CONGRESS OF THE UNITED STATES

CONGRESSIONAL BUDGET OFFICE

A

CBO

STUDY

OCTOBER 2005

Logistics Support 

for Deployed 

Military Forces

Used by Permission

The Congress of the United States O Congressional Budget Office

CBO

Logistics Support 

for Deployed Military Forces

October 2005

A

STUDY
Notes

Numbers in the text and tables of this study may not add up to totals because of rounding.

Unless otherwise indicated, all dollar amounts are in 2005 dollars and all years are fiscal years.
Preface

The U.S. Army uses a mix of uniformed military personnel, federal civilian employees, 

and contractors to support its deployed combat forces. Over the past three years, more than 

$15 billion of logistics support (including such services as base-camp construction, food, fuel, 

housing, and supplies) has been provided to the Army in Iraq, Afghanistan, and elsewhere in 

Southwest Asia under contract. 

This Congressional Budget Office (CBO) study—prepared at the request of the Senate Committee on Armed Services—evaluates alternative mixes of military personnel, federal civilians, 

and contractors that could support the Army’s deployed combat forces. The study analyzes 

four options that would vary the mix among the three labor categories, affecting the provision 

of logistics support as well as the maintenance of weapon systems in the wartime theater. 

CBO evaluates the four options on the basis of their cost, flexibility, and legal considerations. 

In keeping with CBO’s mandate to provide objective, impartial analysis, this study makes no 

recommendations.

Matthew Goldberg coordinated the preparation of this study, under the supervision of 

J. Michael Gilmore. The research was conducted by Adebayo Adedeji, Daniel Frisk, Carla 

Tighe Murray, and R. Derek Trunkey. David Newman performed most of the cost analysis, 

under the supervision of Jo Ann Vines. Frances Lussier contributed to the analysis, and Eric 

Labs and Allison Percy provided additional assistance. Ed Harris, Arlene Holen, and Elizabeth 

Robinson (formerly of CBO) provided helpful comments. Robert Murphy reviewed the section on legal issues, as did Jennifer Elsea of the Congressional Research Service. Stanley 

Horowitz of the Institute for Defense Analyses reviewed the entire study. (The assistance of 

external reviewers implies no responsibility for the final product, which rests solely with 

CBO.)

Christine Bogusz and Loretta Lettner edited the study, and Christian Spoor proofread it. 

Cindy Cleveland produced drafts of the manuscript and prepared the tables. Allan Keaton 

prepared the report for publication, and Andrew Hemstreet of Art Services, Inc., and

Maureen Costantino produced the cover. Lenny Skutnik printed the initial copies, and 

Annette Kalicki and Simone Thomas prepared the electronic version for CBO’s Web site 

(www.cbo.gov).

Douglas Holtz-Eakin

Director

October 2005

Summary ix

1 Background Information on Civilian and Contractor Support of the Military 1

The Military’s Recent Use of Contractor Support 2

Specifications Under the Army’s Logistics Civil Augmentation Program 5

The Legal Status of Military Personnel, Government Civilians, and Contractors 9

Contractors’ Fatality Rates 13

Contractors’ Role in the Army’s Force Structure 16

2 Factors That Determine the Mix of Military Personnel, Federal Civilians, and 

Contractors 23

Advantages of Contractors 23

Advantages of Uniformed Military Personnel 25

Advantages of Federal Civilians 25

3 Options for Providing Logistics Support to Deployed Army Units 27

Option 1: Rely More on Military Personnel for Logistics Support 27

Option 2: Rely More on Federal Civilians for Logistics Support 44

4 Additional Options to Change the Personnel Mix 53

Option 3: Substitute Federal Civilians for Deployed Contractors Who Support 

Weapon Systems 53

Option 4: Establish a New Type of Personnel—Sponsored Reserves 60

A Assessing the Army’s Capability to Replace Task Order 59 with Army Logistics 

Units 63

CONTENTS
vi LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

B Sample Calculations to Determine the Required Number of Army Field Service 

Companies 73

C The Methodology Behind the Cost Analysis 77

D Assessing the Sensitivity of Results to Certain Assumptions 87

E Routine Costs for Existing Army Units 91

Glossary of Abbreviations 93
CONTENTS vii

Tables

S-1. Alternatives to the Current Mix of Military Personnel, Federal

Civilians, and Contractors Examined in This Analysis xiii

1-1. Costs of and Locations Served by LOGCAP and Balkans Support

Contracts 3

1-2. LOGCAP and U.S. Army Logistics Personnel in Southwest Asia 5

1-3. Comparison of Fatality Rates Among Selected Workers in Iraq 13

1-4. Distribution of the Army’s Authorized End Strength,

by Component and Function, Fiscal Year 2005 17

3-1. Number and Types of Army Units and Troops Required to

Provide the Logistics Functions Specified in Task Order 59 29

3-2. Army Units and Troops Required to Replace Task Order 59, 

Including a Rotation Base 30

3-3. Summary of Army Units Needed to Replace Task Order 59 34

3-4. Comparison of Incremental Costs for Two Approaches to

Providing Logistics Support to Deployed Army Units 38

3-5. Comparison of Incremental Costs Over 20 Years 39

3-6. Sensitivity of Army Costs to Various Wartime Scenarios Over 20 Years 41

3-7. Comparison of Incremental Costs Over 20 Years for Providing

Logistics Support Using Only New Army Units 43

4-1. Reported Reasons for Relying on System Contractors in Southwest Asia 58

4-2. Estimated Savings from Sponsored Reserve Option 61

A-1. Total Authorized Units and Troops of Relevant Types 66

A-2. Breakdown of Units Required to Perform Functions in Task Order 59 68

A-3. Breakdown of New Units Required for a Rotation Base 71

B-1. Cost Analysis for Army Field Service Companies 75

C-1. Existing Units Available to Provide Logistics Services 81

C-2. Additional Units Needed to Provide Logistics Services 85

D-1. Alternative Assumptions for Key Cost Parameters 88

D-2. Sensitivity of Incremental Costs to Changes in Assumptions 89

D-3. Comparison of Incremental Costs Over 20 Years for Providing

Logistics Support Using Only Active-Component Army Units 90

E-1. Comparison of Total Costs Over 20 Years 92
viii LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Figures

1-1. Selected Logistics Functions Provided by Army Units and Contractors 

During Operations Desert Shield and Desert Storm 4

1-2. Number of Enlisted Personnel in the Active Army, by Occupational

Group, 1985 to 2002 19

1-3. Percentage of Assigned Personnel in the Army 21

3-1. Rotational Scheme for Reserve Logistics Units in a Contingency

Operation 31

3-2. Could the Army Perform the Functions in LOGCAP Task Order 59? 33

3-3. Comparison of Cumulative Incremental Costs for Providing

Logistics Support to Deployed Army Forces Using Two Approaches 37

3-4. Scenarios for Contingency and Peacetime Operations 40

3-5. Sensitivity of Relative Army Costs to Wartime Scenarios 42

3-6. Number of U.S. Contractors and Federal Civilians in the

U.S. Central Command’s Area of Responsibility 46

3-7. Top 10 “Professional and Technical” Occupations of Army Civilians 

Deployed to Iraq or Kuwait, November 2004 47

3-8. Top 10 “Trade, Craft, and Labor” Occupations of Army Civilians 

Deployed to Iraq or Kuwait, November 2004 48

4-1. Number of Army System Contractors Deployed to Operation

Iraqi Freedom 56

4-2. Number of Soldiers per Army System Contractor Deployed to

Operation Iraqi Freedom 57

Boxes

1-1. Combat Service Support in the U.S. Army’s Force Structure 6

1-2. Summary of Services Provided by the LOGCAP III Contractor 8

1-3. The Total Army Analysis Process 14
Summary

Although the U.S. military fights wars using uniformed troops, it also has a long history of using contractors and federal civilians to support its troops on the battlefield.1 Currently, the U.S. Army purchases logistics 

support (which consists of services such as base-camp 

construction, food, fuel, housing, and supplies) in Iraq, 

Afghanistan, and elsewhere in Southwest Asia through 

a contract known as the Logistics Civil Augmentation 

Program (LOGCAP). The Army awarded the current 

LOGCAP contract to Kellogg, Brown & Root in December 2001. During the ensuing three years, the estimated 

cost of the various task orders under LOGCAP exceeded 

$15 billion. As of December 2004, LOGCAP employed 

44,000 people (including foreign nationals and subcontractors).

This study by the Congressional Budget Office (CBO) 

examines the mix of military personnel, contractors, and 

federal civilians that support deployed forces, concentrating on the U.S. Army. The report discusses the advantages and disadvantages of each labor category. CBO 

expects that a mix of all three will continue to be used for 

the foreseeable future, but some adjustments may be 

made to that mix. Consequently, this analysis looks at 

four alternatives for providing logistics support, each 

using a different distribution of the three types of 

employees.

The study focuses on the current mix of personnel in 

Southwest Asia. The U.S. Central Command’s (CENTCOM’s) area of responsibility includes operations in both 

Iraq and Afghanistan as well as U.S. troops stationed in 

adjoining countries, such as Kuwait and Uzbekistan. 

