US Defense Secretary Robert Gates is concerned about possible misconduct in Afghanistan by the private security firm formerly known as Blackwater and has promised to review the issue, the Pentagon said.

Gates made the pledge to lawmakers after receiving a letter from Carl Levin, the chairman of the Senate Armed Services Committee, who urged the defense secretary to reconsider awarding a possible one billion dollar contract to the firm, now known as Xe, due to allegations of wrongdoing.

"He is looking into it and he takes it seriously," press secretary Geoff Morrell told reporters Friday.

Gates has told the senator that "he shares his (Levin's) concerns," Morrell said.

The letter dated February 25 and released publicly on Thursday notes that the Defense Department is reportedly preparing to give a contract to Xe for "highly sensitive work" to train Afghan national police, despite its controversial record in Iraq and amid fresh allegations of misconduct.

The letter cites a recent Senate hearing on a contract given to a Blackwater affiliate to provide weapons training in Afghanistan.

Levin's committee heard evidence that alleged that Blackwater may have used a front company for the contract, lied to Pentagon officials in its proposal documents, "misappropriated" government weapons, carried weapons without approval and hired staff with serious criminal records including larceny and substance abuse.

Blackwater's conduct may have "contributed to a shooting incident that has undermined our mission in Afghanistan," it added.

Levin has also written a letter to Attorney General Eric Holder in light of accusations that the firm gave false statements to the Justice Department.

While acknowledging concerns about Blackwater's conduct, Morrell said there were strict legal standards that applied to government contracts and that a company could not be excluded without adhering to the criteria.

He added that the firm had "technical expertise" that had to be taken into account for tasks that few companies were ready to take on.

"Like it or not, Blackwater has technical expertise that very few companies do have. And they have a willingness to work in places that very few companies are willing to work," he said.

Some Democratic lawmakers have called for banning the federal government and the US military from using subcontractors in combat zones, namely in Iraq and Afghanistan, where tens of thousands of troops are deployed.

The secretive Blackwater was thrown into the spotlight after five of its guards were accused of killing 14 unarmed Iraqis in a gun and grenade attack, and wounding 18 others during a September 2007 incident at the busy Nisur Square in Baghdad.

Earlier this month, Iraq expelled 250 former employees of the security firm.

The North Carolina-based firm lost its contract to provide security for US embassy diplomats in Baghdad in May 2009 after Iraqis and others repeatedly accused it of adopting a cowboy mentality to duties in the country.