GAO

United States General Accounting Office

Report to the Chairman, Subcommittee 

on Readiness and Management Support, 

Committee on Armed Services, 

U.S. Senate

September 2000 CONTINGENCY 

OPERATIONS

Army Should Do More 

to Control Contract 

Cost in the Balkans

GAO/NSIAD-00-225

Page 1 GAO/NSIAD-00-225 Contingency Operations

Contents

Letter 3

Appendixes Appendix I: Scope and Methodology 28

Appendix II: Comments From the Department of Defense 30

Appendix III: Comments From Brown and Root Services 31

Appendix IV: GAO Contacts and Staff Acknowledgments 36

Tables Table 1: Total Contract Costs, Fiscal Years 1996-2000 9

Tables Figure 1: Selected Support Services Provided by BRS in Bosnia and 

Kosovo in Fiscal Year 1999 8

Figure 2: Camp Bonsteel Kosovo 10

Figure 3: SEAhut in Kosovo With 100-Percent Power Redundancy 15

Figure 4: Fiscal Year 1999 Support Costs: Bosnia and Macedonia 17

Figure 5: Fiscal Year 2000 Bosnia and Kosovo Support Costs, 

Through May 27, 2000 18

Abbreviations

BRS Brown and Root Services

DOD Department of Defense
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United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-285941 Letr

September 29, 2000

The Honorable James Inhofe

Chairman, Subcommittee on Readiness

and Management Support

Committee on Armed Services

United States Senate

Dear Mr. Chairman:

The U.S. military has relied on contractors to provide supplies and services 

in support of major contingencies since the Revolutionary War. In the past 

decade, however, deployed U.S. forces have increased significantly their 

dependence on contractors for support. In the Balkans, the primary 

contractor houses, feeds, and provides a range of other services to about 

11,000 troops and played a key role in building the base camps in Bosnia 

and Kosovo. The Department of Defense (DOD) has increasingly relied on 

contractors rather than soldiers to provide some services in the Balkans as 

force-level ceilings have been reduced, and contracts for support services 

represented over $2 billion of the more than $13.8 billion spent on Balkan 

operations through March 2000. Moreover, we have identified defense 

contract management as a high-risk area of government spending. Based 

on the magnitude of contractor costs and the need to ensure that services 

are provided as efficiently as possible, you asked us to determine whether 

there are opportunities to improve contractor utilization and reduce costs 

of Balkan operations without jeopardizing mission success. This report 

assesses whether (1) the Army is taking effective actions to contain costs 

and (2) improvements are needed in how the Army and other DOD 

agencies involved in Balkan operations manage activities under the 

primary Balkan contract. 

We focused our efforts primarily on the Balkans Support Contract because 

it is the largest contract for services to U.S. forces, representing about

$2.2 billion in contract costs spent in the Balkans since December 1995. 

The Balkans Support Contract is a cost reimbursement performance-based 

contract that sets desired results and allows the contractor, Brown and 

Root Services (BRS), considerable flexibility in determining how best to 

provide the services the Army requests. We performed our work from

July 1999 through September 2000. Appendix I describes our scope and 

methodology in more detail.
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Results in Brief Both the Army and its contractor, Brown and Root Services, have taken 

various actions to control the cost of services provided under the Balkans 

Support Contract. These actions include a contract provision requiring the 

contractor to regularly identify cost savings, recycling materials from 

elsewhere in the Balkans and Europe, and using soldiers to perform tasks 

such as building construction whenever possible. Nevertheless, the Army 

should have done more to control costs. One step it should have taken was 

to give more consideration to costs in making decisions on the extent of 

services to be provided by the contractor. For example, it allowed the 

contractor to provide 100-percent redundancy (i.e. backup) in power 

generation for all the U.S. facilities in Kosovo, although only critical 

operations such as the command center and the hospital require 

uninterrupted power. Another step the Army should have taken was to 

place greater emphasis on the level and efficiency with which recurring 

services were being provided. For example, Army officials in Bosnia and 

Kosovo believe that the contractor has too many local national personnel 

for the work to be done and as a result some employees appear to have a 

lot of idle time. In July 2000, the Army directed that a quarterly review be 

conducted to assess whether all the services it receives under the contract 

are still needed. However, it has not called for the review to include an 

examination of the level of these services and the efficiency with which 

they are being provided. The Army has also directed that standards be 

developed for each service provided at its camps, but as of July 2000 had 

not set a date for the standards’ completion. Each standard is to describe 

the service to be performed, the necessary facilities and personnel, when 

and how the services are to be performed, and the level at which they are to 

be performed. The Army plans to achieve efficiencies in the level of 

services and the way in which they are provided by mandating that officials 

in Kosovo and Macedonia identify $40 million in cost savings for fiscal 

year 2001. The Army expects costs to be reduced by this amount by 

reducing the number of contractor personnel providing services, scaling 

back service levels, and reducing on-hand inventories.

The Army should improve its management of the Balkans Support 

Contract. Because cost reimbursement performance-based contracts are 

relatively new and provide great latitude in how a contractor provides 

requested services, many Army and other Defense Department personnel 

involved in administering the contract are uncertain about their authority 

under this type of contract. As a result, officials at facilities in the Balkans 

have not been as specific as they should have been about what they expect 

from the contractor. Moreover, they frequently have simply accepted the 
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level of services the contractor provided without questioning whether they 

could be provided more efficiently or less frequently and at lower cost. We 

found a widespread view among Army and other Department of Defense 

agencies’ officials in the Balkans that they had little control over the 

contractor’s actions once it was authorized to perform tasks. There was a 

widespread desire on the part of personnel administering the contract for 

more training on the government’s authority and on how to apply the 

contract in real-world situations. Furthermore, key personnel involved in 

administering the contract are on rotation schedules, so they all arrive and 

leave at about the same time, and they deploy for relatively short periods—

6 months on average. This does not allow continuity in the contract’s 

administration and hinders effective contract oversight.

We are recommending that the Army evaluate the level and efficiency of 

services being provided as part of its newly directed quarterly review of 

which recurring services are still needed; set a target date for completing 

standards for the services it receives; develop a more extensive training 

program for contract administration personnel; and in conjunction with the 

Defense Contract Management Agency, take steps to improve continuity in 

administering the contract. In written comments on a draft of this report, 

the Department of Defense agreed with our recommendations. Brown and 

Root also provided written comments, mostly to clarify its position 

regarding contract activities in the Balkans.

