Steve Peacock's U.S. Trade & Aid Monitor

USAID Dumping $50 Million into Central Asia Trade & Reform Project

$50 million in contracts recently were awarded to four vendors under an initiative that seeks to promote economic growth in Central Asia, the U.S. Agency for International Development (USAID) revealed today. Contracting documents indicate that the program will benefit "failed states" that have poor banking and other economic policies and institutions: 

"A wealthier, healthier and more stable Central Asia will be characterized by increasing trade and investment between countries among which economic interests are aligned. It will also be characterized by the establishment of mutually beneficial commercial ties with neighboring countries such as Russia and China."

The $50 million figure encompasses an estimated ceiling for the Macroeconomic Foundations for Growth program (Solicitation #SOL-176-11-00000-2), for which the agency awarded indefinite quantity contracts, or IQCs, to Chemonics International, Inc., Deloitte Consulting, LLP, Pragma Corporation, and AECOM International Development. The vendors each will receive an unspecified number of  "task orders" over five years, during which time they could execute a variety of potential initiatives in the nations of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

Chemonics, Deloitte, Pragma, and AECOM will provide training, research, and technical and advisory services that USAID hopes "will improve the macro environment for business enterprise formation and growth, trade, and domestic and foreign investment" in Central Asia.  The project will seek to accomplish those goals through:

1) Legal and institutional reform;

2) Financial sector reform and expansion;

3) Economic policy and institutions development;

4) Trade and investment, and:

5) Addressing exogenous shocks, assistance to ease the adjustment to exogenous economic and financial shocks that cause short and medium-term development problems affecting the national business environment and potential to generate economic growth.

6) Stabilization – Crisis Assistance Projects.

Although USAID technically awarded the contracts on July 1, the agency did not announce them via the Federal Business Opportunities database until July 11.

SNAPSHOT: Hundreds of Millions of Gallons of Jet Fuel Used in Support of U.S. Ops in Afghanistan

Occasionally U.S. Trade & Aid Monitor will take a look at various facets of government spending; a snapshot, if you will, of a particular use of taxpayer funds. Today, the Monitor looks at how much the federal government spends on jet fuel in support of U.S. military operations in Afghanistan.

Calls to speed up the withdrawal of U.S. troops from and Central Asia have increased since Osama bin Laden’s death, but decision-makers have made clear that such a drawdown of troops is not happening any time soon. As the White House, Congress, and media pundits ponder and expound upon what, if any, changes should be made to U.S. policy on the issue, one thing is certain: U.S. military jets will continue to fly into, out of, and around Afghanistan.

But how much will this cost U.S. taxpayers?

A review of contracting documents obtained via federal database research sheds light on that question.

The Defense Logistics Agency (DLA), for example, currently is soliciting bids to provide close to a half-billion gallons of jet fuel over two years, beginning December 2011, to the Manas Transit Center in Kyrgyzstan. Manas is a primary support base for U.S. Central Command (USCENTCOM) operations in Afghanistan and elsewhere in USCENTCOM’s area of responsibility.

“The Transit Center at Manas has four missions: Air Refueling, Airlift, Onward Movement of Troops and Humanitarian Assistance,” the U.S. Air Force says in its official description of the base. “They do this with the help of 850 military members and 750 U.S. and host nation civilian employees and contractors—the vast majority belong to the 376th Air Expeditionary Wing and others to various tenant units.

Although the solicitation did not provide an estimated cost, DLA is requesting bids on the provision of 208 million gallons of jet fuel for a one-year period, with two potential six-month option periods for an additional 104 million gallon each.

Those totals include 36 million gallons that the contractor would hold in reserve monthly—a service that enables the contractor to assess an additional multi-million dollar fee.

DLA in Nov. 2010 awarded to Mina Corp. a one-year contract for 240 million gallons of jet fuel—which, calculated at the then-going price of $3.24 a gallon, brought the value of the contract to $778 million, according to a Transit Center Jet Fuel Procurement document.

The contract price-per-gallon on Feb. 1 was upped to $3.80 a gallon to “reflect current market conditions,” according to the document.

In 2009 DLA awarded a contract valued at $327 million (plus a $3.7 million fuel-reserve fee) for 105 million gallons. That contract also had gone to Mina Corp.

Placing these expenditures into context—and indirectly confirming that such costs will continue to be borne by U.S. taxpayers into the foreseeable future—are remarks that Sen. John Kerry (D., Mass.) made during this morning’s Senate Foreign Relations Committee hearing “Steps Needed for a Successful 2014 Transition In Afghanistan.”

Committee Chmn. Kerry emphasized that the terrorist leader’s death marked a turning point in U.S. policy for Afghanistan—but when and how the U.S. will make that turn remains unknown.

“Osama Bin Laden’s death was more than a critical triumph in our fight against terrorism,” Kerry said. “It provides a potentially game-changing opportunity to build momentum for a political solution in Afghanistan that could bring greater stability to the region and bring our troops home.”

Despite this acknowledgement, Kerry made clear that he was not referring to an abrupt departure of U.S. forces.

“A precipitous withdrawal from Afghanistan would be a mistake and I, for one, would take that option off the table,” he said. “Instead, we should be working toward… a presence that puts Afghans in charge—and presses them to step up to that task—at the same time that it secures our interests and accomplishes our mission of destroying Al Qaeda and preventing Afghanistan from ever again becoming a terrorist sanctuary.”

Kerry said it was “unsustainable” for the U.S. to continue spending $10 billion monthly on military operations there.

He also said that the Afghanistan government was even less  capable, financially and otherwise, of filling a void that would be left by a hasty U.S. exit.