not taking place; instead, ISAF’s emphasis is quantity over quality.

On November 14, 2010, Dion Nissenbaum of McClatchy Newspapers reported on a 2008, U.S. Army Corps of Engineers project to build six police stations in Badakhshan Province, Afghanistan. The project is two years behind schedule with substantial amounts of U.S. taxpayer funds wasted. Colonel Thomas H. Magness, the head of Corps of Engineers projects for Afghan Engineer District North, told Mr. Nissenbaum that his personnel had only inspected the project once in October 2009. As Colonel Magness is responsible for 300 on-going projects, it is anticipated that many others suffer from the same degree of mismanagement and neglect. Col. Magness, in his interview, refused to criticize Corps personnel, blaming everything on the local Afghan companies. This refusal to accept any responsibility for the continuing waste of taxpayer funds is endemic throughout ISAF. Building shoddy and unsafe roads, schools and other facilities only validates Taliban propaganda and damages the war effort. It does nothing to improve the lives of the average Afghan.

If General David Petraeus really wants to implement meaningful reform of military contracting, he should start by issuing the following:

COMISAF Contracting Instructions
1. No contract shall be awarded without fair and adequate competition. Exceptions require COMISAF approval.
2. No contract shall be awarded unless and until there is sufficient technical staff to properly oversee the project. It should be noted that some construction projects, especially those awarded to small Afghan firms, may require on-site inspections on a day to day basis. Each contract shall have an “inspections plan” which details the level of inspection and resources anticipated for that project. The plan shall be updated as project conditions warrant.
3. No contract shall be awarded to construct any structure, facility or road unless and until there is a plan and funding to maintain and operate said structure, facility or road. Otherwise, there is a substantial risk that the taxpayer funds may ultimately be wasted. The goal is sustainable development.
4. No structure, facility or road shall be turned over to local, provincial or national authorities unless and until it meets all generally accepted international standards for being safe to enter, live in, work in and/or drive on.
5. Any military official who knows or should know that any of these instructions are being violated, and who fails to promptly recommend or take the appropriate remedial action shall be subject to courts-martial. Any such civilian shall be subject to disciplinary action up to and including dismissal.

While this is a simple set of instructions, its issuance would represent real reform because it addresses the four core problems that agency inspectors general have repeatedly uncovered. It is the minimum that ISAF should be insisting on and that NATO taxpayers deserve.

This author previously served in the U.S. Air Force as a Captain. One of his assignments was with Air Force Logistics Command where he specialized in base-level contracting. He also worked as a Contracts Manger with the world’s largest construction company (Bechtel) and went on to serve as legal counsel to Bechtel Corp., helping to oversee infrastructure projects valued at $1/4 billion.
Further reading see: “Contractors Leave Afghan Police Stations Half-Complete” November 14, 2010, McClatchy Newspapers; and “Construction Contracts a Weak Link in Afghan Nation Building” November 20, 2010, McClatchy Newspapers.

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