Audit 

 Report 

Federal Deployment Center 

Forward Operations at the Kuwait Hilton 

Report Number 04-003 June 25, 2004 

Office of the Inspector General 

Coalition Provisional Authority
Acronyms 

AAFES Army Air Force Exchange Service 

ACO Administration Contract Officer 

CONUS Continental United States 

CPA Coalition Provisional Authority 

CRC CONUS Relocation Center 

DA Department of the Army 

DoD Department of Defense 

EXORD Execution Order 

FDC Federal Deployment Center 

FDC-Forward Federal Deployment Center at the Kuwait Hilton 

IDIQ Indefinite Delivery, Indefinite Quantity 

ITO Iraq Theater of Operation 

KBR Kellogg Brown & Root, Inc. 

LOGCAP Logistics Civil Augmentation Program 

RCO Requirements Control Office 

RSO&I Reception, Staging, Onward-Movement, and Integration 
COALITION PROVISIONAL AUTHORITY 

OFFICE OF THE INSPECTOR GENERAL

400 Army Navy Drive • Arlington, Virginia 22202

June 25, 2004 

MEMORANDUM FOR ADMINISTRATOR, COALITION PROVISIONAL AUTHORITY 

SUBJECT: Report on Federal Deployment Center Forward Operations at the Kuwait Hilton 

(Report No.04-003) 

 We are providing this report for your information and use. We performed the review at 

the request of your office. We considered management comments on a draft of this report in 

preparing the final report. 

Comments on the draft of this report were responsive to our recommendations and left no 

unresolved issues. Therefore, no additional comments are required. However, we will follow-up 

to ensure corrective actions are fully implemented by management. 

 We appreciate the assistance extended to the staff. Questions should be directed to 

Mr. Brian Flynn, (703) 343-8953 or Mr. William Whitehead, (703) 343-8954. Management may 

request a formal briefing on the results of this audit. 

Stuart W. Bowen, Jr. 

Inspector General 

Coalition Provisional Authority 
i

Office of the Inspector General 

Coalition Provisional Authority 

Report Number 04-003 June 25, 2004 

 (Project No. D2004-DCPAAO-0024) 

Federal Deployment Center Forward Operations at the Kuwait Hilton 

Executive Summary

Introduction: The Inspector General accomplished this review at the request of the 

Coalition Provisional Authority (CPA) Deputy Chief of Staff who had concerns about 

unauthorized personnel using the facility. The Federal Deployment Center (FDC) at the 

Kuwait Hilton (FDC-Forward) provides a location for reception, any further deployment 

training, and re-deployment of executive personnel. Total annual cost for this operation is 

over $11 million. The Department of the Army (DA) established FDC-Forward at the 

Kuwait Hilton as the reception location for, “...executive personnel deploying in support 

of operations in Iraq.” 

The Department of the Army issued an indefinite delivery, indefinite quantity cost plus 

award fee contract (DAAA09-02-D-0007), Logistics Civil Augmentation Program 

(LOGCAP), was issued to Brown & Root Service, a Division of Kellogg Brown & Root, 

Inc. to provide civil augmentation for base operations and support to the DA throughout 

the world. The DA issued Task Order 0063, on August 27, 2003, to provide deployment 

processing for federal executives deploying to the Iraq Theater of Operations. 

Objective: The objectives of this review were to determine whether the CPA efficiently 

and effectively operated FDC-Forward. Specifically, objectives were to determine 

whether FDC-Forward (1) met the purpose for which it was established by Department of 

Army Execution Order and (2) established policy to limit the use of FDC-Forward 

facility to authorized personnel. 

Conclusion: The FDC-Forward operation met the purpose established in the Department 

of Army Execution Order; however no CPA policy existed for usage, which led to 

inefficient use of CPA resources. Specifically, the CPA did not: 

• Provide adequate oversight of the operation to ensure CPA costs were limited to 

those for authorized users. 

• Have a defined policy identifying those persons eligible to use the FDC-Forward 

Kuwait Hilton facility. Without established policy, contractor employees allowed 

unauthorized persons to use the Kuwait Hilton at the expense of the CPA. 
ii

Recommendations: We made eight recommendations to the CPA Chief of Staff to 

improve the effectiveness of FDC-Forward operations. 

Managements Actions: During the review period, the CPA Chief of Staff concurred 

with all recommendations and fully implemented seven of the eight recommendations. 