Background U.S. forces in the Balkans have relied heavily on contractors since 

operations there began in December 1995, and reliance on contractors has 

grown over the past several years, as U.S. force levels have declined. Troop 

ceilings since the onset of Bosnia operations have been lower than the 

number of troops the Army calculated that it needed and have steadily 

declined, from an initial level of 20,000 to 4,400 in July 2000. As troop levels 

have declined, some support functions performed by soldiers have been 

shifted to contractors. The Army contracts with more than 100 firms to 

obtain needed goods and services in the Balkans. The largest single 

contract is the Balkans Support Contract. BRS is the contractor for the 

support contract, which provides a wide array of logistics and engineering 

services support for U.S. forces throughout the theater of operations. The 

theater of operations encompasses Bosnia, Kosovo, and Macedonia, as well 

as other Balkan countries, and Hungary, which has been used as a staging 

base for U.S. forces in Bosnia. The bulk of the approximately 11,000 U.S. 

military personnel deployed in support of Balkan operations as of July 2000 

were in Kosovo (5,600) and Bosnia (4,400).
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The Balkans Support Contract is the latest iteration of a contractual 

arrangement for logistics and engineering services related to contingency 

operations that predates the deployment of U.S. forces to the Balkans. In 

1992, the Army conducted a competitive selection for an umbrella support 

contract for military contingency operations under its Logistics Civil 

Augmentation Program.1

 BRS was selected as the contractor. When U.S. 

military forces deployed to Bosnia in December 1995, the Army decided to 

use this contract to build base camps and provide services for its forces. 

When this contract expired in 1997, the requirement was again the subject 

of a competitive selection process, and the Logistics Civil Augmentation 

Program contract was awarded to a different company.2

 However, rather 

than use this contract, the Army elected to award a separate sole-source 

contract to BRS to continue providing services in the Balkans. Its 

justification for the sole-source contract was that (1) BRS had already 

acquired the knowledge of how to operate within the laws and regulations 

of the countries in which it was providing support, (2) BRS had 

demonstrated the ability to support the operation, and (3) changing 

contractors would have generated additional costs for activities such as 

personnel duplication required for the transition between contractors. On 

the basis of this justification, the Army awarded BRS a sole-source contract 

for Balkan support through May 1999.3

 In early 1999, the Army conducted a 

competitive selection for a new Balkans support contract. BRS was 

selected as the contractor, and in February 1999 a new contract was signed, 

effective May 1999, for what is now termed the Balkans Support Contract. 

The contract is for a 1-year base period with options for 4 additional years. 

The Balkans Support Contract, like BRS’ earlier contracts in the Balkans, is 

a cost reimbursement performance-based contract. Under such contracts, 

the government does not provide detailed specifications and work 

descriptions. Functions to be performed by the contractor are typically 

articulated in the contract’s statement of work as results required rather 

than methods of performance of the work. For example, the Balkans 

Support Contract requires the contractor to perform functions such as 

1

 Under this program, a civilian contractor provides logistics and engineering services to 

deployed forces.

2

 The current Logistics Civil Augmentation Program contractor, DynCorp, provides services 

elsewhere under this program, including support to U.S. troops in East Timor.

3

 The justification was approved by the Assistant Secretary of the Army for Research, 

Development, and Acquisition.
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providing 24-hour food service operations and operating a vehicle 

maintenance section for tactical and non-tactical vehicles. These types of 

work statements give the contractor freedom to use the latest commercial 

practices and techniques to meet requirements successfully. 

The Balkans Support Contract calls for BRS to deliver a wide array of 

services throughout the Balkans, including food preparation and service, 

laundry, logistics support such as local transportation, building large 

portions of the base camps in Kosovo, and performing other construction 

as directed by the Army. Figure 1 illustrates the proportion of services the 

Army requires that are being provided by BRS. Once a continuing service 

such as food preparation and service is authorized, it is called recurring 

work and requires no further approval. Work that has not been previously 

authorized, from the initial construction of base camps in Bosnia and 

Kosovo to one-time tasks such as erecting tents, is called new work.
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Figure 1: Selected Support Services Provided by BRS in Bosnia and Kosovo in Fiscal Year 1999

Source: Our analysis based on BRS data.

The estimated cost for BRS to provide support to U.S. forces in the Balkans 

since their deployment in December 1995 through fiscal year 2000 is

$2.2 billion. Under the contract, the Army reimburses BRS for allowable 

direct costs incurred to support the force. Payments to BRS also include 

(1) a base fee of 1 percent of the estimated contract cost, (2) an amount to 

cover overhead and general and administrative costs, (3) the cost of capital 

money used before cost reimbursement is made, and (4) an award fee of up 

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Construction

Maintenance

Food service

Laundry

Water

Fuel

Heavy equipment

transport

Sewage

Hazardous

material

Mail
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to 8 percent of the cost estimate for each award period based on assessed 

performance. The base fee and award fee constitute BRS’ profit. The Army 

has awarded BRS the full award fee for five award periods since the 

contract was awarded in May 1997, 99 percent for two periods, and 

98 percent for one period. BRS contract costs, by year, are shown in table 1. 

Table 1: Total Contract Costs, Fiscal Years 1996−2000

Note: For fiscal years 1996-98, the table includes costs in Bosnia, Hungary, Croatia, and Macedonia; 

for fiscal years 1999-2000, the table also includes costs in Kosovo and Albania.

a

The large increase in costs in fiscal year 1999 is due to the beginning of Kosovo operations, which 

involved significant construction continuing into fiscal year 2000.

As shown in table 1, the cost of contractor support in the Balkans is in the 

hundreds of millions of dollars annually. The initial construction of the base 

camps in Kosovo is an example of some of the factors affecting the cost of 

the contract. Building the camps in 1999 cost approximately $230 million 

and is part of the costs in table 1. The larger of the two base camps, Camp 

Bondsteel, was designed to accommodate 5,000 people and required the 

Army and BRS to build the equivalent of a small town in a wheat field in a 

few months. It involved creating an infrastructure of roads, power 

generation capacity, and water and sewage systems; housing and work 

facilities for the soldiers and contractors; miscellaneous facilities, 

including a helicopter airfield and a detention center; and extensive force 

protection measures, including a perimeter fence and guard towers. (See 

fig. 2.) 

(Dollars in millions)

1996 $ 423.5

1997 154.2

1998 198.7

1999 (estimated) 931.6a

2000 (estimated) 460.0

Total $2,168.0
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Figure 2: Camp Bondsteel, Kosovo

A number of Army and DOD agencies have responsibilities under the 

Balkans Support Contract. These include (1) the Army Corps of Engineers, 

which awarded the initial contract in 1992 as well as the subsequent 

contracts and continues to administer the contract and provide the 

Principal Contracting Officer; (2) U.S. Army Europe, which develops 

theater policies and procedures and approves all new work in the Balkans 

that costs $100,000 or more; (3) the Defense Contract Management Agency, 

which provides quality assurance specialists, property administrators, and 

contract specialists to monitor the cost of services incurred under the 

contract; (4) the Defense Contract Audit Agency, which validates the 

accuracy and completeness of BRS’ cost accounting systems and performs 

audits of incurred costs; and (5) Army Task Force commanders at various 

locations in the Balkans—including Bosnia, Kosovo, and Macedonia—who 

manage and coordinate contractor performance and approve all new work 

costing less than $100,000. 
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The Army Has Taken 

Steps to Control Costs 

but Could Do More in 

Managing the Balkans 

Support Contract

Both the Army and BRS have taken numerous actions to control costs 

under the contract. However, more could be done to fully consider costs. 

