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AFGHAN PROCUREMENT REFORM CONTENTS AFGHAN PROCUREMENT REFORM CONTENTS Procurement: Nearly 50% of Afghan Budget 5 SIGAR Assistance to Afghan Procurement 7 Creating an Apparatus for Reform 8 Progress and Caveats 12 The Stakes Remain High 15 Photo on previous page Afghan President Ashraf Ghani presides at a session of the National Procurement Commission that he established to review major procurements. Chief Executive Abdullah Abdullah is at the president’s right. (Photo by Afghanistan’s Office of the President) 2 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION
AFGHAN PROCUREMENT REFORM THE NEED TO CONTINUE AFGHAN PROCUREMENT REFORM Government procurement spending worldwide—purchases and contracts for goods and services—accounts for 13–20% of countries’ gross domestic product, according to Transparency International. “With such vast sums at stake,” the civil-society organization notes, “few government activities create greater temptations or offer more opportunities for corruption than public sector procurement.” 1 Even among European Union countries with well-developed administrative systems, for example, the Organization for Economic Cooperation and Development reports, “Studies suggest that up to 20–25% of the public contracts’ value may be lost to corruption.” 2 In Afghanistan, the potential for monetary losses from corruption—not to mention other losses from poor management and oversight practices—is almost certainly more substantial. As SIGAR and other organizations have repeatedly found, Afghanistan suffers from limited institutional capacity to conduct basic governmental functions, and from widespread and systemic corruption that consistently places it near the bottom of international rankings for public perception of corruption. The Special Inspector General for Afghanistan Reconstruction (SIGAR) has taken an active role in supporting procurement reform in Afghanistan. SIGAR views vigilant oversight and Afghan reform initiatives as important means of protecting American taxpayers’ aid money as more of it passes into budgetary control by Afghan ministries. A nearly $1 billion fuel procurement initiated by the Afghan Ministry of Defense (MOD) illustrates both the need for reform and SIGAR’s involvement in problematic cases. Until 2013, the U.S.-led Combined Security Transition Command- Afghanistan (CSTC-A) handled fuel procurements for the Afghan MOD and the Ministry of Interior (MOI), which control the Afghan army and police forces, respectively. In 2013, the ministries took over the function of soliciting bids for fuel contracts, with CSTC-A providing money to pay the bills via direct assistance. 3 The MOD awarded a fuel contract that year to four Afghan vendors for a total value of nearly $1 billion. SIGAR’s Investigations Directorate heard REPORT TO THE UNITED STATES CONGRESS I JANUARY 30, 2017 3
Page 1 and 2: SIGAR JAN Special Inspector General
Page 3 and 4: JOWZJAN BALKH KUNDUZ TAKHAR BADAKHS
Page 5 and 6: This quarter, SIGAR issued 13 audit
Page 7 and 8: EXECUTIVE SUMMARY • the abandonme
Page 9 and 10: TABLE OF CONTENTS SECTION 4 203 OTH
Page 11: 1AFGHAN PROCUREMENT REFORM 1
Page 15 and 16: AFGHAN PROCUREMENT REFORM from ente
Page 17 and 18: AFGHAN PROCUREMENT REFORM Conflict:
Page 19 and 20: AFGHAN PROCUREMENT REFORM that alth
Page 21 and 22: AFGHAN PROCUREMENT REFORM system fr
Page 23 and 24: AFGHAN PROCUREMENT REFORM identify
Page 25 and 26: AFGHAN PROCUREMENT REFORM THE STAKE
Page 27 and 28: 2 SIGAR OVERSIGHT 17
Page 29 and 30: SIGAR OVERSIGHT ACTIVITIES SIGAR OV
Page 31 and 32: SIGAR OVERSIGHT ACTIVITIES on TFBSO
Page 33 and 34: SIGAR OVERSIGHT ACTIVITIES Performa
Page 35 and 36: SIGAR OVERSIGHT ACTIVITIES were pro
Page 37 and 38: SIGAR OVERSIGHT ACTIVITIES Financia
Page 39 and 40: SIGAR OVERSIGHT ACTIVITIES 1. Deter
Page 41 and 42: SIGAR OVERSIGHT ACTIVITIES is now t
Page 43 and 44: SIGAR OVERSIGHT ACTIVITIES Review L
Page 45 and 46: SIGAR OVERSIGHT ACTIVITIES indefini
Page 47 and 48: SIGAR OVERSIGHT ACTIVITIES their co
Page 49 and 50: SIGAR OVERSIGHT ACTIVITIES communit
Page 51 and 52: SIGAR OVERSIGHT ACTIVITIES advocate
Page 53 and 54: SIGAR OVERSIGHT ACTIVITIES remote o
Page 55 and 56: SIGAR OVERSIGHT ACTIVITIES The Cour
Page 57 and 58: SIGAR OVERSIGHT ACTIVITIES at both
Page 59 and 60: SIGAR OVERSIGHT ACTIVITIES restitut
Page 61 and 62: QUARTERLY HIGHLIGHT Louis M. Bailly
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SIGAR OVERSIGHT ACTIVITIES FIGURE 2
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QUARTERLY HIGHLIGHT Suspensions and
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QUARTERLY HIGHLIGHT appealed a susp
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SIGAR OVERSIGHT ACTIVITIES the Unit
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SIGAR OVERSIGHT ACTIVITIES identify
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3RECONSTRUCTION UPDATE 63
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RECONSTRUCTION UPDATE RECONSTRUCTIO
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RECONSTRUCTION UPDATE that project
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STATUS OF FUNDS STATUS OF FUNDS To
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STATUS OF FUNDS Security Forces Fun
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STATUS OF FUNDS Congress appropriat
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STATUS OF FUNDS ASFF BUDGET ACTIVIT
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STATUS OF FUNDS USAID INCLE State A
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DOD STATUS OF FUNDS CERP DOD DOD DR
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DOD STATUS OF FUNDS ESF USAID INTER
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STATUS OF FUNDS the United Kingdom
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SECURITY SECURITY KEY ISSUES AND EV
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SECURITY FIGURE 3.26 AVERAGE NUMBER
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SECURITY investigation concluded th
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SECURITY USFOR-A determined that
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SECURITY System for the ANA’s Nat
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SECURITY FIGURE 3.27 RS TRAIN, ADVI
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SECURITY DOD reported the ASSF in b
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SECURITY TABLE 3.8 ANDSF ASSIGNED F
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SECURITY function without Coalition