The Chief of Staff is in the process of implementing the remaining recommendation. 

Implementing the eight approved recommendations will result in a minimum annual 

potential monetary benefit of $3.6 million (32 percent of current annual cost). 
Table of Contents 

Executive Summary i 

Background 1 

Objective 2 

Findings 

A. Operations of the Federal Deployment Center at the 

Kuwait Hilton 3 

Recommendations and Management Actions 4 

B. Eligibility for Use of the Federal Deployment Center in 

Kuwait 6 

Recommendations and Management Actions 6 

Appendixes 

 A. Scope and Methodology 8 

 B. Report Distribution 10 

 C. Audit Team Members 11
1 

Background 

The Inspector General accomplished this review at the request of the Coalition 

Provisional Authority (CPA) Deputy Chief of Staff who had concerns about unauthorized 

personnel using the facility. The Federal Deployment Center (FDC) at the Kuwait Hilton 

(FDC-Forward) provides a location for reception, any further deployment training, and 

re-deployment of executive personnel. Total annual cost for this operation is over 

$11 million. The Department of the Army (DA) established FDC-Forward as the 

reception location for, “...executive personnel deploying in support of operations in 

Iraq.” 

The Department of the Army issued an indefinite delivery, indefinite quantity (IDIQ) cost 

plus award fee contract (DAAA09-02-D-0007), Logistics Civil Augmentation Program 

(LOGCAP), was issued to Brown & Root Service, a Division of Kellogg Brown & Root, 

Inc. (KBR) to provide civil augmentation for base operations and support to the DA 

throughout the world. This is The DA issued Task Order 0063, on August 27, 2003, to 

provide deployment processing for federal executives deploying to the Iraq Theater of 

Operations (ITO). 

The Coalition Provisional Authority (CPA) established the FDC-Forward to provide 

support and meet requirements outlined in the DA Execution Order (EXORD) for 

training, equipping, and processing of non-unit related personnel reporting individually 

for deployment to the ITO. Other deployment centers were established at Fort Belvoir 

and Fort Bliss. The EXORD for Deployment Centers specifically addresses employees 

such as U.S. military forces, federal civilian employees, contractors supporting the 

Department of the Army, Red Cross employees, Army Air Force Exchange Service 

(AAFES) employees, Department of Defense (DoD) civilian employees, and senior 

executive service employees. Each deployment center’s required functions included: 

providing pre-deployment and post-deployment medical screening of health records and 

blood samples; reviewing inoculation records and providing any needed inoculations; 

issuing and accounting for personal protection equipment; briefing on security and local 

threat conditions; transport to and from the ITO; and providing other logistics for ITO 

transitioning. 

The DA implementing EXORD directed certain categories of personnel (i.e., U.S. 

military, contractors supporting the DA, Red Cross employees, and AAFES employees) 

to process through the continental United States (CONUS) Relocation Center (CRC) at 

Fort Bliss, Texas and senior executives to process through the Federal Deployment 

Center (FDC) at Fort Belvoir, Virginia. Personnel supporting the CPA who processed 

through the FDC-Fort Belvoir are transitioned through Kuwait and lodged at the FDCForward. In Kuwait, personnel receive required briefings and await transportation to the 

ITO. The FDC-Forward (through the Contractor) presently leases office space and 

personal room space from the Kuwait Hilton. 
2 

Objective 

The objective of this review was to determine whether the CPA efficiently and 

effectively operated FDC-Forward. Specifically to determine whether FDC-Forward met 

the purpose for which it was established by DA Execution Order and established policy 

to limit the use of FDC-Forward facility to authorized personnel. 
3 

Finding A. Operations of the Federal Deployment 

Center at the Kuwait Hilton

The CPA did not provide clear guidance on who is eligible to use of FDC-Forward. As a 

result, the contractor allowed all requestors supporting CPA’s mission to billet and mess 

there, charging the cost to the CPA. Additionally, in the absence of adequate CPA 

oversight and guidance, the contractor procured billeting and office space beyond CPA 

requirements. Allowing unauthorized persons to use the FDC-Forward facility meant that 

the available bed space was limited and the contractor turned away authorized personnel. 

Also because available space was limited, the FDC-Forward medical, administrative, 

briefing, and equipment issue functions were performed in more expensive office 

locations in the main hotel. The resulting additional costs incurred under the task order 

amounted to $3.64 million annually. Specifically, the: 

• Director for Reception, Staging, Onward-Movement, and Integration (RSO&I) 

leased an individual room in the main hotel costing over $101,000 annually and 

maintained an office in the main hotel costing more than $152,000 for the year. 