We found that the Army

• has taken steps to control costs but has not always been fully 

successful,

• has not always adequately considered the cost ramifications of some 

decisions, and

• is exercising minimal control over the costs of many recurring services.

While the Army is satisfied with the overall responsiveness and quality of 

BRS’ work, the number of instances we identified suggests that cost was 

not given sufficient attention in decision-making until recently. In July 2000, 

the Army directed that a quarterly review of services be conducted to 

ensure that services being provided are still needed.

Army Considers Cost 

Control Important and, With 

BRS, Has Taken Some 

Actions to Reduce Costs

The Army has repeatedly emphasized the importance of controlling costs. 

In meetings with us on a number of occasions over the past several years, 

senior Army officials in Europe have repeatedly emphasized the 

importance of stewardship of the government’s resources in the Balkans. In 

guidance to commanders in the Balkans, U.S. Army Europe recently 

reiterated the need to control costs. It has also established an internal audit 

group in its command center in Kosovo to help in controlling costs and 

ensuring efficient operations. Moreover, one criterion the Army uses to 

assess BRS’ performance in determining the award fee is cost control and 

funds management.

Both the Army and BRS have made efforts to reduce costs. These efforts 

include using military personnel to perform construction where possible 

and reusing building material. For example, in documentation prepared for 

us in May 2000, the Army stated that Navy SEABEES participated in the 

construction of Camp Montieth in Kosovo, at an estimated saving of

$5 million in labor costs. In Kosovo, we saw soldiers performing some of 

the construction of bomb shelters. BRS has reused material from camps 

that were being closed for construction at other camps. For example, BRS 

reported reusing $264,700 in lumber and $335,715 in concertina wire, a 

form of barbed wire, in Bosnia in 1998-99. It also erected temporary 

buildings owned by DOD and transported them to the Balkans from 

elsewhere in Europe. In a May 2000 memorandum on BRS performance, 

Army officials reported that BRS was reusing energy efficient sodium lights 
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to replace high-maintenance halogen lights and was working to reduce 

energy requirements, citing a shift at one facility from generators to 

commercial power. This latter action is expected to reduce costs by about 

$46,000 a year.

The Army and BRS have also worked collaboratively to reduce costs. For 

example, they worked together on construction plans for the vehicle wash 

facility that is being built at Camp Bondsteel. Army engineers suggested 

changes to the facility that reduced needed concrete by 3,000 cubic meters. 

BRS made the change, which saved $150,000. BRS officials in Kosovo said 

that they also recommended other changes, specifically to reduce the 

number of wash points, to reduce costs.

To help control costs, the Army also has a review process in place to 

determine whether new work requested by commanders is valid and who 

should perform that work. In Bosnia, Kosovo, and Macedonia, the Army 

uses a Joint Acquisition Review Board to validate the need for all new work 

estimated to cost more than $2,5004

 (lower level officials review and 

approve work estimated to cost $2,500 or less). The Board is also charged 

with determining whether work that it approves will be performed by 

soldiers, BRS, or other contractors or through host nation support. Work 

estimated to cost $100,000 or more must be approved at Army headquarters 

in Europe once the board has validated the need for such work. The Board 

also receives an independent cost estimate (when data are available) to 

assist in deciding who will perform the work. In its more recent March 2000 

guidance on contingency operations financial management, U.S. Army 

Europe encouraged commanders to be extremely prudent in managing 

contingency operation funds. It also instructed the Board to determine the 

lowest cost option to accomplish the mission. 

The Army, however, has faced various challenges in controlling costs. The 

transfer of fire-fighting services from Army personnel to BRS is an example 

of one such difficulty. The Principal Contracting Officer is responsible for 

authorizing BRS to perform new tasks. In June 1999, the Officer authorized 

BRS to plan fire-fighting services in Bosnia, Kosovo, and Macedonia. In 

September 1999, Army officials began questioning the basis for BRS’ 

fire-fighting plan, which called for a total of 116 people, to include 

4

 The Joint Acquisition Review Board consists of representatives from the logistics, 

engineering, operations, resource management (budget), and contracting staffs as well as 

the “camp mayor” and the chief of the Base Camp Coordinating Agency. 
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firefighters and associated administrative and maintenance personnel. U.S. 

Army Europe officials believed that the number of firefighters and fire 

engines was larger than required for the mission. The Commander of Camp 

Able Sentry, Macedonia, wrote U.S. Army Europe and BRS officials to 

express his concern that no one in his command was consulted about firefighting requirements and that the base was not big enough to support the 

number of firefighters and fire trucks planned by BRS. In October 1999, the 

Deputy Chief of Staff for Engineering at Army Headquarters Europe 

questioned BRS’ fire-fighting plan and asked the Contracting Officer to stop 

the contractor’s efforts until he could certify BRS’ plan. During the next

3 months, the debate over personnel and equipment requirements 

continued. BRS revised its plan in a manner that reduced the number of 

firefighters to 77. The Army’s engineers concluded that no more than

66 firefighters were required. They also continued to disagree with BRS’ 

fire station design because they felt it exceeded needs. In February 2000, 

despite lack of resolution of the difference between the contractor’s 

fire-fighting plan and what Army engineers stated was needed, U.S. Army 

Europe’s Deputy Chief of Staff for Logistics said that he believed the two 

sides were close enough for him to decide to go forward and directed the 

Principal Contracting Officer to authorize BRS to proceed with its plan. 

We discussed this matter with BRS in May 2000 and with the Principal 

Contracting Officer in June 2000. BRS officials said that their plan included 

additional work hours related to a civilian workforce and the need to train 

a local civilian fire-fighting force as compared to the Army’s plan, which 

would have used its own trained firefighters. They also said that their plan 

provided an improvement over the Army’s capability to respond to fires. In 

July 2000, BRS further advised us that the dispute centered around 

differences between what the Army does to fulfill its fire-fighting mission 

and what commercial/municipal firefighters do. The Principal Contracting 

Officer told us that he felt that it was necessary to make a decision and 

bring this matter to closure, even though some differences remained 

unresolved.