CENTCOM reports that there were about 220,000 U.S. 

troops in its area of responsibility, on average, during calendar year 2004. That total includes 155,000 Army soldiers (National Guard and Reserve as well as active-duty 

Army), of which about 67,000 were providing logistics 

support. CENTCOM also reports an average for 2004 of 

about 18,000 contractors (including only U.S. nationals 

working overseas, not host-country or third-country nationals) and 3,500 federal civilians (including personnel 

from the Department of Defense, or DoD, and other 

federal agencies supporting military operations as well as 

reconstruction activities).2

CBO’s analysis addresses three considerations associated 

with using different types of personnel: cost, flexibility, 

and legal issues.

Cost

Cost is a major distinguishing factor among the alternative mixes of military personnel, contractors, and federal 

civilians examined in this analysis. A comprehensive comparison of the three groups’ respective compensation 

packages is difficult to make, however, because pay is only 

a portion of total compensation. For example, according 

to CBO’s estimates, current cash compensation constituted, on average, only 43 percent of the total compensation package of active-duty military personnel in 2002.3

The remainder—actually the largest part of the total dollar value—consisted of other elements, such as deferred 

cash compensation (mostly retirement pay), services provided in-kind at military installations (such as commissaries, housing, and child care), and both current and deferred health care (the latter including care provided in 

both military and veterans’ hospitals). CBO performed a 

1. Throughout this study, “federal civilians” refers to nonuniformed 

employees of the Department of Defense (DoD) or other federal 

departments or agencies. “Contractors” refers to employees of private U.S. corporations, specifically those that support DoD or 

other departments or agencies (such as the Department of State) 

in conducting warfare or postwarfare reconstruction activities. In 

some instances, which will be clearly noted, contractors may 

include not only U.S. citizens but also host-country nationals (citizens of the country in which the work is being performed) and 

third-country nationals (citizens of neither the United States nor 

the host country). Contractors may also include employees of 

U.S. or foreign corporations who act as subcontractors to the 

prime contractor that holds the contract to support a federal 

department or agency.

2. Other government sources have compiled estimates of the number 

of federal civilians that may differ.

3. Congressional Budget Office, Military Compensation: Balancing 

Cash and Noncash Benefits (January 16, 2004).
x LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

detailed analysis to convert those elements of military 

compensation to a current cash-equivalent basis. A similar accounting of total compensation for contractors and 

federal civilians is not readily available because, for example, existing information is not adequate to associate 

overhead costs (for items such as computers, office space, 

or a portion of supervisors’ salaries) with individual federal workers.

Even a complete accounting of compensation would yield 

an incomplete picture, though, for several reasons. First, 

there may be productivity differences between the labor 

categories. That means that a given number of military 

personnel could be replaced by a different number of 

contractors or federal civilians. Moreover, person-toperson productivity is not the only factor determining the 

size of the workforce required to perform a given task. 

The Army is organized into large defined units that cannot always be scaled down into modular subunits to carry 

out a particular task. The size of the Army’s workforce is 

also influenced by the Army’s requirement to maintain a 

training and rotation base (for the recuperation and training of units) as well as a headquarters structure (to coordinate the activities of the personnel actually performing 

the task).

Training and Rotation Base 

The Army recruits mostly high school graduates and 

trains them to perform the required tasks. Extended deployments compete with training opportunities and also 

keep soldiers separated from their families for long periods. To manage those problems, which may affect 

whether soldiers decide to reenlist, Army units rotate 

back to the United States to recuperate from deployments, reconstitute their personnel and equipment, and 

train for their next deployment. Rotation provides soldiers in those units with a respite from the pace and dangers of deployment as well as an opportunity to spend 

more time in training and with their families.

Thus, to estimate the cost of any alternative mix of personnel requires consideration of the rotation base needed 

to support extended deployments. In the four options examined in this study, CBO considers the incremental cost 

of military personnel, contractors, and federal civilians. 

The incremental cost is measured against a baseline consisting of the costs that would have been incurred under 

current practice. For example, the Army’s peacetime budget already funds the basic pay and peacetime allowances 

of active-duty military personnel and the routine costs of 

peacetime training exercises and regular equipment maintenance for existing Army units. Incremental costs are 

measured as those over and above that baseline.

The Army’s current policy goals imply that, in principle, 

each deployed billet (authorized space) in the active Army 

is matched by at least two billets in the rotation base, and 

each deployed Reserve or Guard billet is matched by an 

average of 6.5 rotational billets. In CBO’s calculations, 

therefore, the direct personnel cost of having a soldier fill 

a deployed billet to perform a logistics task would be 

multiplied by roughly the ratio of total billets (deployed 

plus rotational) to deployed billets (that is, by a factor of 

3:1 for active-duty soldiers or a factor of 7.5:1 for Reserve 

or Guard members). However, not all of those costs are 

incremental. If soldiers replaced contractors in performing any function, some staffed units might already exist 

in the Army’s force structure to perform the function, and 

additional staffed units might be available to populate a 

portion of the rotation base. 

In sum, the incremental costs of existing units are the 

costs of contingency operations (any crisis or conflict that 

might arise) over and above the costs of routine peacetime operations. But the incremental costs of the new 

units that would have to be added to the force structure 

are more extensive. They include the costs of acquiring 

the personnel and equipment to establish the units, the 

routine operating costs of those units during peacetime, 

and their contingency operations costs during wartime.

Headquarters Elements 

Federal civilians working within the military’s unit structure—whether in the United States or when deployed 

overseas—report up through the military chain of command in the same way that military personnel do. However, DoD civilians generally are not organized into 

deployable all-civilian units in the way that military personnel are organized into platoons, companies, and battalions; there are only a few isolated examples of purely 

civilian units with their own command structure.

In developing an option in which soldiers organized into 

Army units would perform many of the logistics functions currently under contract (Option 1 in this analysis), 

CBO added headquarters elements to coordinate the 

activities of the discrete Army units that would perform 

each individual function (firefighting team, supply company, and so forth). The same degree of coordination 

would be necessary if federal civilians rather than Army 
SUMMARY xi

units performed many of the contractor’s functions (as 

detailed in Option 2 in this analysis). Although the current civil service structure contains similar management 

personnel, they are not necessarily qualified to lead an 

operational unit into the field during hostilities. As a consequence, DoD would have to recruit and train people 

for the operational leadership positions.

Flexibility

Compared with the regulations under which the Army 

employs military personnel or federal civilians, the regulations under which contractors work generally give them 

more flexibility in setting pay and benefits and in hiring 

and firing workers. Because contractors need not make 

long-term commitments to their employees, they are in a 

better position to “surge” to meet a short-term demand 

for workers and then rapidly downsize later. Contractors 

are not bound by military or civil service pay tables or 

by legislative caps on various types of special pay and 

allowances, although some contractors may offer limited 

benefits. 

Contractors also may require their employees to deploy 

overseas for extended periods. They may choose to compensate those employees for the dangers involved and the 

extended separation from their families, or they may simply accept a higher turnover rate and replenish their 

workforce when necessary. And unlike the Army, contractors often make lateral hires of fully trained personnel. 

For both of those reasons, contractors do not need to 

maintain—and the government may not need to pay 

for—an extensive training establishment or rotation base 

in the United States. Because many contractor personnel 

(especially those who maintain weapon systems) are military veterans, they have already been trained.

Contractors might also be able to deploy to the wartime 

theater more rapidly than could support units from the 

Army Guard and Reserve (collectively, the “reserve component”), which contain two-thirds of the Army’s logistics personnel. During Operation Desert Shield (from 

August 7, 1990, through January 16, 1991), reservecomponent units that were activated to support activecomponent combat forces did not arrive in-theater until 

about 200 days after the operation began.4 Response 

times improved during Operation Iraqi Freedom: the average lag between activation of reserve-component units 

and their arrival in-theater was 158 days for full battalions and about 60 days for smaller detachments. By contrast, the LOGCAP contract requires that performance 

begin as early as 15 days after the Army notifies the contractor to proceed with a particular task order. Although 

the LOGCAP contractor has not always met that goal, it 

has generally responded faster than Army reservecomponent units. The contractor may be able to respond 

more rapidly because the process of activating reservecomponent units, including predeployment medical and 

dental examinations, is time-consuming. In addition, 

Army units generally transport their own equipment to 

the wartime theater, often via strategic sealift ships, 

whereas the contractor may be able to purchase much of 

the required equipment (such as trucks) in the theater 

itself or in adjoining countries.

A disadvantage of using contractors is that the contracts 

themselves may be inflexible, requiring military commanders to issue change orders to support contracts for 

even minor shifts in tasks.

Legal Issues

Military personnel, federal civilians, and contractor 

employees have different command-and-control mechanisms and different legal status. 

Command and Control

Military personnel are under the direct command and 

control of military commanders, and they are subject to 

criminal punishment for failing to obey a lawful order. 

Federal civilians may be under the control of military 

commanders permanently or temporarily during a conflict, but they would probably be subject only to administrative actions, such as reassignment or termination, if 

they failed to obey an order. The rights and duties of contractor employees are set forth in their particular contract 

with the government and more generally in the Federal 

Acquisition Regulations. A military commander can influence the contractor employees’ behavior through the 

contracting officer and the contractor’s desire to satisfy 

4. Congressional Budget Office, Structuring the Active and Reserve 

Army for the 21st Century (December 1997), p. 22.
xii LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

the customer, but the commander has limited direct control over any one employee.5

DoD designates certain of its civilian employees as 

“emergency-essential,” and those employees may be sent 

overseas—even involuntarily—during a crisis or conflict. 

Those who refuse to deploy are subject to administrative 

disciplinary action, including removal from federal 

service. 