The RSO&I operation costs more than $253,000 annually.

• Medical and equipment issue functions were located in the main hotel costing 

CPA $171,000 annually. CPA also rented an office to conduct local threat 

briefings at a cost of $85,428 annually and an office for KBR to use for Material 

Control also costing $85,428 annually. These four offices cost over $342,000 

annually. 

• Contractor employees were lodged in the main hotel costing $2.85 million 

annually. 

• Government is projected to reimburse the hotel $191,000 annually for laundry 

service in place of providing a washer and dryer in each villa. 

The contract administration staff of the Defense Contract Management Agency did 

ensure that the contractor provided all services required under the terms of the task order. 

Contract administration staff saw to it that the contractor: 

• Provided credentialed medical staffing to conduct medical screening for persons 

deploying to the ITO, as well as post-deployment processing, to include 

inoculations, and blood sampling; 

• Issued and accounted for personal protection equipment such as protective vests, 

helmets, gas masks, canteens, desert camouflage uniforms, and boots; 

• Conducted training briefings for security, local threat conditions, and personal 

protection (chemical environment, unexploded ordinance, etc.); and, 

• Provided transportation (or assisted with arrangements) to and from the military 

air transportation location and the civilian airport. 
4 

However, the statement of work for the task order was written in generic terms and, in the 

absence of specified task order provisions, the CPA did not apply adequate oversight to 

ensure that operating costs were minimized; review and analyze the details of the cost 

reports provided from the contractor to identify opportunities to minimize costs; or 

establish clear limitations on the costs that the contractor could incur under the task order. 

As a result of the limited task order oversight, additional costs incurred under the task 

order amounted to $3.64 million annually. Additionally, the contractor billeting records 

were insufficient to determine the appropriateness of some costs related to unauthorized 

individuals who were billeted at FDC-Forward. Without sufficient records, accurate 

costs for the inappropriate use could not be determined and refunds from unauthorized 

users could not be pursued. 

Recommendations and Management Actions 

A. We recommend that the CPA Deputy Chief of Staff: 

1. Require the Administration Contract Officer (ACO) to conduct a detailed review 

of contractor cost reports. 

Management action. The Deputy Chief of Staff concurred with the 

recommendation and implemented corrective action. The Requirements Control 

Office (RCO) of the CPA now receives weekly billeting reports to review for 

authorized use. In addition, the CPA RCO directed the ACO to review detail 

level costs to determine whether costs are appropriate. 

2. Relocate living quarters for the Director, RSO&I from an individual room in the 

main hotel to a room in a villa, saving $101,000 annually. 

Management action. The Deputy Chief of Staff concurred with the 

recommendation and implemented corrective action. The Director of RSO&I has 

relocated to living quarters in a villa. 

3. Relocate the medical and equipment issue functions from the office locations in 

the main hotel to a room in a villa saving $171,000 annually. 

Management action. The Deputy Chief of Staff concurred with the 

recommendation and implemented corrective action. The Director of RSO&I 

coordinated with the contractor to relocate the medical and equipment issue 

functions to a villa. 

4. Relocate Contractor employees supporting the CPA from individual rooms in the 

main hotel to rooms in a villa saving over $2,853,000 annually. 

Management action. The Deputy Chief of Staff concurred with the 

recommendation and implemented corrective action. The Director of RSO&I 
5 

coordinated with the contractor to relocate 28 contractor employees from 

individual rooms in the main hotel to rooms in a villa. 

5. Relocate the FDC briefings, administrative office of the Director RSO&I, and the 

contractor’s Material Control office from the main hotel to a room in a villa 

saving, at least, $323,000 annually. 

Management action. The Deputy Chief of Staff concurred with the 

recommendation and implemented corrective action. The Director of RSO&I 

coordinated with the contractor to identify a villa location for the briefings. The 

Director also coordinated with contractor representatives to relocate the 

Equipment Issue function and the Director’s administrative office from the main 

hotel to a villa 

6. Install a washer and dryer in each CPA rented villa and discontinue government 

reimbursement of over $191,000 projected annually for Kuwait Hilton laundry 

service. 

