Afghan companies say they aren't being paid

AP News
Posted: Jun 20, 2013 1:47 PM

WASHINGTON (AP) — A U.S. watchdog agency is pressing defense and diplomatic leaders to work more aggressively to ensure that contractors in Afghanistan promptly pay their Afghan subcontractors, amid hundreds of complaints that suggest nearly $70 million could be owed to local firms.

The Special Inspector General for Afghanistan Reconstruction said in a letter released Thursday that it has received 753 complaints as of October 2012 and opened 52 investigations over non-payment issues. And other federal agencies reported earlier this year that they have gotten 44 similar complaints over the past six years.

In one instance, the letter said, an Afghan security company's employees reportedly threatened the firm's management "at gunpoint at the worksite, and the company's management later reported to SIGAR that assault rifles, ammunition, and uniforms were missing from the worksite."

"According to the employee," the letter said, "the incident was directly attributable to the prime contractor's failure to pay."

The letter also said subcontractors have threatened to use suicide bombs to blow up U.S. contractors and government agencies and have also threatened to sabotage, destroy or steal equipment. There also have been allegations that subcontractors have sought arrest warrants and stop work orders through the Afghan government in order to force payments.

The report said that one subcontractor "threatened to set himself on fire in front of the U.S. Embassy in protest of nonpayment," and it said other subcontractors may face threats from their employees or creditors.

Employees of prime contractors, the report said, have received death and kidnapping threats from subcontractors who claimed they had not been paid.

The inspector general said the problem results in contractors becoming less willing to work with Afghan subcontractors and erodes efforts to create jobs and improve the nation's economy. It also raises questions about contractors seeking more money from the federal government than they are entitled to receive.

Afghan companies complain that the persistent problem has prevented them from bidding on other jobs and impeded their abilities to pay their workers, who are often poor and need the money to buy necessities for their families.

The report said the government should consider suspending or debarring contractors who fail to make appropriate payments to subcontractors, because it is a useful tool in getting action.