Cost Was Not Always 

Considered in Making 

Decisions on New 

Requirements 

Prudent management requires that alternatives be considered when 

making decisions. We identified several examples of actions taken by the 

Army where there is no evidence that cost was taken into consideration 

when decisions were made, including in building the base camps in 

Kosovo. In fact, some of the same problems we identified in our February 

1997 report on Army management of contractor support in Bosnia in 1996, 

such as that commanders were sometimes unaware of the cost 
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ramifications of their decisions, emerged in Kosovo.5 While we recognize 

the importance of quickly deploying and properly caring for U.S. personnel 

in the Balkans, we believe that more consideration could be given to costs.

One example involved the level of power generation redundancy

(i.e. backup power) needed in Kosovo. Due to the lack of a reliable source 

of commercial power in Kosovo, the Army directed BRS to install power 

generators when building the base camps there in 1999. BRS purchased 209 

generators for $5.8 million and leased an additional 96 at a monthly cost of 

$1.04 million that together provide for 100-percent redundancy of power 

generation needs. From July 1999 to July 2000, BRS spent $12.9 million on 

the leased generators, which have a greater power output than those 

purchased. BRS officials told us that they had discussed with task force 

officials in Kosovo how much power generation redundancy to have and 

whether to lease generators. When the issue of redundancy levels arose in 

June 1999, BRS requested that task force officials provide the Army’s 

priority for power use if the Army did not want 100-percent redundancy. 

BRS said that the Army did not provide a priority, and by default, BRS 

proceeded with 100-percent redundancy, which it described as the best 

business practice. There is no record of why the Army did not provide a 

priority list for power use or whether it explicitly wanted 100-percent 

redundancy; however, Army officials involved in administering the contract 

with whom we met in Kosovo in May 2000, including engineers and 

contract administrators, told us that there was too much generator 

capacity and that much less redundancy was needed. According to these 

officials, while 100-percent redundancy is important for some facilities, 

such as the headquarters and the hospital, other facilities such as the 

barracks, called SEAhuts, could go without power for several hours 

without potentially serious consequences. (See fig. 3.)

5 Contingency Operations: Opportunities to Improve the Logistics Civil Augmentation 

Program (GAO/NSIAD-97-63, Feb. 11, 1997).
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Figure 3: SEAhut in Kosovo With 100-Percent Power Redundancy

The matter of how much leased generator capacity to maintain appeared to 

be nearing conclusion in September 2000. According to the Army and BRS, 

a generator consolidation plan has been implemented that will result in 38 

generators being returned to the vendor in October 2000. According to the 

Army, an additional 10 generator sets will be phased out during the 

implementation of the power generation plan. The remaining 48 leased 

generators will be purchased in order to avoid high leasing costs. The Army 

expects this plan to be complete by April 2001 and to result in $85 million in 

savings over 5 years, based on a comparison of the cost of purchasing the 

generators versus continuing to lease them. Terminating the leases on 38 

generators will produce annual savings of about $5.1 million. 

Costs associated with personalizing the camps as new units arrive were 

also not fully considered. There have been nine major rotations by U.S. 

Army divisions into Bosnia since U.S. forces first deployed there in 

December 1995. Incoming units typically add tasks for the contractor to 

perform during the rotation, as one major unit leaves and another unit 

moves in to replace it. These tasks include putting up new signs with the 

new unit’s insignia, renaming streets, and rearranging office space. Even 
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though 49th Armored Division personnel emphasized that they had 

attempted to hold down the number of changes made to personalize the 

base camps compared with other units that had previously rotated to 

Bosnia, we found that work orders more than doubled, from 53 in February 

2000 to 134 in March 2000, before declining to 90 in April 2000. Service 

requests also increased substantially, from 438 in February 2000 to 713 in 

March 2000, and then declined to 328 in April 2000. To reduce the number 

of personalized changes in the future, U.S. Army Europe is working to 

develop a common camp design and unit-neutral signs. U.S. Army Europe 

officials said that in discussions with the commander of the 3rd Infantry 

Division, which is scheduled to deploy to Bosnia in September-October 

2000, they have emphasized that there should be no new work tasked to 

BRS for camp changes.

We also found examples in which the Army did not adequately review 

whether some purchases were properly matched to requirements, resulting 

in unnecessary expenses. For example, while the SEAhuts were being built 

in Kosovo, the Army spent millions of dollars on furniture purchases that 

did not involve the Balkans Support Contract. The Task Force in Kosovo 

had an internal audit group, which reported that the Army purchased 

$5.2 million in furniture for the SEAhuts in Kosovo. The internal auditors 

reported that some of the furniture potentially will not be utilized for its 

intended purpose of living quarter furniture because adequate space is not 

available in the SEAhuts. The internal auditors said that as a result the 

furniture will be either stored on premises, where space is a premium, or 

shipped to another location, incurring additional unknown costs. In 

addition, the internal auditors reported that because furniture was shipped 

before the SEAhuts were completed, some delivered furniture had to be 

moved at least twice, resulting in undetermined costs in addition to costs 

under the support contract for processing, assembling, and installing 

furniture estimated at $377,000. The internal auditors’ report concluded 

that future bulk purchases should be reviewed by a task force central 

activity to determine reasonableness and ensure that the requester 

adequately calculated and documented requirements.

The Army Has Not 

Routinely Reviewed the 

Level of Recurring Services 

Once initial construction of the base camps is complete, the large majority 

of contract costs are for what are termed recurring services. These are 

services provided on a regular basis that include food preparation, laundry, 

waste disposal, local transportation, fire-fighting, the operation of 

recreation centers, and vehicle washing. In addition to recurring costs, 

there are costs for one-time services, called new work. Although the Army 
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has a process in place to review new work, until July 2000 it had no process 

to examine recurring services. However, this new process for assessing 

recurring services is limited. Even though there is no requirement under 

the Balkans Support Contract that the Army review the level of services 

and how they are provided, the Army is responsible for monitoring and 

managing functions performed by the contractor and for providing quality 

control oversight of the contractor’s services.

In Bosnia and Macedonia, recurring work in fiscal year 1999 accounted for 

77 percent of $152 million in total costs under the support contract. For the 

part of fiscal year 2000 for which data are available (through May 27, 2000), 

recurring services accounted for 93 percent of $118 million in total contract 

costs in Bosnia and Macedonia and 92 percent of $112 million in total 

contract costs in Kosovo, as shown in figures 4 and 5.6

Figure 4: Fiscal Year 1999 Support Costs: Bosnia and Macedonia 

6

 During fiscal year 1999, the percentages of recurring services and new work were the 

opposite in Kosovo because the base camps were being built. Seven percent of support 

costs were for recurring services, while 93 percent were for new work (camp construction).