Management action. The Deputy Chief of Staff concurred with the 

recommendation and implemented corrective action. The Director of RSO&I 

coordinated with the contractor to procure additional washer and dryer machines 

already available under the Logistics Civil Augmentation Program contract to 

supply one pair each per villa and directed the use of the hotel’s laundry service 

be discontinued. 

Audit Response 

The Deputy Chief of Staff’s actions are fully responsive. We commend the Deputy Chief 

of Staff for prompt and aggressive action to establish management controls and reduce 

task order costs. However, because the Director, Reception, Staging, OnwardMovement, and Integration could not provide a date by which all corrective action would 

be implemented, we will follow–up to ensure that the corrective actions proposed in 

response to Recommendations A.3., A.4., A.5., and A.6. are fully implemented. 
6 

Finding B. Eligibility for Use of the Federal 

Deployment Center in Kuwait

The CPA did not have a defined written policy identifying those persons eligible to use 

the FDC-Forward. Specifically, the statement of work for the task order indicated that, 

“senior level personnel” were authorized to use FDC-Forward. However, the statement 

of work did not define senior level personnel. Also, the DA EXORD stated that, 

“executive personnel” would process through the FDC-Forward, again without defining 

executive personnel. Finally, CPA implementing guidance did not define what personnel 

categories (non-U.S. military, Department of State, other contractors) were to be 

supported by the contractor. Therefore, the contractor interpreted who was eligible to use 

FDC-Forward. Generally, the contractor allowed any person supporting the CPA to stay 

at the FDC-Forward facility and charged the cost to the CPA.

The initial Director for RSO&I gave the contractor representative verbal guidance that 

the FDC-Forward facility could be used by all categories of personnel for any purpose. 

However, the Director of RSO&I did not discuss this issue with the ACO to determine, 

based on the contract, what was allowed. As a result: 

• U.S. appropriated funds were used for unauthorized guests; 

• CPA inappropriately paid for contractor employee’s use of the FDC-Forward 

facility for their rest and recuperation; and, 

• CPA was not reimbursed for non-CPA personnel billeted at the FDC-Forward 

facility. 

Without established written policy, CPA paid for unauthorized and unnecessary 

expenditures. 

Recommendations and Management Actions 

B. We recommend that the CPA Deputy Chief of Staff: 

1. Establish and provide contractor representatives written policy defining who is 

eligible and the process for using the FDC-Forward facility. 

Management action. The Deputy Chief of Staff concurred with the 

recommendation and implemented corrective action. CPA Policy was issued on 

April 8, 2004, defining the reservation and use process. The policy clearly 

defined the category of users eligible to use the facility. The CPA Deputy Chief 

of Staff coordinated the policy with the ACO to ensure any action or changes to 

cost estimates for the contractor would be approved. Further, the CPA provided 

specific guidance to the Director for RSO&I identifying responsibilities and 

authority, as well as, instruction to address any unclear issues to the Director, 

RCO of the CPA for resolution. 
7 

2. Require the ACO to periodically monitor contractor performance, as well as, 

FDC-Forward requirements to ensure issues are interpreted using the contract or 

amending the contract as necessary. 

Management action. The Deputy Chief of Staff concurred with the 

recommendation and implemented corrective action by requiring the contractor to 

provide the RCO of the CPA with a copy of all contract issues and concerns 

raised to the Director of RSO&I. The RCO has been made responsible for 

reviewing and forwarding these issues and concerns to the ACO. Additionally, 

the CPA Deputy Chief of Staff required the ACO to periodically visit the site for 

personal observation of contract performance. The first such visit was made on 

May 10, 2002. 

Audit Response 

The Deputy Chief of Staff’s actions are fully responsive. We commend the Deputy Chief 

of Staff for prompt and aggressive action to establish management controls and reduce 

task order costs. 
8 

Appendix A: Scope and Methodology 

Audit Scope. The CPA Deputy Chief of Staff requested this review. Although we used 

audit techniques to review the objectives, only limited guidance existed to provide 

standards. When a standard did not exist, we applied best business practices as 

determined by the review team based on experience and comparable operations. We 

maintained close liaison with the CPA to provide immediate feedback on conditions and 

recommendations for possible management action. 

