Francisco A. Laguna & Wojciech Kornacki
The US Government is one of the biggest spenders in Afghanistan. Billions of US dollars are currently being spent on goods, services, infrastructure, security, rule of law and reconstruction. This offers many opportunities for US, Afghan, and foreign companies that have the products and skills the US Government requires to make Afghanistan an economically independent country with a sustainable future.
Since 2002, the US has spent over $100 billion in Afghanistan on various reconstruction projects. In fact, the World Bank estimates that approximately 97 percent of Afghanistan’s gross domestic product (GDP) depends on international military and donor community presence. The US is the largest contributor to the Afghan GDP. Most likely, a comparable level of assistance will continue even after the Post-International Security Assistance Force (ISAF) depart from the country in 2014 because while the troops leave, many contracts will still be on-going or will have yet to be awarded.
According to the 2011 US Senate Committee on Foreign Relations report, the United States spends most of its resources in Afghanistan on economic assistance and international narcotics prevention and law enforcement. Companies and contractors specializing in law enforcement, rule of law, narcotics prevention, and job training will continue to benefit from these US priorities in Afghanistan. As ISAF leaves, competition for remaining and future contracts will also increase. Having timely access to information will be critical.
In May 2012, the United States and Afghanistan signed the Enduring Strategic Partnership Agreement. This document outlines a strategic partnership between the nations and emphasizes the US intent to continue to assist Afghanistan. Moreover, since May 2012, Afghanistan has been designated as a Major Non-NATO Ally, which allows it to participate in development projects, have preferential access to US military surplus supplies, access to US loans to finance weapons purchases, and expedited processing of Afghan applications for exports, from the US, of space and technology products.
Recognizing the great interest in federal procurement contracts in Afghanistan (and Iraq), the government issued acquisition guidelines in 2009 to better respond to the situation on the ground in-country. The purpose of the guidelines is to make the process as fair, transparent and accountable as possible. Provisions of interest include streamlined procedures for contracts below specific thresholds as well as special procedures for US small businesses and qualifying Afghan businesses.
If you are looking for specific advice regarding business opportunities in Afghanistan or how to successfully engage and deal with US Government while in Afghanistan, contact TransLegal.