Bosnia and Macedonia

New work

Recurring services

23%

77%
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Figure 5: Fiscal Year 2000 Bosnia and Kosovo Support Costs, Through May 27, 2000

The Balkans Support Contract contains a long list of services that are to be 

performed in each country it covers. For example, among the services to be 

performed in Bosnia are the daily collection, removal, and disposal of 

trash, food, septic waste, and medical waste materials. The contract also 

directs 24-hour food service operations, including preparing three meals a 

day using government-furnished food and providing limited food service 

during non-meal hours. There is no further definition of the services. BRS 

sets the level of services and the number of employees necessary to 

provide these services on the basis of its judgment of what constitutes good 

business practices. Army and other DOD officials have typically accepted 

BRS’ judgment and not questioned the level of services being provided. On 

the whole, officials throughout the Balkans are very satisfied with the 

quality of services provided at the base camps, although many officials 

acknowledged that the level of some services may be above and beyond 

what is really needed. 

Because military personnel serve in the Balkans on a rotational basis for an 

average of about 6 months, there is little institutional memory on the part 

of DOD personnel as to why services are provided at their current levels. 

Incoming military personnel simply accept the existing levels. DOD 

officials with whom we met in the Balkans told us that they could not 

93%

7%

92%

8%

New work

Recurring services

Bosnia and Macedonia Kosovo
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explain the frequency of services being provided, such as cleaning some 

offices as many as four times a day, cleaning latrines three times a day, and 

conducting routine construction and maintenance activities 24 hours a day. 

BRS also controls the size of the support workforce it uses to deliver 

services to the Army. The Army could not explain the basis for the number 

of contractor personnel involved in providing services, although some 

Army and other DOD officials said that local national contractor employees 

seemed to have too much idle time. For example, in a May 2000 

memorandum to the chief of staff of the Army division deployed in Bosnia, 

the Commander of the Engineer Brigade in Bosnia wrote that contractor 

crews working at construction sites and other work areas were not 

efficient. The Commander further wrote that 85 percent of the projects 

observed had excessive crew size and that half of these crews had at least 

40 percent of their members not engaged in work. In addition, the 

Commander wrote cleaning services were so overstaffed that employees 

had been observed taking several long breaks a day because they had 

finished all their work. In discussions with us on whether work crews had 

idle time, BRS officials said that this was not the case and cited the need to 

closely supervise workers for security among the reasons why employees 

did not seem to be busy all the time. They also pointed out that due to 

prevailing wage rates, local hires are inexpensive. Nevertheless, as of May 

2000, the Army had not examined whether the size of the workforce was 

appropriate for the amount of work that was being done, despite the 

expressed concerns of numerous Army and other DOD officials with whom 

we spoke in the Balkans. 

In June 2000, the Army Corps of Engineers, which has a key role in the 

administration of the contract, sent its own personnel to the Balkans to 

assess services and suggested that the level of some services might be cut 

back. According to Corps officials, the senior commander in Kosovo 

rejected the idea of reducing the level of any services for fear that this 

might adversely impact soldier morale or the quality of life. 

U.S. Army Europe Has 

Recently Taken Additional 

Actions to Control Costs

The Commanding General of U.S. Army Europe is concerned about the cost 

of Balkan operations and is seeking to reduce costs, including those 

incurred under the Balkans Support Contract. On July 7, 2000, the U.S. 

Army Europe Chief of Staff issued a memorandum to task force 

commanders and staff elements involved in Balkan operations on 

monitoring and controlling the Balkans Support Contract. In the 

memorandum, the Chief of Staff stated that deployed commanders’ senior 
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staff, the contracting officer, U.S. Army Europe staff principals, the 

Defense Contract Management Agency, and the Defense Contract Audit 

Agency all have a shared responsibility to ensure that the Balkans Support 

Contract is managed and that costs are controlled. The memorandum 

directs three actions to ensure that the Army acquires from the contractor 

only what is really needed:

• Deployed unit commanders and U.S. Army Europe staff must validate 

and approve only requirements to be performed by the contractor that 

are truly needed or mission essential. This applies to new work and the 

addition of new services to the contract.

• Deployed commands must provide staff to augment the Administrative 

Contracting Officer upon request. These staff are to assist in ensuring 

that the contractor is performing the tasks it has been directed to 

perform.

• Each deployed command and U.S. Army Europe staff component must 

conduct quarterly reviews of ongoing recurring services being 

performed by the contractor to ensure that only essential services are 

demanded.

The memorandum does not address whether the level of services and the 

efficiency with which they are provided should also be examined.

To provide additional incentives to reduce costs, senior U.S. Army Europe 

budget officials told us that they intend to mandate that officials in Kosovo 

and Macedonia identify $40 million in cost savings for fiscal year 2001. Task 

force commanders and the contractor will have to determine how to 

reduce the cost of services to achieve these cost savings. According to

U.S. Army Europe officials, BRS has a goal to reduce the contract cost by 

$20 million in fiscal year 2001 by replacing some highly paid expatriate 

workers (those from other countries such as the United States) with local 

workers, who have a lower prevailing wage scale, reducing the manning at 

dining facilities, and reducing on-hand inventories. Task force commanders 

will be responsible for identifying ways to reduce service levels and/or find 

efficiencies in delivering services to achieve the remaining cost reductions.

In discussing this matter with Defense Contract Management Agency 

personnel involved with the contract, we were told that the current level of 

services and the cost of support for U.S. forces is the subject of an ongoing 

dialogue. They told us that the government needs to do a systemic review 

of whether BRS is operating as efficiently as possible under the support 

contract and that they have suggested that personnel qualified to make 
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such an assessment be assigned to their Balkan team. These officials also 

believe there needs to be more rigor in the government’s oversight of BRS 

and that another DOD agency involved in the contract’s oversight, the 

Defense Contract Audit Agency, could be helpful in this regard.

Finally, in documentation prepared for us in May 2000, U.S. Army Europe 

stated that it had directed its staff directorates, such as logistics, to develop 

a long-term Balkan base operation strategy. The aim is to determine a base 

operation standard for each service required to be performed for a 

deployed force. Each standard is to describe the function to be performed, 

the necessary facilities and personnel, when and how services are to be 

performed, and the level at which they are to be provided. As of July 2000, 

U.S. Army Europe officials said that there was no target date for the effort’s 

completion. 

To foster competition, U.S. Army Europe is also exploring whether some 

functions now being performed under the support contract can be 

contracted separately to contractors other than BRS. For example, 

barracks renovation at a base in Hungary that is being used to support U.S. 

forces in Bosnia is being done by a local Hungarian firm rather than by 

BRS. U.S. Army Europe also intends to break out some of the services now 

being performed in Macedonia under the support contract and allow the 

Joint Contracting Center to contract for them to see if they can be obtained 

for the same or less money. As of July 2000, no target date had been set for 

implementing this effort.