Military commanders have less control over civilians and 

contractors than over military personnel who commit 

crimes during a contingency operation. Retired military 

personnel may remain under the jurisdiction of the Uniform Code of Military Justice (UCMJ) in their new roles 

as federal civilians or contractors, in which case they 

would be subject to court-martial for offenses committed 

even after their period of active-duty service. Other civilians and contractors are subject to the UCMJ only when 

they participate in a declared war, but not during undeclared wars or other contingency operations.

Legal Status 

Military personnel, except for medical personnel and 

chaplains, usually qualify as combatants under the 

Geneva Conventions, meaning that they are legitimate 

military targets for enemy forces but that they would be 

given prisoner-of-war status if captured. They also have 

some immunity from prosecution for hostile actions 

taken during combat.

In contrast, many federal civilians and contractors would 

qualify as noncombatants if they took no active part in 

hostilities, and they would not be legitimate military targets of enemy forces. Of course, they might be injured or 

killed during a military action against a legitimate target. 

The legal status of federal civilians and contractors performing functions closely linked to military operations—

such as intelligence, weapon systems maintenance, and 

resupply of forward-based forces—is less certain. Those 

personnel could be deemed to have taken an active part 

in hostilities. If so, they might not meet the definition of 

either noncombatants or lawful combatants, placing 

them at risk that enemy forces would declare them illegal 

combatants. They might still be granted some detainee 

protections if captured, but they could become legitimate 

targets and could also be prosecuted for actions taken 

during hostilities.

The distinction between combatant, noncombatant, and 

illegal combatant for personnel working for the U.S. military may not be important for a conflict like the current 

operation in Iraq. Since the end of major combat operations on April 30, 2003, insurgency forces have not been 

following the laws of armed conflict; for example, they 

have detonated explosives in public areas that are as likely 

to kill noncombatants (including Iraqi civilians) as combatants. In fact, noncombatants may be at greater risk 

because they are more vulnerable. Both U.S. contractors 

and federal civilians require protection in hostile areas. 

Either group may be armed in some circumstances, but 

both ultimately rely on the Army combat units they support to protect them.

Options

CBO considered four options that would change the mix 

of military personnel, contractors, and federal civilians 

providing various types of support to deployed Army 

forces (see Summary Table 1). 

Option 1: Rely More on Uniformed Military

Personnel to Perform Logistics Support

One approach would be to rely on a mix of active-duty 

and reserve military personnel to perform the role currently played by U.S. contractor personnel in LOGCAP. 

To quantify that option, CBO analyzed Task Order 59, 

the largest of the LOGCAP task orders (comprising functions such as base-camp operations and food services for 

up to 130,000 troops) associated with Operation Iraqi 

Freedom.6 Specifically, CBO compared the costs of that 

task order with estimates of the incremental costs of having uniformed soldiers provide those same functions. 

CBO’s analysis considered both the LOGCAP contractor’s and the Army’s costs of sustaining during peacetime 

the capabilities required to provide logistics support 

5. The Government Accountability Office (formerly the General 

Accounting Office) has determined that “DoD and the [military] 

services have not identified those contractors that provide mission 

essential services . . . [nor] developed backup plans to ensure that 

essential contractor-provided services will continue if the contractor for any reason becomes unavailable.” See General Accounting 

Office, Military Operations: Contractors Provide Vital Services to 

Deployed Forces but Are Not Adequately Addressed in DoD Plans, 

GAO-03-695 (June 2003).

6. As of December 2, 2004, Task Order 59 employed 51 percent of 

LOGCAP employees worldwide (including foreign nationals and 

subcontractors).
SUMMARY xiii

Summary Table 1.

Alternatives to the Current Mix of Military Personnel, Federal Civilians, and

Contractors Examined in This Analysis

Table 1 (Summary). Alternatives to the Current Mix of Military Personnel, Federal Civilians, and Contractors Examined in This Analysis

Source: Congressional Budget Office.

Note: LOGCAP = Logistics Civil Augmentation Program.

during wartime. In particular, CBO assumed that the 

Army would maintain a rotation base in the United States 

for returning units; some units in the rotation base do not 

exist and would have to be created.

To compare the cost of using the LOGCAP contractor 

and the cost of using Army support units, CBO had to 

make assumptions about the frequency, duration, and 

spacing of wartime conflicts. The notional scenario that 

CBO developed alternates five-year wartime periods with 

five-year peacetime periods over a total horizon of 20 

years. CBO also examined seven other scenarios and 

determined that its major findings hold true regardless of 

the specifics of the selected scenario.

In CBO’s estimation, when only the wartime periods 

are taken into account, the Army’s support units could 

perform the tasks in the largest LOGCAP task order for 

virtually the same cost as the contractor. However, that 

outcome changes when the peacetime periods are considered. The contractor’s peacetime costs—primarily to 

maintain its management support plans and its vendor 

database—amount to only a few million dollars per year. 

By contrast, CBO assumed that the Army would maintain a rotation base consisting of about 80 existing support units plus nearly 800 new support units. The costs 

to acquire the new units and to conduct routine training 

and other operations with both new and existing units 

would be substantial. Therefore, including both the wartime and peacetime costs, the Army’s total cost would be 

about 90 percent higher than the contractor’s cost under 

Task Order 59, CBO estimates. Also, some aspects of the 

quality of service, such as the comfort of living quarters, 

are probably higher under LOGCAP than they would be 

if the Army provided the same services. CBO attempted 

to adjust for quality whenever possible in its cost analysis, 

but some differences may remain. 

Option 2: Rely More on Federal Civilians 

to Perform Logistics Support

This option would rely on federal civilians to perform 

the role currently played by U.S. contractor personnel in 

LOGCAP. Instituting this option would probably require 

making significant changes to the civil service system. Because the ramifications of those changes are unknown 

and their details are difficult to define, CBO’s analysis 

discusses this option in qualitative terms rather than providing a detailed cost estimate.

Federal civilians offer several advantages over contractor 

personnel. Unlike contractors, federal civilians are allowed to perform inherently governmental tasks, such as 

policymaking and contracting. In addition, civilians of 

the appropriate pay grade may operate as equal members 

of a military staff. Federal civilians fall under the supervision of higher-ranking military or civilian officials; in 

turn, they may supervise lower-ranking military or civilian personnel.

Despite those advantages, using federal civilians to 

replace contractor personnel broadly on a large-scale 

logistics contract such as LOGCAP would present many 

obstacles. Most of those obstacles derive from the requirements of the civil service system, which could be overcome only through significant changes to civil service 

policies and practices. Some of those requirements may 

Option 1

Option 2

Option 3

Option 4

Replace: With:

Deployed system contractors (technical representatives) Department of Defense civilians

Deployed logistics (LOGCAP) contractor personnel

Deployed logistics (LOGCAP) contractor personnel Department of Defense civilians

Active and reserve Army units

performing logistics, installation and facility 

management, and physical security functions 

Active-duty personnel (some of whom are deployed) Contractors who have a military reserve affiliation
xiv LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

be eliminated by DoD’s new National Security Personnel 

System, but that system has not yet been implemented 

and its effectiveness remains unknown.

One obstacle to using federal civilians is the process that 

agencies must go through to hire new civil servants, a 

process that requires coordination between the hiring 

agency and the Office of Personnel Management. A second obstacle is that the General Schedule (GS), which 

determines the salaries of most civil servants, is relatively 

rigid. Thus, an employee at GS-11, step 5, earns the same 

salary regardless of whether he or she is a budget analyst 

or a geologist. Moreover, the federal government is more 

limited than contractors in the bonuses and other compensation tools it has available to attract skilled workers 

as quickly as may be required to support combat operations.

A third obstacle is that DoD civilians are generally not 

organized into deployable units with their own command 

structure and headquarters elements. The Army would 

need to establish those elements and maintain them even 

during peacetime so as to have them available when conflicts arose.

Finally, in terms of the training and rotation base required, this option lies somewhere between the current 

use of contractor personnel and the use of military personnel. Whereas the Army’s culture discourages the lateral entry of senior military personnel, it does not discourage the lateral entry of trained civilians. Thus, the 

Army would not have to train civilians to the same degree 

that it does military personnel. Still, the Army might 

need to expand its training establishment in the United 

States to provide civilian logistics personnel with advanced and continuing training opportunities. Moreover, 

if federal civilians were expected to deploy with the same 

frequency and duration as military personnel, the Army 

might need to establish and maintain a rotation base in 

the United States to avoid retention problems stemming 

from protracted family separation.

CBO’s detailed cost analysis of Option 1 (having military 

personnel replace the LOGCAP contractor) indicates 

that the need for a rotation base to support Army deployments is the main factor pushing up the Army’s costs relative to those of the LOGCAP contractor. CBO did not 

conduct a similarly detailed analysis of the costs of using 

federal civilians. However, rotation-base considerations 

alone would tend to make this option more costly than 

using the LOGCAP contractor but potentially less costly 

than using Army logistics units.

Option 3: Substitute Federal Civilians for Deployed 

Contractors Who Support Weapon Systems

DoD maintains weapon systems in the United States 

using a mix of its own “organic” maintenance personnel 

(enlisted technicians assigned to operational units such as 

aircraft squadrons or artillery battalions), federal civilians 

and contractor personnel working at government depots, 

and contractor personnel working at their own commercial facilities. When the military deploys weapon systems 

overseas, it supplements organic maintenance personnel 

with small teams of some of the same civilians or contractors who helped maintain those systems in the United 

States. The contractors who provide that support are 

known as system contractors, and the personnel they employ are known as technical representatives, or “tech 

reps.” Under this option, federal civilians would assume 

the entire responsibility for supplementing organic maintenance personnel and replace the contractor tech reps 

who currently deploy in that role. (This option is more 

limited in scope than Option 2, under which federal 

civilians would replace the considerably larger number 

of contractor personnel who provide large-scale logistics 

support under LOGCAP.)