Audit Coverage 

• During the period from March 31 to April 4, 2004, with follow-up from April 17 

to April 19, 2004, we conducted personal interviews with personnel at the 

FDC-Forward facility. Personnel interviewed included the contractor’s Lead 

FDC Operations, Billeting Supervisor, Project Control Officer, and LOGCAP III 

Government Compliance Manager. We also interviewed the Government’s 

Director RSO&I, CPA-RCO and the ACO for LOGCAP III, Task Orders 0044 

and 0063 to obtain operational and cost information. We reviewed the 

contractor’s billeting records to determine who and why persons billeted at the 

FDC-Forward, we then tested this through personal observation at airport arrival 

and hotel arrival. We used cost information from the January 2004 billing from 

the contractor based on Hilton Hotel billing to the contractor to determine 

operational costs. 

• The audit reviewed the LOGCAP III, Task Order 0044 and 0063 FDC operations 

at the FDC-Forward location. The audit scope was limited to the FDC operations, 

more specifically, to the hotel, meals, and laundry costs associated with these 

Task Orders. 

• The audit was conducted from March 31 through April 19, 2004. 

• The only source document we relied on for specific information was the January 

2004 contractor billing to the Government. The contractor Project Control Officer 

provided this document and stated to the best of her knowledge the information 

was clearly and accurately presented. The contractor Billeting Supervisor 

provided registration forms for the period of December 2003 and a recently 

created EXCEL spreadsheet for registrations from November 2003 through 

February 2004; however, most of these forms and registration entries were 

incomplete and lacked sufficient information. As a result, we could only draw 

general conclusions from this information. 

• We provided the CPA Director, RCO a copy of the draft report on May 11, 2004. 

• We evaluated general internal controls to determine whether only authorized users 

received the benefit of this operation. Specifically, we interviewed the KBR 
9 

Billeting Supervisor to determine rules and policy for room assignment, meal card 

provisions, and the registration process.

Sampling Methodology. We did not use statistical or judgmental samples or computer 

assisted auditing tools and techniques to analyze data or project results in this audit. 

While reviewing the registration forms, we included information from only those forms 

we found legible, complete, and understandable. Selection was not based on sampling, 

rather meeting the above criteria. 

Data Reliability. We did not rely on computer-generated data to support our 

conclusions. 

Auditing Standards. We conducted the audit in accordance with generally accepted 

government auditing standards. 

Discussion with Responsible Officials. On April 6, 2004, we provided an out brief of 

our review to the CPA Deputy Chief of Staff, CPA Director RCO, and the ACO for 

LOGCAP III Task Orders 0044 0063. At that time the CPA Deputy Chief of Staff 

concurred with the audit conclusions and recommendations. Subsequent to the April 17 

to 19, 2004 follow-up review, we provided a Memorandum for Record reiterating our 

conclusions along with completed management actions to the CPA Director of RCO. 

Prior Audit Coverage. We did not find evidence of any prior audit coverage in this 

area. 
10 

Appendix B: Report Distribution 

Office of the Secretary of Defense 

Under Secretary of Defense (Comptroller)/Chief Financial Officer 

Director, Defense Procurement and Acquisition 

Department of the Army 

Assistant Secretary of the Army, Acquisition, Logistics & Technology 

Auditor General, Department of the Army 

Other Defense Organizations

Administrator, Coalition Provisional Authority 

Director, Coalition Provisional Authority Program Management Office 

Department of Defense Inspector General 

Director, Defense Contract Audit Agency 

Non-Defense Federal Organization 

Office of Management and Budget 

General Accounting Office 

Department of State 

U.S. Agency for International Development 

Department of Health and Human Services Inspector General 

Department of Commerce Inspector General 

Congressional Committees and Subcommittees, Chairman and 

Ranking Minority Member 

Senate Committee on Appropriations 

Senate Subcommittee on Defense, Committee on Appropriations 

Senate Committee on Armed Services 

Senate Committee on Governmental Affairs 

Senate Committee on Foreign Relations 

House Committee on Appropriations 

House Subcommittee on Defense, Committee on Appropriations 

House Committee on Armed Services 

House Committee on Government Reform 

House Subcommittee on Government Efficiency and Financial Management, Committee 

on Government Reform 

House Subcommittee on National Security, Emerging Threats, and International 

Relations, Committee on Government Reform 

House Subcommittee on Technology, Information Policy, Intergovernmental Relations, 

and the Census, Committee on Government Reform 

House International Relations Committee 
11 

Appendix C: Audit Team Members 

The Financial Management Division, Office of the Assistant Inspector General for 

Auditing, Coalition Provisional Authority, prepared this report. 

John Betar 

Brian Flynn 

William Whitehead 

Edward M. Terek