Lack of Understanding 

of the Balkans Support 

Contract Hinders 

DOD’s Oversight 

Effective oversight of the Balkans Support Contract is being impaired 

because (1) there is confusion over the government’s authority under the 

contract, (2) personnel assigned to contract oversight roles in the theater 

have not been trained sufficiently, and (3) frequent personnel rotations of 

short duration preclude continuity of oversight efforts. 

Confusion Over the 

Contract Has Hindered Cost 

Containment

Notwithstanding pre-deployment training on the contract, deployed Army 

and other DOD officials responsible for the Balkans Support Contract 

generally agreed that there is a lack of understanding of the government’s 

authority under the contract. Engineers, logisticians, and administrative 

contracting officers among the Army and other DOD officials with whom 

we met in the Balkans and elsewhere had little previous experience with 

cost reimbursement performance-based contracts. Army and DOD officials 
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deployed in the Balkans between 1998 and 2000 had the widespread view 

that because the support contract is performance-based, they have little 

control over the contractor’s actions once the contractor is authorized to 

perform a task. Although the contract allows the Army and other DOD 

officials to leave all performance details to the contractor’s judgment, it 

does not preclude them from providing the contractor detailed direction. 

According to Army Corps of Engineers lawyers involved with the contract, 

the government can be as prescriptive as it wishes to be in managing the 

contract. For example, in shifting fire-fighting to BRS, the Army could 

either provide detailed specifications of the design of the fire stations BRS 

is to build or leave all the details up to BRS. Although there is still 

disagreement within the Army about the design of fire stations to be built 

by BRS in the Balkans, the officials responsible for administering the 

contract have allowed BRS to proceed with its design. BRS officials 

repeatedly expressed the view that because the company’s award fee is 

based in part on DOD’s satisfaction with BRS’ performance, clear 

expectations of the services BRS is to provide are in the company’s best 

interest.

The lack of understanding of the government’s authority under the contract 

on the part of some government officials involved in administering the 

contract creates confusion over the roles of the government and the 

contractor. In December 1999, the Administrative Contracting Officer at 

Camp Montieth, Kosovo, was instructed to issue a notice to BRS to proceed 

with the construction of a tent to be used as the post office. Because the 

independent government estimate for this construction was $6,000, the 

contracting officer placed a $10,000-construction limit in the notice to BRS 

in an effort to moderate cost growth. When the Lead Administrative 

Contracting Officer at Camp Bondsteel, Kosovo, became aware of this 

limitation, he sent an electronic message to the officer at Camp Montieth, 

in effect stating that BRS is the Army’s customer and that such funding 

limitations affect the Army’s relationship with the customer. In fact, it is the 

Army who is the customer under the Balkans Support Contract.

The extent of the confusion that exists regarding the contract is evidenced 

by the results of a conference held in April 2000 to improve the partnership 

between all parties involved with the contract, including the contractor. 

Conference participants included representatives from all the government 

parties involved in administering the Balkans Support Contract—U.S. Army 

Europe, task force representatives, the Corps of Engineers, and the 

Defense Contract Management Agency—and the contractor, BRS. At this 

conference, participants expressed their views on a variety of topics, 
B-285941

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including how well the contract was being managed and the contractor’s 

performance. Participants cited the need for more uniform guidance from 

contract managers, oversight continuity problems caused by frequent 

personnel rotations, and the need for contract personnel to be more 

knowledgeable of the contract, among other things.

Additional Training Is 

Needed to Eliminate 

Confusion

Army officials responsible for contract oversight in Bosnia, Kosovo, and 

Macedonia cited the need for more preparatory training. Recognizing the 

need to increase training for contract oversight officials, the Army initiated 

a new program in December 1999 for 49th Armored Division staff before 

deployment to Bosnia. During the mission rehearsal exercises preceding 

deployment, division staff were briefed by the Army Corps of Engineers 

and the Defense Contract Audit Agency on the uniqueness of sustaining a 

force in the Balkans, on basic information about the contract, and on the 

contractor’s responsibilities. The staff said that the training was useful but 

that more training was needed on the government’s authority and on how 

to apply the contract in real-world situations.

Although incoming personnel observe their outgoing counterparts for a 

short period, and personnel receive some training before they deploy, task 

force and contract administration officials said that this was inadequate. 

This is especially true for the personnel with contract oversight 

responsibilities as a second job. For example, the camp mayor7

 at the main 

base camp in Bosnia in May 2000 was an artillery officer with no 

contracting background. He said that he received no training on his 

responsibilities as mayor and how to carry them out. Yet, he was 

responsible for coordinating the contractor’s maintenance program at the 

camp.

The use of a cost reimbursement performance-based contract in the 

Balkans also requires contracting personnel who are accustomed to 

monitoring fixed-price contracts to adjust their paradigms in order to use 

the contract effectively. Many personnel assigned to the Balkans have 

never worked with this type of contract and, other than those from the

49th Armored Division who received some pre-deployment training, 

received little or no training on it. Therefore, they have a limited 

understanding of the government’s role under such a contract.

7

 The camp mayor is an Army officer responsible for authorizing routine maintenance and 

projects estimated to cost less than $1,000 performed under the Balkans Support Contract.
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The need for training is not new. In our previously cited February 1997 

report on Army management of contractor support in Bosnia during 1996, 

we reported that some key logistics planners for the Bosnia operation had 

little knowledge of or experience with the contract (a very similar 

predecessor of the current contract) prior to the operation. We also 

reported that despite significant efforts to manage the contract effectively, 

U.S. Army Europe officials’ inexperience and lack of understanding of the 

contract, the contractor’s capabilities, and program management created 

problems during deployment and resulted in unnecessary costs. We 

recommended at that time that commanders be trained to use the contract 

and that training include information on contractor capabilities and roles 

and responsibilities in planning and execution. DOD agreed with our 

recommendation. While some steps have been taken to provide more 

training, this lack of training appears to be a continuing problem.

The July 7, 2000, memorandum from the U.S. Army Europe Chief of Staff on 

monitoring and controlling the support contract cited the importance of 

ensuring that the right people are identified, trained, rehearsed, and 

motivated to accept their responsibilities. The memorandum also stated 

that it is of critical importance to identify rotating units early so that they 

can train their staffs and incorporate their tasks into their mission 

rehearsal exercises. In discussing the results of our work with U.S. Army 

Europe and Defense Contract Management Agency officials we were told 

that they are making information, such as a copy of the contract, available 

to personnel who will be involved with the contract early (before they 

rotate). They also said that the content of the training is changing to 

include more scenarios involving likely contract situations task force 

personnel and contract administrators are likely to encounter once they are 

deployed. Training also focuses more on what is being done under the 

contract in the Balkans now, recognizing that some tasks such as building 

camps are complete.