CBO did not conduct a detailed cost analysis of this 

option. It determined that the range of base salaries 

among contractor tech reps roughly matches the base salaries of federal civilians with similar skills—those in 

grades GS-11 through GS-13. Comparing the total cost 

of services provided by contractors and by government 

agencies is difficult, however, because government cost 

data rarely extend beyond personnel costs. Contractors 

bill the government for a wider array of costs, including 

depreciated capital, building lease payments, managerial 

overhead, and insurance. 

Costs incurred during deployment may not be the dominant factor in evaluating this option. Most system maintenance occurs in the United States, not during overseas 

deployments. Thus, the life-cycle maintenance costs of a 

weapon system are largely determined by peacetime considerations. The decision of who supports weapon systems during wartime depends on who has been maintaining them during peacetime. That decision is generally 

determined by the Army’s broader acquisition strategy, 

including such factors as the time frame for fielding the 

system and the relative availability of skills. In some cases, 
SUMMARY xv

for example, the Army may be unable to retain enough 

maintenance personnel in its military or civilian workforce. In other instances, a system may be fielded in such 

small numbers, either initially or even in the long run, 

that developing an in-house maintenance capability is not 

cost-effective. By contrast, a potential disadvantage of 

using system contractors is that the Army may never develop the specific skills and experience necessary to support a particular system itself, should the need arise. 

Those kinds of considerations are more likely to determine how equipment and systems are maintained than 

are the relative cost of sending a limited number of people overseas to support deployed forces in the field.

Option 4: Establish a New Type of Military 

Personnel—Sponsored Reserves

This option would create a new labor category that 

blends the characteristics of contractor personnel and 

military reservists. Under this concept, individuals would 

work for U.S. defense contractors during peacetime but 

would also be members of the military reserves and 

would deploy as activated reservists during conflicts. 

Those individuals—which this study calls sponsored reservists—would differ from DoD’s roughly 70,000 dualstatus civilians (also known as military technicians) because they would work as contractors rather than as federal civilians during peacetime.

Under this option, contractors would agree to maintain 

a specified portion of their workforce as members of the 

Individual Ready Reserve. Those reservists do not participate in regularly scheduled training with reserve units 

(one weekend per month and an additional two-week 

period every year), but under this concept, they would remain proficient in their military specialty through a combination of their routine work as contractors and, if necessary, additional periodic training. A sponsored reservist 

would act as a contract employee during peacetime but 

would agree to be activated to military status when deploying to perform the same job overseas. Currently, 

many contractors also serve as reservists, but when they 

deploy as military personnel they do different jobs or 

work with different units than during peacetime. Under 

the sponsored-reserve concept, the contractor would perform the same job but would act as a member of the military when deployed.7

This option would gradually institute a program of sponsored reservists to reduce by 20 percent the total number 

of active-duty personnel providing logistics, installation 

or facility management, and physical security functions. 

Specifically, 20,000 active-duty personnel in those occupations would be replaced with sponsored reservists. That 

replacement would be phased in over four years, beginning in 2007. Some of the 20,000 affected personnel are 

currently deployed to the Iraqi or Afghan theaters, and 

some (presumably a smaller number) might remain deployed throughout the implementation period of the option. The effect of the option on forces in-theater would 

be to replace the deployed subset of the 20,000 activeduty personnel with activated sponsored reservists.

CBO views Options 1 and 4 as mutually exclusive alternatives because some of the logistics functions that Option 4 would transfer from active-duty personnel to the 

new sponsored reservists are the same functions that 

Option 1 would transfer from the LOGCAP contractor 

to uniformed military personnel (including those on 

active duty as well as traditional reservists).

Successfully converting 20,000 positions—and reducing 

active-duty end strength by that amount—could save 

DoD about $3 billion from 2007 through 2011.8 Some 

of those savings would occur because sponsored reservists 

would undertake their military-specific responsibilities 

only when they deployed. During peacetime, sponsored 

reservists would have more time available to perform 

their jobs, so fewer of them could be substituted for a 

given number of active-duty military personnel. 

The savings cited above assume that the active-duty personnel replaced by sponsored reservists would be removed 

from the military’s end strength. If that was not the case, 

the replaced military personnel would be freed up to perform other functions, but the savings would be considerably smaller. The amount of savings realized would depend on a more detailed specification of the disposition 

of the replaced military personnel. 

7. This approach was outlined in Congressional Budget Office, Budget Options (February 2005), Option 050-33, pp. 60-61. It is similar to a program of the British Ministry of Defense.

8. End strength is the number of personnel on active duty at the end 

of the fiscal year.
xvi LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

This option, which would probably require legislation to 

implement, would place deployed contractors within the 

military chain of command, affording them the protections of military status and better ensuring military command and control. In particular, the conduct of sponsored reservists would be addressed by the Geneva 

Conventions and the UCMJ. 
1

Background Information on 

Civilian and Contractor Support of the Military Chapter 1: Background Information on Civilian and Contractor Support of the Military

The U.S. military has always relied on civilian support, in the form of both contractors and federal civilians. 

Field armies in the 1700s and 1800s relied on contracted 

wagons and drivers; contractors have built bases, depots, 

ports, and roads; and almost all medical care was once 

provided by civilians.1

 Today, the Department of Defense 

(DoD) employs government civilians to perform many 

functions: teaching school; managing installations; maintaining buildings; issuing paychecks; testing, designing, 

and repairing weapon systems; conducting basic research; 

and overseeing contracts.

Two special types of employees blend the distinction between military and federal civilian personnel. Dual-status 

civilians (also called “military technicians”) are federal 

workers who serve with Reserve and National Guard 

units. They serve as civilians while their unit is at home; 

but when the unit deploys overseas, they become reservists serving on active duty. Civilian mariners are federal 

civilians who crew ships operated by the Military Sealift 

Command, including, for example, ships in the Naval 

Fleet Auxiliary Force, which provide fuel, food, ammunition, spare parts, and other supplies to U.S. Navy ships. 

In addition, civilian mariners operate the Navy’s two hospital ships, which (when augmented by a uniformed 

Navy medical detachment) provide emergency medical 

care within a wartime theater for deployed U.S. combat 

forces.2

The functions performed by contractors expanded into 

new areas during World War II. The increasing complexity of military aircraft, signal equipment, and vehicles 

made manufacturers’ technical representatives a common 

presence, even at the front lines of a battle.3

 The rapid introduction of new and improved models of equipment 

and frequent changes in operating and maintenance requirements also contributed to that trend. In addition, 

contractors built ordnance repair facilities to support 

Allied operations in North Africa and the Middle East.4

Both the Korean War and the Vietnam War saw even 

greater use of contractors in supporting weapon systems, 

establishing base camps and depots, and providing other 

logistical functions. For example, by one estimate, more 

than 50 percent of the direct-support helicopter maintenance needed during those two wars was provided by 

contractors.5

 According to another estimate, about 2,000 

contractor personnel were stationed in Vietnam in 1969 

to provide aviation maintenance (further supplemented 

by an unspecified number of Army civilians).6 Some authors attribute the increase in weapon system support 

during those two wars to the introduction of technically 

advanced systems. 

After the Vietnam War and with the implementation of 

the All-Volunteer Force in the 1970s, some observers 

were concerned about the military’s reliance on contractor support. A Defense Science Board report in 1982 

noted that although contractor employees generally perCHAPTER

1. Maj. William W. Epley, “Civilian Support of Field Armies,” Army 

Logistician (November/December 1990), pp. 30-35.

2. See the Web site of the Military Sealift Command’s Naval Fleet 

Auxiliary Force (www.msc.navy.mil/pm1/).

3. Charles R. Shrader, Contractors on the Battlefield, Landpower 

Essay No. 99-6 (Arlington, Va.: Association of the United States 

Army, Institute of Land Warfare, May 1999).

4. Ibid., p. 7.

5. Epley, “Civilian Support of Field Armies,” p. 33.

6. Shrader, Contractors on the Battlefield, p. 8.
2 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

formed well during crises and combat, there were no formal mechanisms to ensure their continued performance.7

A Congressional committee that held hearings in 1984 

on contractor support of forward-based weapon systems 

concluded that many contractor personnel intended to 

leave the theater of operations if hostilities arose.8

 However, the historical record provides no firm evidence that 

such departures took place.9

Although no extended combat operations occurred during the 1980s, DoD’s policies appeared to steer maintenance support away from contractors and back toward 

“organic” sources (those within the military’s unit structure). According to DoD Directive 1130.2, issued in January 1983, “Contractor field services (CFS) . . . shall be 

used when necessary to accomplish a military mission, 

when provision of services by DoD engineering and technical services specialists is impractical and when required 

skills are not available within the Military Departments

. . . the use of CFS is limited to a period not to exceed 12 

months after the DoD components achieve selfsufficiency in the use of the new equipment or system.” 

In July 1990, however, DoD canceled that directive, and 

the pendulum swung back toward the use of contractors.

