Inside Defense
July 17, 2009 -- Deputy Defense Secretary William Lynn this month waived two procurement policies standing in the way of Pentagon plans to build a new network of supply routes in the countries around Afghanistan.
Pentagon officials are pursuing plans to build what they have called a “Northern Distribution Network” (NDN) in the countries forming a geographic link between Afghanistan and Europe, plus Pakistan. As for logistical issues involved in the effort, they are pursuing two objectives: Ensuring the Defense Department is authorized to buy construction-related material and services locally, and giving local suppliers a leg up over international competitors.
The countries involved include Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Collectively, defense officials refer to the group as “South Caucasus and Central and South Asia,” or “SC/CASA.”
Lynn issued two memos on July 9 determining that the Pentagon may do business with these countries despite a prohibition of doing so included in the 1979 Trade Agreements Act, which implements the World Trade Organization Government Procurement Agreement (WTO GPA).
Under the law, the envisioned countries are ineligible for procurements from the Defense Department or the General Services Administration, Lynn wrote.
Pentagon leaders, on May 21, requested a waiver from U.S. Trade Representative Ron Kirk, covering the acquisition of “products, including construction materials and services . . . in direct support of operations in Afghanistan,” Lynn's memo states. Kirk authorized the waiver on June 2, Lynn wrote.
“This authority will allow the United States to provide the host nations with some economic benefit and will reduce overall U.S. transportation costs and risk,” Lynn wrote. Buying from the SC/CASA nations also would “contribute toward developing a responsible, stable and cooperative coalition of national partners to facilitate the movement of supplies” to Afghanistan, he added.
The State Department's latest human rights report, released in February, identifies some of the countries named as candidates to support the planned U.S. supply route as authoritarian regimes with poor human rights records.
Most supplies for the Afghanistan war are currently ferried through what Lynn's memo dubs the “Pakistan ground lines of communication” or PakGLOC. Insurgent attacks on these supply lines, plus “existing physical and bureaucratic limitations,” necessitated the search for a more diversified route network capable of greater throughput, he wrote.
“It is expected that a sizable, sustained force level in Afghanistan will be in place through the next several years, and maintaining a viable NDN is in the national security interest of the United States,” Lynn added.
In his second memo, Lynn exempts the Pentagon's NDN plans from the McNamara-era Balance of Payments Program. The DOD-specific policy mandates that certain construction materials purchased by the military must be manufactured in the United States.
Meanwhile, lawmakers in both houses of Congress inserted provisions in the emerging fiscal year 2010 authorization legislation that would give preference to local SC/CASA suppliers bidding for work on supply routes. Sources said the idea for the effort began during the tenure of former Pentagon acquisition chief John Young. In May, Pentagon officials formally asked lawmakers to put language to that effect into the defense authorization legislation (DefenseAlert, May 19).
In an April 13, 2009, memo, U.S. Central Command chief Gen. David Petraeus ordered his staff to be “creative and aggressive” in contracting with suppliers in the SC/CASA countries.
“I understand following this policy will require patience, as it may not always lead to the quickest or most efficient means for fulfilling requirements,” he wrote. “I expect you to use sound judgment and exercise patience in balancing near-term risk with the long-term operational dividends healthy SC/CASA economies bring with them,” he added. -- Sebastian Sprenger
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