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Military Contracting

Raw, Online

Yale School of Management
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Establishing a reliable supply chain to support the four-hundred-plus American military bases scattered throughout Afghanistan was considered by the U.S. military to be an eminently forbidding proposition. From March 2009 through September 2011, the U.S. military awarded contracts worth $2.16 billion to a group of companies to provide transportation for dry goods and fuel used by U.S. forces in Afghanistan. The so-called "Host Nation Trucking" (HNT) contract represented the eight prime contractors (two U.S. based, three Afghan, and three multi-national joint venture companies).

Under the Host Nation Trucking contracts, each contracting company was obligated to provide security services for its own deliveries. The extreme problems resulting from this arrangement first came to public attention in a feature in a 2009 article in The Nation entitled "How the US Funds the Taliban." According to the article, trucking companies and their local "security subcontractors" were paying off corrupt Afghan local officials and warlords in exchange for protection along supply routes. In some cases, the article alleged, the U.S. contractors were essentially sub-contracting security operations to the same insurgent groups the U.S. military was fighting.

The military and Congress undertook a six-month investigation into the allegations. A subsequent congressional report entitled "Warlord Inc.: Extortion and Corruption along the U.S. Supply Chain in Afghanistan" confirmed that through the Host Nation Trucking program, U.S. taxpayer money "fueled a vast protection racket run by a shadowy network of warlords, strongmen, commanders, corrupt Afghan officials, and perhaps others."

The corruption and contracting irregularities challenged military operations and the oversight provided by the military and by Congressional committees. Perhaps even more concerning was the observation initially described in the article in The Nation:

?"In any case, the main issue is not that the US military is turning a blind eye to the problem. Many officials acknowledge what is going on while also expressing a deep disquiet about the situation. The trouble is that–as with so much in Afghanistan–the United States doesn't seem to know how to fix it."

Published Date: 25/03/2016

Suggested Citation: Zachary Schlesinger and Jean Rosenthal, "Military Contracting," Yale SOM Case 16-012,  March 25, 2016

Keywords: Afghanistan, Supply chain