The Military’s Recent Use of 

Contractor Support 

The Army’s largest single use of contractors for logistics 

support has been through its Logistics Civil Augmentation Program (LOGCAP), a contract that the Army uses 

to provide support to its deployed combat forces.10

Although the Army began to formulate LOGCAP as 

early as 1985, the first contract was not signed until 

1992. Three LOGCAP contracts have been awarded to 

date. The Army awarded the first one—retrospectively 

called LOGCAP I—to Brown and Root Services (now 

Kellogg, Brown & Root, or KBR, a subsidiary of Halliburton Corporation) in 1992. LOGCAP I was a five-year 

contract in effect through 1997. It covered several locations, including the Balkans (see Table 1-1).11

LOGCAP II, another five-year contract, was competitively awarded to DynCorp in 1997. However, the 

United States Army Europe (USAREUR) preferred to 

continue using Brown and Root as its logistics support 

contractor. To that end, USAREUR awarded Brown and 

Root a sole-source Balkans Support Contract (BSC) in 

1997. USAREUR put the BSC renewal contract up for 

competition in 1999, and KBR won that competition 

and retained the contract for an additional five-year term. 

The BSC ran concurrently with DynCorp’s LOGCAP II 

contract, although there was relatively little activity 

on the latter. The current LOGCAP III contract was 

competitively awarded to KBR in December 2001. 

7. Defense Science Board, Report of the Task Force on Contractor Field 

Support During Crises (October 1982).

8. House Committee on Government Operations, Essential Civilian 

Support of DoD Frontline Weapon Systems Is Not Assured (August 2, 

1984), p. 6.

9. There is only one known instance in the past 30 years in which 

U.S. contractor personnel may have attempted to abandon their 

posts, and that instance is subject to considerable dispute. In 

August 1976, a group of American soldiers attempted to cut down 

a tree in the demilitarized zone separating North Korea and South 

Korea. Soldiers from North Korea surrounded the Americans and 

killed them using the Americans’ ax. That incident was unnerving 

to U.S. personnel stationed in South Korea, including a contingent of U.S. contractors. Some people have claimed that contractor personnel deserted their posts in anticipation of escalated 

hostilities. The Defense Science Board, upon reviewing U.S. 

Army records, determined that although some contractor personnel expressed a desire to leave the area, none actually did so. Still, 

those concerns continue to be raised—for example, in General 

Accounting Office (now the Government Accountability Office), 

Military Operations: Contractors Provide Vital Services to Deployed 

Forces but Are Not Adequately Addressed in DoD Plans, GAO-03-

695 (June 2003). 

10. The other military services have similar, but smaller, logistics support contracts. The Air Force Contract Augmentation Program 

was awarded in 2002 to Readiness Management Support L.C., a 

subsidiary of IAP Worldwide Services, Inc. It is an eight-year costplus-award-fee contract. The Navy uses the Construction Capabilities Contract, a five-year cost-plus-award-fee contract awarded 

to Kellogg, Brown & Root in 2000. Because of the much larger 

size and scope of the Army’s contract, CBO focused on LOGCAP 

for this study.

11. Some of the dollar totals in Table 1-1 are rough-order-ofmagnitude estimates. In the interest of expediency, the government may authorize a contractor to proceed with work on the 

basis of such estimates, which are prepared in good faith by the 

contractor. The government then begins reimbursing the contractor as costs are incurred. Within a notional 180 days or before 50 

percent of the work is completed (whichever occurs first), the contract is “definitized”—the government and the contractor reach 

agreement on the terms, specifications, and price of the task 

orders that make up the contract.
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 3

Table 1-1.

Costs of and Locations Served by LOGCAP and Balkans Support Contracts

Table 1-1. Costs of and Locations Served by LOGCAP and Balkans Support Contracts

Source: Congressional Budget Office based on data from Halliburton Corporation (agreed, or definitized, costs for LOGCAP I and the Balkans 

Support Contract); Department of the Army, Communications and Electronics Command (obligated funding for LOGCAP II); and 

Kellogg, Brown & Root (rough-order-of-magnitude estimates for LOGCAP III).

Note: LOGCAP = Logistics Civil Augmentation Program.

LOGCAP III is a 10-year contract consisting of one base 

year plus nine option years.12

During Operations Desert Shield and Desert Storm 

(henceforth referred to as Gulf War I), the Army used 

both civilian contractors and federal civilians extensively. 

Logistics support for Gulf War I was not provided by 

LOGCAP, which was still in the formulation stage and 

had not yet been awarded. Instead, both the U.S. military 

and the Saudi government purchased goods and services 

from a variety of firms. For example, the U.S. military engaged 76 U.S. contractors, who deployed about 9,200 

employees to Iraq in support of the war.13 In addition, 

the Saudi government provided or paid for 1.5 million 

gallons per day of petroleum products, as well as 4,000 

trucks and more than $2 billion worth of food over the 

duration of the conflict.14

According to some researchers, the support provided by 

contractors during Gulf War I was vital to the success of 

military operations.15 The need to quickly counter Iraqi 

aggression led to combat units being rapidly deployed to 

the wartime theater without the organic support units 

required to sustain operations. Contracted support provided for the reception, staging, onward movement, and 

sustainment of the troops. Army logistics units were deployed to the theater, but at a later date and in fewer 

numbers than would otherwise have been necessary if 

contracted support had not been available. In addition, 

contractors supported such systems as the M1, M1A1 

and M1A2 versions of Abrams tanks; Bradley fighting vehicles; Kiowa Warrior (OH-58D) helicopters; tubelaunched, optically tracked, wire-guided (TOW) missiles 

and Patriot missiles.16 The degree to which contractors

Contract Years Locations

LOGCAP I 1992 to 1997 Balkans, Haiti, Italy, Rwanda, 815

Saudi Arabia, Somalia

LOGCAP II 1997 to 2002 Bosnia 81

Balkans Support Contract 1997 to 2002 Balkans 2,500

LOGCAP III 2001 to 2004 Afghanistan, Iraq, Kuwait, Turkey, other 15,350

Total Cost 

(Millions of dollars)

12. The sources for this history include two reports by Frank Camm 

and Victoria A. Greenfield: Risk Management and Performance in 

the Balkans Support Contract, MG-282 (Santa Monica, Calif.: 

RAND Corporation, 2005), pp. 3-4; and How Should the Army 

Use Contractors on the Battlefield? Assessing Comparative Risk in 

Sourcing Decisions, MG-296 (Santa Monica, Calif.: RAND Corporation, 2005), pp. 137-138. KBR also provided some of this 

information to the Congressional Budget Office in a briefing on 

November 30, 2004.

13. General Accounting Office, DoD Force Mix Issues: Greater Reliance 

on Civilians in Support Roles Could Provide Significant Benefits, 

GAO/NSIAD-95-5 (October 1994), p. 5; and Eric A. Orsini and 

Lt. Col. Gary Bublitz, “Contractors on the Battlefield: Risks on 

the Road Ahead?” Army Logistician, vol. 31, no. 1 (January/February 1999), pp. 130-132.

14. Congressional Budget Office, Structuring the Active and Reserve 

Army for the 21st Century (December 1997), p. 10.

15. John C. Tillson, The Role of External Support in Total Force Planning (Alexandria, Va.: Institute for Defense Analyses, 1997); and 

John Brinkerhoff, External Support for the Army in the Persian Gulf 

War (Alexandria, Va.: Institute for Defense Analyses, 2003).

16. George B. Dibble, Charles L. Horne III, and William F. Lindsay, 

Army Contractors and Civilian Maintenance, Supply, and Transportation Support During Operations Desert Shield and Desert Storm, 

vol. 1, Study Report AR113-01RD1 (Bethesda, Md.: Logistics 

Management Institute, June 1993); and James C. Hyde, “Defense 

Contractors Serve on the Front Lines of Operation Desert 

Storm,” Armed Forces Journal International (March 1991), p. 32.
4 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Figure 1-1.

Selected Logistics Functions Provided by Army Units and Contractors 

During Operations Desert Shield and Desert Storm

Figure 1-1. Selected Logistics Functions Provided by Army Units and Contractors During Operations Desert Shield and Desert Storm

Source: Congressional Budget Office based on data reported in John C. Tillson, The Role of External Support in Total Force Planning

(Alexandria, Va.: Institute for Defense Analyses, 1997).

augmented or offset organic Army capabilities varied for 

each of the logistics functions provided. 

Other researchers have estimated that although fewer 

than 60,000 Army logistics troops were in-theater during 

Gulf War I, more than 70,000 additional soldiers would 

have been required to replicate all of the functions that 

contractors provided.17 According to that research, contractors provided about half of the total transportation 

services (trucks of various sizes) used in the theater, as 

well as half of the water supply (see Figure 1-1). Contractors were the only providers of services such as engineering construction, laundry, and railway terminal operation.

As of December 2004, the current LOGCAP contractor 

had supplied about 44,000 employees to Southwest Asia, 

including nearly 15,000 U.S. expatriates (see Table 1-2). 

Of those 44,000 employees, some 38,000 (including 

nearly 12,000 U.S. expatriates) were either stationed in 

Iraq or were stationed elsewhere (Kuwait or Turkey, for 

example) but were likely to deploy to Iraq at some point 

as part of their duties. Most of the remaining 6,000 employees were based in Afghanistan and the nearby republic of Uzbekistan in support of Operation Enduring Freedom (OEF).