Personnel Rotations Further 

Inhibit Effective Oversight

Army policy is to limit Balkans rotations to 6-month periods. In keeping 

with this policy, the average tour length for military personnel deployed to 

the Balkans is in fact 6 months. Numerous officials told us that this is too 

short a period to learn the job of managing the support contract and 

establish effective working relationships. Many officials involved with 

managing the contract said that it was frustrating to have to leave just as 

they were beginning to understand their job. The impact of the 6-month 

rotation policy is compounded by the fact that most Army task force 

personnel responsible for construction and service decisions, as well as 
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Defense Contract Management Agency contract administration personnel, 

leave at about the same time. The lack of a staggered rotation system 

destroys continuity for ongoing projects and prevents incoming staff from 

understanding why specific decisions were made. 

In discussing this matter with the commander of U.S. forces in Kosovo and 

Macedonia, he agreed that there is a lack of continuity due to the constant 

rotation of personnel. He also said that one alternative might be to have 

some military and civilian personnel remain in Kosovo and Macedonia for 

longer periods to help establish continuity. In discussing the results of our 

work with the head of the Defense Contract Management Agency-Southern 

Europe in Germany in July 2000, he also agreed that frequent rotations 

cause difficulties in training and continuity. However, task force personnel 

with whom we spoke in July 2000 also said that some personnel involved 

with administering the contract had begun to rotate at different times from 

the main task force.

Conclusions The Army is concerned about controlling the cost of the Balkans Support 

Contract and has taken a number of actions to do so. U.S. Army Europe’s 

recent memorandum directing a quarterly review of recurring services is an 

important step in regaining control over the extent of services provided in 

the Balkans. Recent improvements in training for personnel preparing to 

deploy to the Balkans who will have contract administration 

responsibilities and the recognition that effective contract oversight 

involves assessing the efficiency with which services are delivered are also 

important steps. There are, however, additional steps that could be taken to 

reduce costs. To be more effective, the quarterly reviews need to go beyond 

examining whether current services are needed and should include factors 

such as the level and efficiency of services. The base operation standards 

currently being developed for services that are being provided will be a 

valuable tool in assessing the services’ level and efficiency. In addition, 

including the Defense Contract Management Agency and the Defense 

Contract Audit Agency in the quarterly reviews and in the development of 

the base operation standards would bring additional expertise to the 

process. 

Further, misunderstandings about the roles of the government and the 

contractor have limited the government’s oversight of the contract. 

Incomplete understanding of the government’s authority and 

responsibilities under this type of contract, coupled with limited training 

and a lack of continuity among contract administration personnel, has led 
B-285941

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personnel to simply accept existing practices rather than question them, 

even though some services may have appeared to be provided at 

unnecessarily high levels. As a result, DOD may be incurring higher costs 

than necessary. 

Recommendations for 

Executive Action

To better control costs and improve administration of the Balkans Support 

Contract, we recommend that the Secretary of Defense direct the Secretary 

of the Army to

• direct the Commanding General, U.S. Army Europe, to (1) examine the 

level and frequency of services being provided and assess the economy 

and efficiency with which they are being provided as part of the newly 

directed quarterly review of recurring services under the Balkans 

Support Contract, (2) seek the participation of the Defense Contract 

Management Agency and the Defense Contract Audit Agency in these 

reviews, and (3) set a target date for completing base operation 

standards for contractor-provided services and use these standards in 

the quarterly reviews and

• direct a more extensive pre-deployment training program for all 

contract oversight personnel to include (1) the fundamentals of cost 

reimbursement performance-based contracting and (2) the 

government’s authority and responsibilities under the contract. 

We also recommend that the Secretary of Defense direct both the Secretary 

of the Army and the Director, Defense Contract Management Agency, to 

provide greater continuity in managing the Balkans Support Contract by 

scheduling rotations so that key contracting personnel, such as 

administrative contracting officers, rotate at different times and by 

considering the feasibility of a more permanent core of civilian contract 

administrators. 

Agency Comments and 

Our Evaluation

DOD and Brown and Root Services provided written comments on a draft 

of this report, which are reprinted in appendixes II and III. DOD agreed 

with our recommendations, but noted that our third recommendation 

should be changed to include direction to the Defense Contract 

Management Agency because agencies other than the Army provide 

personnel to perform contract administration functions on the Balkans 

Support Contract. We agreed and modified our recommendation 

accordingly to reflect that both the Army and the Defense Contract 
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Management Agency have personnel involved in administering the 

contract.

Brown and Root Services stated that contractor support is vital to 

contingency operations. Brown and Root Services also provided comments 

on contract activities, including power generation redundancy, the size of 

its local national workforce in the Balkans, and fire-fighting services to 

either clarify or make its position better understood. We modified the 

report where appropriate. 

As agreed with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 5 days after its 

issue date. At that time, we will send copies to the Honorable William S. 

Cohen, Secretary of Defense; the Honorable Louis Caldera, Secretary of the 

Army; and the Honorable Jacob Lew, Director, Office of Management and 

Budget. We will also make copies available to appropriate congressional 

committees and other interested parties on request. 

If you or your staff have any questions about this report, please call me at 

(202) 512-5140. Another contact and major contributors to this report are 

listed in appendix IV.

Sincerely yours,

Carol R. Schuster

Associate Director

National Security Preparedness Issues 
Page 28 GAO/NSIAD-00-225 Contingency Operations

Appendix I

Scope and Methodology ApApenednxidexiIs

To assess whether the Army is taking effective actions to control costs, we 

obtained relevant documents and reports about contract operations. These 

included the Balkans Support Contract, cost reports, and descriptions of 

the services provided under the contract and the roles and responsibilities 

of various organizations involved with the contract. These documents were 

provided by a variety of organizations, including the Defense Logistics 

Agency, the Defense Contract Management Agency, the Defense Contract 

Audit Agency, the Department of the Army’s Deputy Chief of Staff for 

Logistics, the U.S. Army Corps of Engineers, U.S. Army Europe, and Brown 

and Root Services (BRS). We held numerous meetings with officials from 

the Army Corps of Engineers’ Transatlantic Program Center, which 

awarded and manages the Balkans Support Contract. We also met with and 

analyzed documentation provided by U.S. Army Europe logistics and 

engineer officials who are responsible for administering the Balkans 

Support Contract. We did not, however, examine the appropriateness of the 

decisions made by the award fee board in evaluating BRS’ performance. To 

assess the government’s audit oversight of the contract, we met with 

officials from the Defense Contract Audit Agency office responsible for 

monitoring the contractor. We analyzed documentation the office had 

obtained regarding the contractor’s financial and accounting system and 

examples of purchase orders that the agency had audited. 

