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Cablegate: Usaid Moscow Discusses Usg Contracting With

VZCZCXYZ0016
PP RUEHWEB

DE RUEHMO #0297 0411320
ZNR UUUUU ZZH (CCY AD20C13D AMG1856-695)
P 101320Z FEB 10
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6190
INFO RUCNAFG/AFGHANISTAN COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHBUL/AMEMBASSY KABUL 0715

UNCLAS MOSCOW 000297

SENSITIVE
SIPDIS
C O R R E C T E D COPY CAPTION
EMBASSY KABUL FOR USAID KABUL

E.O. 12958: N/A
TAGS: PGOV PREL RS AF
SUBJECT: USAID MOSCOW DISCUSSES USG CONTRACTING WITH
RUSSIAN OFFICIALS AND INDUSTRY

REF: HOOD-SAVAGE FEB 9 EMAIL

This information is Sensitive But Unclassified. Do not
release to Public Internet.

1. (SBU) February 3 USAID Moscow briefed GOR officials and
Russian business representatives on the USG contracting
process. They also discussed tenders in Afghanistan. The
presentation responded to requests from Russian officials who
frequently cite the experience then-Soviet workers gained in
Afghanistan as a potential contribution Russia could make to
the current effort to rebuild Afghanistan. Attendees
included representatives from the Russian Afghanistan
Business Council, the Ministry of Foreign Affairs
(Afghanistan Desk and Russia Cooperation Agency), Ministry of
Finance and the Ministry of Emergency Situations (EMERCOM),
as well as USAID-funded non-governmental organizations
(Center for Fiscal Policy, Institute for Urban Economics and
Russian Microfinance Center). Private companies such as
SojzVneshTrans, TechnoPromExport, ZarubezhTransStroi, and
Zarubezhstroi also attended.

2. (SBU) USAID's Acting Mission Director briefed the group on
the history and structure of USAID and USG foreign assistance
programs. USAID Moscow's Contracting Officer next spoke in
detail about USAID's project design and contracting
procedures. Participants were given a list of anticipated
USAID competitive contracting opportunities in Afghanistan
for FY2010, and names and contact information for USAID's
implementing partners in Afghanistan. The presenters also
described Embassy Kabul's and U.S. Forces Afghanistan's
"Afghan First" policy, which encourages local procurement of
Afghan goods and services to benefit and improve the
well-being of the Afghan people.

3. (SBU) Several representatives from Russian firms expressed
concern that they were disadvantaged bidding against
companies that already had a presence in Afghanistan. They
asked if the USG could facilitate their access to contacts
and information, including potential travel to Afghanistan,
to help them write bids that are more competitive. The
Contracting Officer indicated that this assistance was not
possible but did point out the potential benefits of
sub-contracting with companies who were currently working in
Afghanistan. She also remarked that forming consortium
companies was not prohibited. She noted that substantial
information was available online and that contact information
for each opportunity was provided on the FY 2010 contracting
forecast. The Contracting Officer also advised against
submitting unsolicited proposals, as it is difficult to meet
the standard for uniqueness and innovation necessary to make
such a proposal feasible under U.S. law.

4. (SBU) In response to a question on the ability of
government owned companies to bid on tenders, the Contracting
Officer referenced USG law which states that firms cannot be
wholly or partially government owned in order to participate
in a bid. The representative from the Russian Afghanistan
Business Council noted that this stipulation would make it
difficult for many Russian companies to compete because the
GOR retained a small percent ownership in many companies when
state companies were privatized in the 1990s. The
Contracting Officer noted that this question could be
referred to USAID lawyers for a formal opinion. The
Contracting Officer also reminded the group that in addition
to USG contracts, the Afghan government itself and
inter-governmental organizations such as the World Bank also
finance work in Afghanistan and operate under different
requirements.

5. (SBU) The representative from the Russian Afghanistan
Business Council presented a list of projects for which
Russian firms had specialized expertise because of their work
at these sites in the 1960s, 1970s and 1980s (reftel). On
the issue of the Salang Tunnel, participants said that the
Afghan government had indicated that further work on the
tunnel was needed. Additionally, Russian firms said they
already had plans and the capability to do the work. The
only issue remaining is funding.
Beyrle

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