The Army’s logistics capability resides in a section of its 

force structure known as combat service support, or CSS 

(see Box 1-1 for more information). As of May 2005, the 

Army had about 46,000 CSS personnel stationed in Iraq 

Cargo Truck Companies

Engineer Construction Battalions

Quartermaster/Field Service Companies

Heavy Truck Companies

Laundry and Renovation

Maintenance Companies

Petroleum Supply Companies

Petroleum Truck Companies

Railway Battalions

Terminal/Cargo Companies

Water Detachments

Water Supply Companies

Water Teams

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

Contractors

Soldiers

Number of Personnel

17. Tillson, The Role of External Support in Total Force Planning.
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 5

Table 1-2.

LOGCAP and U.S. Army Logistics Personnel in Southwest Asia

Table 1-2. LOGCAP and U.S. Army Logistics Personnel in Southwest Asia

Source: Congressional Budget Office based on data from Kellogg, Brown & Root (LOGCAP data as of December 2004), the Defense Manpower Data Center (Army data based on counts of soldiers by occupation), and the Congressional Research Service (Army personnel

deployed to Operation Iraqi Freedom).

Notes: LOGCAP = Logistics Civil Augmentation Program.

LOGCAP personnel in Southwest Asia are stationed in Iraq and Kuwait as well as in Afghanistan, Djibouti, Georgia, Turkey, the United 

Arab Emirates, and Uzbekistan.

LOGCAP counts exclude small numbers of U.S. Army and other Department of Defense military and civilian personnel who provide 

contract administration and oversight of LOGCAP.

Host-country nationals are citizens of the country in which the work is being performed. Third-country nationals are citizens of neither 

the United States nor the host country.

in support of Operation Iraqi Freedom (OIF) and a total 

of 67,000 CSS personnel in Southwest Asia as a whole 

(including OEF).18

Specifications Under the Army’s 

Logistics Civil Augmentation Program

When it was initiated in 1992, LOGCAP was viewed 

by many observers as an innovative type of contract to 

support deployed Army forces. During peacetime, the 

LOGCAP contractor works with Army staff to plan logistics support of wartime or contingency operations. The 

contractor also participates in military exercises to ensure 

that its plans integrate well with the overall plans of the 

forces being supported. The contractor maintains a 

“worldwide management plan,” which states how the 

contractor intends to mobilize its resources (personnel, 

subcontractors, materials, and so on) in response to a 

conflict. Part of that plan involves maintaining a database 

of current vendors.

The performance goals that the contractor must meet are 

usually stated in advance in concrete terms. For example, 

the contractor is required, at a minimum, to support a 

force of up to 25,000 troops (arriving in-theater by air 

and sea) for up to 180 days. The Army may also exercise 

an option that doubles the supported population to 

50,000 troops and the duration to 360 days. As those 

LOGCAP Personnel

U.S. expatriates 11,860 14,670

Third-country nationals 900 1,390

Host-country nationals 35 1,280

Subcontractors and labor brokers 25,510 26,890 _____ _____

Total 38,305 44,230

U.S. Army Combat-Service-Support Personnel 45,800 67,330

Total, Operation

Iraqi Freedom and 

Iraq and Kuwait Operation Enduring Freedom

18. The Defense Manpower Data Center provided CBO with counts 

of all Army personnel deployed to either Operation Iraqi Freedom 

or Operation Enduring Freedom, as determined by their eligibility for a combat-zone tax exemption (the tax exemption is 

described at www.defenselink.mil/militarypay/pay/tax/

10_combatzone_05.html). CBO then sorted those personnel by 

Army occupational code and categorized each soldier as either 

combat arms, combat support, or combat service support using an 

occupational directory found in Claire M. Levy and others, Army 

PERSTEMPO [Personnel Tempo] in the Post Cold War Era, MR1032 (Santa Monica, Calif.: RAND Corporation, 2000), Appendix C. Finally, CBO scaled the three subtotals down to conform to 

an independent estimate of the total number of Army soldiers 

deployed to Operation Iraqi Freedom alone; that independent 

estimate of 104,000 soldiers as of May 5, 2005, is contained in 

Linwood B. Carter, Iraq: Summary of U.S. Forces, CRS Report for 

Congress RL31763 (Congressional Research Service, updated 

May 23, 2005), available at www.fas.org/sgp/crs/mideast/

RL31763.pdf.
6 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

examples illustrate, performance goals for the LOGCAP 

contract are stated in terms of outcomes, not inputs. The 

contractor has broad latitude on the mix of labor, choice 

of subcontractors, transportation arrangements, and 

other aspects of organizing the production process to 

meet the specified goals.

LOGCAP is an indefinite delivery/indefinite quantity 

contract. Under such a contract, the Army awards the 

contractor the right to sell goods and services during a 

fixed period of time at prices within a negotiated range. 

However, the contract does not specify a firm quantity of 

goods and services, instead providing for the issuance of 

orders for the performance of tasks during the period of 

the contract. The task orders specify a schedule for the 

number of troops to be supported at various future dates, 

their geographic location and dispersion within a theater, 

the mix of services provided (within the overall menu delineated in the contract), and the duration of the effort. 

The contractor must begin providing the requested support as early as 15 days after a task order is issued.

As of March 10, 2004 (the date that the Congressional 

Budget Office collected data from KBR), the Army had 

issued roughly 90 task orders under LOGCAP III. Including the staging sites, LOGCAP III was operating out 

of 65 areas in eight countries and providing a broad range 

of services (see Box 1-2). Combined Joint Task Force 7 

was the most senior U.S. military command directly supported by the contractor in the Iraqi theater. The contractor had also supported several additional organizations in 

Iraq, including the Coalition Provisional Authority, the 

New Iraqi Army, the Iraq Survey Group, the Defense 

Box 1-1.

Combat Service Support in the U.S. Army’s Force Structure

The Army’s deployable forces are also known as 

Table of Organization and Equipment units. The 

Army divides such units into three large categories: 

combat, combat support, and combat service support (CSS). For the purposes of this study, the Congressional Budget Office’s (CBO’s) definition of “logistics” is identical to the Army’s definition of CSS. 

Conceptually, the Army defines CSS as “The essential capabilities, functions, activities, and tasks necessary to sustain all elements of operating forces in theater at all levels of war. . . . [I]t includes but is not 

limited to that support rendered by service forces in 

ensuring the aspects of supply, maintenance, transportation, health services, and other services required 

by aviation and ground combat troops to permit 

units to accomplish their missions in combat.”1

Thus, CSS consists of support functions that do not 

directly involve combat but whose purpose is to help 

sustain combat troops on the battlefield.

The term “logistics” has various definitions within 

the Department of Defense. For example, the Joint 

Staff defines the term rather broadly to include combat engineering in addition to other support functions. The Army’s definition of CSS is narrower, 

excluding combat engineering, which it classifies instead as combat support. Again, CBO uses the 

Army’s concept rather than the Joint Staff’s concept 

throughout this study.

CSS units are drawn from all three components of 

the total Army: the active Army, the Army National 

Guard, and the Army Reserve. All of the specific categories and functions within CSS are described in 

the following list:2

Band support: Provide music to enhance unit cohesion and morale.

Explosive ordnance disposal: Neutralize conventional, nuclear, chemical, and biological munitions 

and devices that present a threat to military operations and civilian facilities, materiel, and personnel.

1. Army Field Manual 4-0, Combat Service Support (August 

2003). 2. Ibid.; and Army Field Manual 3-0, Operations (June 2001).
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 7

Intelligence Agency, and the Multinational Division of 

coalition troops.19 In the Afghan theater, the contractor 

was supporting Combined Joint Task Force 180 as well as 

the new Afghan National Army.20 LOGCAP III was also 

supporting Army and Marine Corps forces, albeit to a 

much more limited extent, in Djibouti, Georgia, Kuwait, 

Turkey, the United Arab Emirates, and Uzbekistan.

KBR estimated contract costs in advance of beginning 

work on each respective task order under LOGCAP III. 

The total estimated cost of the various task orders executed between December 2001 and December 2004 was 

$15.4 billion. However, actual costs could be lower or 

higher as the work is done and the Army issues change 

orders or other contract modifications. Through June 

2005, the Army had obligated about $12 billion to 

LOGCAP III.21 The final “definitized” costs may differ.22

Box 1-1.

Continued

Field services: Feed, clothe, and provide personal 

services for troops, including clothing exchange, 

laundry, showers, textile repair, food services, sanitation, mortuary affairs, and mail services.

Financial management: Provide services to commanders in the areas of finance (pay for vendors, 

accounting, central funding, technical advice, and 

policy guidance) and resource management (technical advice on resource management implications and 

the cost of operations). 

Health support: Maintain the force by preventing 

disease-related and non-battle-injury casualties; 

remove casualties from the battlefield; provide 

forward-based medical treatment, including en route 

care during medical evacuation; ensure adequate 

medical supplies and equipment; and provide veterinary, dental, and laboratory services. 

Human resource support: Provide all of the activities and systems needed for manning the force, personnel support, and personnel services (including 

personnel accounting; casualty management; postal 

operations; and morale, welfare, and recreation) to 

service members, their families, Army civilians, and 

contractors. 

Legal support: Perform operational law duties and 

provide advice and services in military justice, international law, administrative law, civil law, claims, 

and legal assistance in support of the command, control, and sustainment of operations.

Maintenance: Keep materiel and equipment in operational condition, or update and upgrade its capability.

Religious support: Provide and perform religious 

support services to protect the free exercise of religion. Those include personal delivery of rites, sacraments, ordinances, spiritual care, religious counseling, spiritual fitness training and assessment, and 

worship services. Also included are advice to commanders on matters of religion, morals, morale, and 

coordination with nongovernmental organizations 

and private voluntary organizations.