To understand contractor support in the Balkans first-hand, in April-May 

2000 we visited and obtained documentation from, analyzed records of, and 

discussed contract procedures with officials from Task Force Eagle in 

Bosnia, Task Force Falcon (Forward) in Kosovo, and Task Force Falcon 

(Rear) in Macedonia. We obtained and analyzed contractor records 

pertaining to projects performed at U.S. base camps in Bosnia, Kosovo, and 

Macedonia. We also observed contractor operations at all camps, reviewed 

records from boards convened to assess and approve work projects, and 

discussed contractor operations with deployed Army and BRS personnel 

both at the base camps in the Balkans and at BRS headquarters in Houston, 

Texas. 

To examine whether improvements are needed in how the Department of 

Defense (DOD) manages activities under the Balkans Support Contract, we 

met with officials involved in administering the contract in the base camps 

in Bosnia, Kosovo, and Macedonia, including administrative contracting 

officers, deployed Army logisticians, representatives of the Base Camp 

Coordinating Agency, and camp mayors. We also met with Army, Defense 

Contract Management Agency, and other organization representatives in 

the United States and Germany. We discussed with them the amount and 
Appendix I

Scope and Methodology

Page 29 GAO/NSIAD-00-225 Contingency Operations

adequacy of training provided and the effect of frequent rotations on DOD’s 

ability to administer the contract effectively. We also discussed with Army 

and BRS officials the results of a partnering meeting, held in Germany in 

April 2000, that brought together representatives of the Army, other DOD 

organizations, and BRS to examine how to improve contract activities.

We performed our work from July 1999 through September 2000 in 

accordance with generally accepted government auditing standards.
Page 30 GAO/NSIAD-00-225 Contingency Operations

Appendix II

Comments From the Department of Defense ApendxiI
Page 31 GAO/NSIAD-00-225 Contingency Operations

Appendix III

Comments From Brown and Root Services ApendxiI

Note: GAO comments 

supplementing those in the 

report text appear at the end of 

this appendix.

See comment 1.

See comment 2.
Appendix III

Comments From Brown and Root Services

Page 32 GAO/NSIAD-00-225 Contingency Operations

See comment 3.

See comment 4.
Appendix III

Comments From Brown and Root Services

Page 33 GAO/NSIAD-00-225 Contingency Operations

See comment 5.

See comment 6.

See comment 7.
Appendix III

Comments From Brown and Root Services

Page 34 GAO/NSIAD-00-225 Contingency Operations

The following are our comments on BRS’ letter dated September 14, 2000.

GAO’s Comments 1. We revised our report to reflect the proper name for the contractor and 

to clarify that the Army reimburses BRS for allowable direct costs. 

2. BRS states that the Army carefully addressed power requirements in 

the lengthy planning process for Kosovo operations and determined 

that it wanted BRS to provide 100-percent prime power, 100-percent 

backup power, and selected tertiary backup power for selected key 

facilities. In fact, the February 24, 1999, statement of requirements 

resulting from the Army’s planning process for Kosovo operations 

called for power generation to be provided at 100-percent of prime 

requirement with backup and tertiary backup to critical nodes 

installations such as the tactical operations center, hospital, and other 

designated facilities. No mention is made of 100-percent backup power. 

Following the February 1999 statement of requirements, the 

description of the requirement for power generation became less 

specific. In the June 18, 1999, notice to proceed that the Defense 

Logistics Agency issued to BRS as U.S. forces began to deploy to 

Kosovo, BRS was told to provide electrical power generation and 

distribution for all facilities in the camps. Army officials at U.S. Army 

Europe and in Kosovo were unable to provide us with any 

documentation supporting a need for 100-percent power redundancy. 

In the absence of specific guidance from the Army on power 

redundancy, our report describes the steps BRS took to obtain such 

guidance and the action it took when it did not receive such guidance. 

Regarding the status of leased generators that can be returned to the 

vendor, we updated our report to state that 38 generators are being 

returned and deleted references to excess leased generators.

3. Our report was not based solely on our own observations but rather on 

the views of some Army and other DOD officials. As we point out, a 

May 2000 assessment of contractor crew size in Bosnia conducted by 

the Commander of the Engineer Brigade provides similar conclusions 

about the inefficiency of contractor crews. For balance, we included 

BRS officials’ explanations for the perception provided by DOD 

officials. Our intent in presenting this information was to illustrate the 

need for the Army to assess the efficiency of services.

4. We have revised the report to clarify that BRS’ planned fire-fighting 

force of 116 included both firefighters and associated administrative 
Appendix III

Comments From Brown and Root Services

Page 35 GAO/NSIAD-00-225 Contingency Operations

and maintenance personnel. Fire-fighting at U.S. Army facilities in 

Europe is the responsibility of U.S. Army Europe’s Engineering 

Directorate. According to a Directorate official, the number of 

firefighters proposed by BRS varied over time because of changing 

perspectives of BRS personnel rather than because the Army more 

clearly defined the mission.

5. BRS stated that it used Appendix C of Military Handbook 1008C, “Fire 

Protection for Facilities Engineering, Design, and Construction,” in 

determining the requirement for the fire-fighting mission. According to 

Army Corps of Engineers and U.S. Army Europe officials, including 

officials involved in developing the military handbook, the handbook 

was developed for permanent facilities and was never designed to be 

applied to a war zone. 

6. BRS stated that the Army only plans to staff manpower sufficient to 

fight a single fire, while BRS was assigned both structural fire-fighting 

and crash responsibilities. According to a U.S. Army Europe engineer 

official, Army firefighters also had both structural fire-fighting and 

crash responsibilities, but the Army staffs its units assuming that it 

would only have to do one at a time. 

7. We describe in our report some of the steps BRS has taken to reduce 

costs and the amount of the resulting savings reported by BRS. While 

BRS provides data on what it terms cost avoidance measures, 

according to Army Corps of Engineers officials responsible for 

administering the contract, the Corps has never systematically assessed 

their validity. While we agree that BRS has taken steps to reduce costs, 

we are not in a position to attest to the sum of such savings.
Page 36 GAO/NSIAD-00-225 Contingency Operations

Appendix IV

GAO Contacts and Staff Acknowledgments ApendxiIV

GAO Contact Steven H. Sternlieb (202) 512-4534

Acknowledgments In addition to the contact named above, Ray S. Carroll Jr., Lester L. Ward, 

and Adam Vodraska made key contributions to this report.

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