- 1951 - 1966 (Creation)
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In September 1951, the issue of cost-sharing of the second infrastructure slice was temporarily resolved by the Ottawa Agreement entered into by the Council Deputies (see D-D(51)248).
In order to apply the Ottawa Agreement, amended slightly by the Committee on the Provision of Funds for the Second Slice of Infrastructure,
a Payments and Progress Subcommittee was created. Its terms of reference were set out by the Council Deputies on 5 December 1951 (see D-D(51)290-REV).
The Subcommittee was responsible for developing programme budgets approved under certain conditions (definition of the procedures for presenting the quarterly forecasts of the amounts required by the host nations, review of the status of programmes, review and approval of the quarterly forecasts that would serve as the basis for the payment of quarterly contributions). It was also responsible for centralizing and reviewing quarterly reports from the Commands and the national governments that contained information on the infrastructure programme, expenditures and the progress of work. It made the call for infrastructure contributions from the countries, opened the infrastructure accounts, handled central accounting, and monitored advance infrastructure contributions. It produced reports and appropriate recommendations for the guidance of governments. Finally, it was responsible for defining the final project cost accounting procedure and the method for making the necessary adjustments between countries.
The Subcommittee controlled such working groups as the Working Group on Utilities, the Subcommittee on the Review of Financial Reports and the Working Group on Overhead Costs and Tax Exemptions. It continued its work after 1966.
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The records of the AC/4(PP) chronological series supplement the documents of the Infrastructure Committee (AC/4). Although the same topics are addressed, the documents of the Infrastructure Committee’s Infrastructure Payments and Progress Subcommittee focus more on the practical aspects of projects.
• Financial aspects: To start with, this includes requests for authorization to commit funds to projects, plus the authorizations themselves, and requests for information from the host countries to expedite the reimbursement of costs or justify the work, delays or changes. The Subcommittee checked the eligibility for funding of the projects. Starting in 1956, lists of projects whose authorization had met with reservations from the NATO countries can be found. Cost reimbursement requests from the host nations are also in the series. The Subcommittee regularly issued a summary of the amounts that each country was to receive from or pay out to the others, and it summarized the status of infrastructure project commitments. Finally, the costs of certain projects were split among several infrastructure slices; the projects were therefore detailed and reports on overhead costs produced. In 1964, a document on the settlement of NATO’s basic accounts was produced.
The host countries and the Supreme Headquarters Allied Powers in Europe (SHAPE) issued a quarterly report on commitments and expenditure by infrastructure slice. Starting in 1960, those reports became half-yearly. Prices were taken into account, and the Subcommittee paid closer attention to rising prices in various countries. Reports on the unit prices of the materials needed to equip infrastructure projects were also produced.
The records also concern tax agreements with the United States, contributions in kind by certain countries, budgetary control, facility renovation projects and the financial impact of projects. With a view to saving money, the possibility of cancelling or postponing work was explored, as were fluctuations in the costs of projects, particularly when increases were involved.
The Subcommittee summarized the disparities between forecast and actual expenditure. The countries issued statements of savings achieved during projects.
• Procedures: From a more theoretical standpoint, procedures were reviewed for infrastructure contracting and the revision of those contracts, the international auditing of infrastructure accounts, and methods of payment. Consideration was given to the exchange rates to be used. Deviations from SHAPE standards were possible: specific procedures were applicable and the financial impact on infrastructure programmes was studied. In addition to producing standards, SHAPE gave its approval to ongoing projects. The Subcommittee also established procedures for international calls for bids, reports on the status of the contributions to be made for infrastructure projects and procedures for the approval of expenditures and quarterly financial reports.
The gradual declassification of documents was reviewed regularly.
• Works: The most commonly mentioned works pertain to airfields, communications, POL (oil) projects, electronic communications equipment, radio navigation aids, war headquarters, conversion programmes, utilities, ammunition depots, armaments (including surface-to-air and surface-to-surface systems), naval bases and ships. Activity reports on projects related to military training facilities are also included. Compliance with the rules on submitting calls for bids to international competition is mentioned, although the countries were allowed to request exemptions from ICB. The outcome of calls for bids was discussed in the Subcommittee. The impact of the new defence doctrine on programmes of work was addressed.
The Subcommittee reviewed the status of infrastructure projects by type of project and country. The issue of surplus materials was discussed.
Funds were also committed for security modifications to facilities, the renovation of ageing facilities and repairs of damage caused by works. The Subcommittee discussed the new defence doctrine and assessed the economic usefulness of the projects to the host nations as well as the cost of reimbursement to those countries. The projects were not all the Subcommittee examined: the provision of materials (office supplies, kitchen utensils, tools, etc.) was also addressed.
• Manpower: These records concern the payment and employment of manpower. The use of military manpower for projects was one of the matters addressed. In this area, issues related to offices (location, rental, construction, etc.) and accommodations feature prominently.
The Infrastructure Committee often made use of engineering firms and consultants to assess and plan projects. The Subcommittee discussed commitment of the funds required to pay their fees.