Supply: Acquire, manage, receive, store, and issue all 

classes of materiel. Includes the turn-in, exchange, or 

disposition of items.

Transportation: Move and transfer units, personnel, 

equipment, and supplies to support operations.

19. Coalition countries whose troops were supported include Bulgaria, Hungary, Latvia, Poland, and Ukraine.

20. Combined Joint Task Force 180 was redesignated as Combined 

Joint Task Force 76 in April 2004, when the Army’s 25th Infantry 

Division (Light) replaced the Army’s 10th Mountain Division as 

the primary U.S. combat unit in Afghanistan.

21. Griff Witte, “Halliburton’s Higher Bill,” Washington Post, July 6, 

2005, p. D-1.

22. For an explanation of definitized costs, see footnote 11 on page 2.
8 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

LOGCAP III is a cost-plus-award-fee contract. As such, 

the contractor is reimbursed for all reasonable, allowable, 

and allocable costs to perform the work, plus a base fee 

and an award fee. The base fee is 1 percent of the estimated contract cost that is negotiated in advance (not the 

actual costs incurred). The award fee is capped at 2 percent of the estimated contract cost. The precise amount 

of the award fee depends on the federal government’s 

evaluation of the contractor’s performance, which is continually monitored by an appointed LOGCAP Award Fee 

Evaluation Board. The board recommends an award fee, 

although that recommendation may be overruled by the 

Award Fee Determining Officer, who makes the final decision. The board computes a numerical rating based on a 

composite of scores for technical performance, cost performance, and management. The award fee increases 

with the contractor’s numerical rating (up to the 2 percent cap), moving through successive award bands labeled “average,” “good,” “very good,” and “excellent.”

In May 2005, the Army announced award fees for six of 

the task orders that KBR had performed under LOGCAP 

III, covering the period from June 13, 2003, through December 31, 2004. Included was Task Order 59, the largest single task order within LOGCAP III, the costs of 

which CBO analyzes in detail below. The Army rated 

KBR’s performance “very good” or “excellent” on all six 

task orders evaluated, and it awarded 88 percent of the 

available award fee pool. Specifically, the Army awarded 

$72 million from a pool of $82 million for all six task 

orders combined, including $55 million from a pool of 

$63 million for Task Order 59.23

LOGCAP is managed by a program manager within the 

Army Materiel Command (AMC). The program management office works with the contractor to develop the 

contingency plans (the contractor’s first deliverable item). 

During the actual execution of the task order, the contractor is supervised on-site by the local commander’s 

contracting officer representative and by AMC’s Army 

Field Support Command. In addition, the Defense ConBox 1-2.

Summary of Services Provided by the LOGCAP III Contractor

Under the current Logistics Civil Augmentation Program (LOGCAP), contractors provide the following 

services to the U.S. Army in Southwest Asia:1

B Air-terminal and airfield operations;

B Ammunition storage and supply;

B Camp operations:

• construction and maintenance,

• electric power generation,

• food service and dining facilities,

• hazardous-materials management,

• laundry services,

• operations and maintenance, and

• water and ice distribution;

B Communications and information technology;

B Equipment maintenance;

B Firefighting services;

B Fuel distribution;

B Morale, welfare, and recreation;

B Procurement and property management; and 

B Transportation. 1. Kellogg, Brown & Root, “LOGCAP Current Operations 

Update Brief” (February 2004).

23. Charles R. Babcock, “KBR Gets $72 Million in Bonuses for Iraq 

Work,” Washington Post, May 11, 2005, p. E-4.
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 9

tract Management Agency verifies that the contractor’s 

cost, performance, and delivery schedule comply with the 

contract language. That agency also manages and tracks 

all government-furnished equipment that the contractor 

uses in performing its tasks. Finally, the Defense Contract 

Audit Agency audits the contractor’s costs and determines 

which elements are allowable under the contract and the 

Federal Acquisition Regulations.

The Legal Status of Military Personnel, 

Government Civilians, and Contractors

As discussed above, civilians and contractors have a long 

history of working alongside the military in times of conflict. Necessity, quality, and cost have always been reasons 

to use civilians and contractors, but concerns from the 

Congress about the practice date back just as far.24 One 

reason for the concern is the uncertain legal status of 

civilians and contractors performing functions closely 

linked with military operations. Military personnel, government civilians, and contractor employees all have different legal statuses and different command-and-control 

mechanisms. The legal issues regarding the various classes 

of personnel may be summarized by the following set of 

questions:

B How are the actions of the personnel controlled?

B Are the personnel subject to criminal prosecution by 

U.S. authorities?

B Are the personnel legitimate military targets of enemy 

forces?

B Will the personnel receive prisoner-of-war status if 

captured?

B Are the personnel subject to criminal prosecution by 

non-U.S. authorities for acts committed in support of 

U.S. military actions (such as war crimes)?

Command and Control and Punishment 

Military personnel are under the direct command and 

control of military commanders and are subject to criminal punishment for failing to obey a lawful order.25 Government civilians may be under the control of military 

commanders permanently or temporarily during a conflict, but they would probably be subject to only administrative actions, such as suspension or termination, if they 

failed to obey an order.26 The rights and duties of contract employees are set forth in the contract, the Federal 

Acquisition Regulations, and the Defense Federal Acquisition Regulation Supplement.27 A military commander 

can influence contractor employees’ behavior through the 

contracting officer and the contractor’s desire to have a 

satisfied customer, but the commander has limited direct 

control over any one employee. Although the commander can exclude a particular contractor employee 

from an area or evacuate the employee out of the theater, 

further administrative action is at the discretion of the 

contractor.28

Military commanders have less control over civilians and 

contractors than over military personnel who commit 

crimes during a conflict. The Uniform Code of Military 

Justice (UCMJ) outlines procedures for prosecuting 

members of the military should they commit a crime 

abroad.29 Article 2 of the code provides jurisdiction over 

“persons serving with or accompanying an armed force in 

the field,” but only “in time of war,” which the courts 

have held to mean a war formally declared by the Congress. (There is some question as to whether the grant of 

courts-martial jurisdiction over civilians is constitutional 

24. Shrader, Contractors on the Battlefield; George Cahlink, “Army of 

Contractors,” Government Executive Magazine (February 2002), 

available at www.govexec.com/features/0202/0202s5.htm; and 

Steven J. Zamparelli, “Contractors on the Battlefield: What Have 

We Signed Up For?” Air Force Journal of Logistics, vol. 23, no. 3 

(Fall 1999), pp. 10-19.

25. Lisa Turner and Lynn Norton, “Civilians at the Tip of the Spear,” 

Air Force Law Review, vol. 51 (2001), p. 35.

26. Ibid. 

27. Rebecca Vernon, “Battlefield Contractors: Facing the Tough 

Issues,” Public Contract Law Journal, vol. 33, no. 2 (2004), p. 369 

The Defense Federal Acquisition Regulation Supplement is codified under chapter 2 in title 48 of the Code of Federal Regulations. It states the DoD policies that implement the Federal 

Acquisition Regulations.

28. Karen Douglas, “Contractors Accompanying the Force,” Air Force 

Law Review, vol. 55 (2004), p. 127; and Capt. Isolde K. GarciaPerez, “Contractors on the Battlefield in the 21st Century,” Army 

Logistician, vol. 31, no. 6 (November-December 1999), available 

at www.almc.army.mil/alog/issues/novDec99/ms454.htm.

29. 10 U.S.C. Ch. 47.
10 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

even during a declared war.)30 Article 2 also provides jurisdiction over “retired members of a regular component 

of the armed forces who are entitled to pay” at any time. 

Thus, retired service members serving as contractors or 

civilian employees may remain under the UCMJ, in 

which case they would be subject to court-martial for offenses committed.31 However, there is no general mechanism for the military to try DoD civilians or contractors 

who are not retired service members for crimes committed during undeclared wars.

To clarify the law as it applies to civilian employees of 

DoD and personnel working under contract to DoD, the 

Congress passed the Military Extraterritorial Jurisdiction 

Act in 2000.32 Under that law, a DoD civilian or contractor may be tried in federal court (after being brought 

back to the United States to be prosecuted) for felonies 

perpetrated outside sovereign U.S. territory while accompanying U.S. forces.33 The law applies only if the civilian 

or contractor has not been prosecuted either by the host 

nation’s legal system or under the UCMJ. The law has 

been applied in very few cases.34 One reason may be that 

it does not apply to civilians or contractors working for 

federal departments or agencies other than DoD or to 

those working for foreign governments.

Two additional statutes may apply to civilians accompanying U.S. forces. The War Crimes Act of 1996 provides 

that “whoever, whether inside or outside the United 

States, commits a [war crime] . . . shall be fined under 

this title or imprisoned for life or any term of years, or 

both, and if death results to the victim, shall also be subject to the penalty of death.”35 The law applies to members of the U.S. armed forces as well as any individual 

national of the United States, regardless of his or her employment. The second statute is the USA Patriot Act, 

which extended the territorial jurisdiction of the United 

States to include the “premises of the United States diplomatic, consular, military, or other United States government missions or entities in foreign States” with respect 

to offences committed by or against a national of the 

United States.36 That provision was cited in the indictment of a Central Intelligence Agency contractor who 

allegedly caused the death of a prisoner in Afghanistan.37

The United States has also asserted jurisdiction over 

crimes committed against U.S. government property or 

personnel regardless of where they occur throughout the 

globe.38

Lastly, DoD civilians and contractors may be subject to 

Status of Forces Agreements (SOFAs), which are agreements between the United States and host nations delineating the laws applicable to U.S. forces deployed within 

the host nation. SOFAs may include provisions that apply to contractor or civilian personnel accompanying the 

forces. Contractors are referenced in SOFAs as either having or not having “invited contractor status,” with individual SOFAs detailing the specific requirements for a 

contractor to be included in the agreement.39

Status and Liability of Military, Civilian, and 

Contractor Personnel 

Several international standards, including the Geneva 

Conventions and the Laws of the Hague, apply to actions 

taken during wars and conflicts. Collectively, those stan30. United States v. Averette, 19 U.S.C.M.A. 363 (1970).