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SECURITY international scholarships
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SECURITY TABLE 3.10 COST OF U.S.-FU
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SECURITY Utility in Kabul ($314,325
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SECURITY An AAF specialist adjusts
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SECURITY According to USFOR-A, the
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SECURITY A Women’s Participation
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SECURITY announcement has provoked
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SECURITY as well as for civilians a
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GOVERNANCE GOVERNANCE KEY ISSUES AN
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GOVERNANCE U.S. RECONSTRUCTION FUND
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GOVERNANCE TABLE 3.14 USAID ON-BUDG
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GOVERNANCE the ARTF is the largest
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GOVERNANCE Of 59 conditions defined
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GOVERNANCE TABLE 3.15 USAID CAPACIT
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GOVERNANCE independent news and pub
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GOVERNANCE ministry of municipal af
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GOVERNANCE In January, the Wall Str
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GOVERNANCE TABLE 3.17 RULE OF LAW A
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GOVERNANCE ADALAT found in the cour
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GOVERNANCE without proper vetting o
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GOVERNANCE to the absence of design
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GOVERNANCE TABLE 3.18 USAID GENDER
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GOVERNANCE service is organized on
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ECONOMIC AND SOCIAL DEVELOPMENT ECO
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ECONOMIC AND SOCIAL DEVELOPMENT Agr
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ECONOMIC AND SOCIAL DEVELOPMENT TAB
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ECONOMIC AND SOCIAL DEVELOPMENT $7.
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ECONOMIC AND SOCIAL DEVELOPMENT reg
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ECONOMIC AND SOCIAL DEVELOPMENT FIG
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ECONOMIC AND SOCIAL DEVELOPMENT qua
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ECONOMIC AND SOCIAL DEVELOPMENT ins
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ECONOMIC AND SOCIAL DEVELOPMENT are
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ECONOMIC AND SOCIAL DEVELOPMENT dis
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ECONOMIC AND SOCIAL DEVELOPMENT Pow
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ECONOMIC AND SOCIAL DEVELOPMENT Cit
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ECONOMIC AND SOCIAL DEVELOPMENT Wor
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ECONOMIC AND SOCIAL DEVELOPMENT A s
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ECONOMIC AND SOCIAL DEVELOPMENT to
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ECONOMIC AND SOCIAL DEVELOPMENT wit
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COUNTERNARCOTICS COUNTERNARCOTICS K
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COUNTERNARCOTICS opium-poppy cultiv
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COUNTERNARCOTICS UNODC estimates th
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COUNTERNARCOTICS The program pays a
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COUNTERNARCOTICS remained the top o
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COUNTERNARCOTICS Community Based Ag
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COUNTERNARCOTICS activities include
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COUNTERNARCOTICS in 2016 at an addi
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COUNTERNARCOTICS TABLE 3.6 INTERDIC
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OTHER AGENCY OVERSIGHT CONTENTS OTH
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OTHER AGENCY OVERSIGHT COMPLETED OV
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OTHER AGENCY OVERSIGHT U.S. Departm
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OTHER AGENCY OVERSIGHT Audit of Afg
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OTHER AGENCY OVERSIGHT equipment su
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APPENDICES AND ENDNOTES CONTENTS Ap
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APPENDICES APPENDIX A CROSS-REFEREN
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APPENDICES TABLE A.1 (CONTINUED) CR
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APPENDICES TABLE A.2 CROSS-REFERENC
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APPENDICES APPENDIX B U.S. FUNDS FO
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APPENDICES APPENDIX C SIGAR WRITTEN
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APPENDICES Ongoing Financial Audits
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APPENDICES APPENDIX D SIGAR INVESTI
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APPENDICES TABLE D.1 SPECIAL ENTITY
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APPENDICES TABLE D.1 (CONTINUED) SP
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APPENDICES TABLE D.1 (CONTINUED) SP
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APPENDICES ACRONYM OR ABBREVIATION
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ENDNOTES 1. Transparency Internatio
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ENDNOTES 100. General John Nicholso
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ENDNOTES 226. RS, email to SIGAR, 1
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ENDNOTES 380. UNMAS, Afghan Civilia
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ENDNOTES 483. Voice of America, “
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ENDNOTES 596. SIGAR, analysis of MO
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ENDNOTES 698. USAID, OI, response t
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ENDNOTES 794. UN, Report of the Sec
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A worker looks down on an Afghan va
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