31. 10 U.S.C. 802(a). J. Mackey Ives and Michael Davidson, “CourtMartial Jurisdiction Over Retirees Under Articles 2(4) and 2(6): 

Time to Lighten Up and Tighten Up?” Military Law Review, vol. 

175 (March 2003), pp. 1-85.

32. 18 U.S.C. 3261-3267.

33. Jennifer Elsea, Private Security Contractors in Iraq: Background, 

Legal Status, and Other Issues, CRS Report for Congress RL32419 

(Congressional Research Service, May 28, 2004).

34. Peter W. Singer, “War, Profits, and the Vacuum of Law: Privatized 

Military Firms and International Law,” Columbia Journal of Transnational Law, vol. 24, no. 2 (2004), p. 537.

35. 18 U.S.C. 2441.

36. Charles Doyle, Terrorism and Extraterritorial Jurisdiction in 

Criminal Cases: Recent Developments, CRS Report for Congress 

RL31557 (Congressional Research Service, September 2, 2002), 

available for purchase at www.pennyhill.com/index.php?last 

cat=&viewcat=14.

37. James J. McCullough and Courtney Edmonds, Contractors on the 

Battlefield Revisited: The War in Iraq and Its Aftermath, Briefing 

Paper No. 04-06 (Washington, D.C.: West Group, 2004).

38. Charles Doyle, Extraterritorial Application of American Criminal 

Law, CRS Report for Congress 94-166 (Congressional Research 

Service, September 2, 2002), available for purchase at www.pennyhill.com/index.php?lastcat= &viewcat=14.

39. James J. McCullough and Abram J. Pafford, Contractors on the 

Battlefield: Emerging Issues for Contractor Support in Combat and 

Contingency Operations, Briefing Paper No. 02-7 (Washington, 

D.C.: West Group, June 2002), p. 5.
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 11

dards are sometimes referred to as the laws of armed conflict (LOAC).40 The details of those provisions are complex and often in dispute, and they do not have equal 

authority and effect. This discussion does not attempt to 

comprehensively address the subject, but it does point 

out some distinctions in the treatment of military personnel, civilians, and contractors.41 Under the LOAC, prisoners of war, lawful combatants, noncombatants, and illegal combatants all have different statuses.42

Prisoners of War. Prisoner-of-war status applies to military personnel who fall under the control of enemy 

forces.43 Government civilians and contractors who 

accompany the military and have identification cards, 

which would include most or all of the civilians and 

many of the contractors currently in Iraq, also can qualify 

as prisoners of war.44 Prisoner-of-war status affords protections such as humane treatment, the right to communications, and return at the end of hostilities.45 Some 

detainee protections apply even to illegal combatants, as 

discussed below.

Lawful Combatants. Military personnel, except for medical personnel and chaplains, usually qualify as lawful 

combatants under the Geneva Conventions, meaning 

that they are legitimate military targets of enemy forces.46

They also obtain some immunity from prosecution for 

hostile actions taken during combat.47 Lawful combatants are identified primarily by four criteria: clearly wearing particular types of uniforms or other distinguishing 

markings, carrying a weapon openly, operating under a 

clear command structure, and obeying the LOAC.

Noncombatants. The primary protections for civilians 

and contractors under international law come from the 

LOAC. Government civilians and contractors deployed 

with a force would generally qualify as noncombatants if 

they took no active part in hostilities.48 As such, they 

would not be legitimate military targets of enemy forces, 

although they might be injured or killed during a military 

action against a legitimate target.

The legal status of government civilians and contractors 

performing functions closely linked to military operations—such as intelligence, weapon system maintenance, 

and resupply of forward-based forces—is less certain and 

is discussed next.49 Those government civilians and contractors could be deemed to have taken an active part in 

hostilities. But because they do not meet the definition of 

combatants, they could be classified as illegal combatants 

and could be criminally prosecuted for actions taken during a conflict.50

Illegal Combatants and Uncertain Status. Some people do 

not meet the criteria for either combatant or noncombatant status. Individuals who take an active part in hostilities but do not meet the criteria for lawful combatants—

as evidenced by failure to wear appropriate uniforms or 

by concealing their weapons—may be treated as illegal 

combatants and lose their immunity from prosecution for 

40. Jennifer Elsea, Treatment of “Battlefield Detainees” in the War on 

Terrorism, CRS Report for Congress RL31367 (Congressional 

Research Service, January 13, 2005), p. 10; Vernon, “Battlefield 

Contractors: Facing the Tough Issues”; and Turner and Norton, 

“Civilians at the Tip of the Spear,” p. 23.

41. For more information, see Turner and Norton, “Civilians at the 

Tip of the Spear,” pp. 1-110; Michael Davidson, “An Introduction 

to the Legal Issues Associated with Civilian Contractors on the 

Battlefield,” Public Contract Law Journal, vol. 29, no. 2 (2000), 

pp. 233-263; Clifford Rosky, “The Privatization of Punishment, 

Policing, and Military Force in Liberal States,” Connecticut Law 

Review, vol. 36, no. 3 (2004), pp. 879-1032; American Bar Association, Contractors on the Battlefield: Exploration of Unique Liability 

and Human Relations Issues (2004); Army Field Support Command, “Contractor on the Battlefield Resource Library,” available 

at www.afsc.army.mil/gc/newcob.htm; Elsea, Treatment of “Battlefield Detainees” in the War on Terrorism; and Adebayo Adedeji and 

Mark Rosen, The Feasibility of Outsourcing on Aircraft Carriers

(Alexandria, Va.: CNA Corporation, March 2000).

42. Elsea, Treatment of “Battlefield Detainees” in the War on Terrorism, 

p. 7; Davidson, “An Introduction to the Legal Issues Associated 

with Civilian Contractors on the Battlefield”; Vernon, “Battlefield 

Contractors: Facing the Tough Issues”; and Turner and Norton, 

“Civilians at the Tip of the Spear,” p. 24.

43. Elsea, Treatment of “Battlefield Detainees” in the War on Terrorism, 

p. 5; Turner and Norton, “Civilians at the Tip of the Spear,” p. 25.

44. Turner and Norton, “Civilians at the Tip of the Spear,” p. 35. 

45. Ibid., p. 66; Vernon, “Battlefield Contractors: Facing the Tough 

Issues.” 

46. Medical personnel and chaplains have separate protections. See 

the Geneva Convention Relative to the Treatment of Prisoners of 

War, August 12, 1949, 6 U.S.T. 3317, Article 33.

47. Elsea, Treatment of “Battlefield Detainees” in the War on Terrorism, 

p. 6.

48. Michael Guillory, “Civilianizing the Force,” Air Force Law Review, 

vol. 51 (2001), p. 115.

49. Ibid., pp. 134-136.

50. Ibid., p. 134.
12 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

hostile acts performed during a conflict.51 Many contractors deploy as systems technicians, helping to maintain, 

repair, and operate weapon systems. Others operate unmanned aerial vehicles that can provide reconnaissance or 

even fire weapons. Still others analyze intelligence data, 

which they may transmit in the form of target coordinates to unmanned aerial vehicles or other (manned or 

unmanned) platforms that fire weapons. All of those 

functions may be interpreted as “taking active part in the 

hostilities” and, therefore, may cause contractors to forfeit 

their noncombatant status and move into the illegalcombatant category.52 Illegal combatants are still entitled 

to humane treatment, but they may be subject to moreintensive interrogation and may not be entitled to release 

after hostilities have ceased.53

The legal status of civilians and contractors becomes even 

less certain when they are armed. The in-theater military 

commander may issue government firearms to deployed 

civilians and authorize them to use the firearms for their 

own protection. However, the armed civilians are authorized to use their weapons only within the geographic 

area specified by the military commander granting that 

authority.54 DoD contractor employees may carry 

government-issued firearms and ammunition with the 

consent of their employer and if they are eligible to carry 

a firearm under U.S. law (meaning that they have not 

been convicted of a felony).55 The armed employees 

must adhere to all military guidance regarding possession, 

use, safety, and accountability of weapons and ammunition. A DoD civilian or contractor who used weapons in 

any manner other than self-defense while participating in 

hostilities would lose his or her noncombatant status; 

even in a case of self-defense, that status would become 

questionable.

International law has begun to recognize that contractors 

serve neither as combatants nor as noncombatants but 

rather as part of a special niche deemed “civilians authorized to accompany the force.” That means that they are 

entitled to some, but not all, protections afforded to noncombatants in addition to some protections afforded to 

combatants.56 For example, they still qualify for humane 

treatment yet may be subject to criminal prosecution 

under local laws for actions taken during the conflict.57

However, those issues are not yet fully settled.58 Most of 

the legal debate about civilians and contractors accompanying the force depends on how the United States, the international community, and the enemy choose to interpret the laws of armed conflict.

Summary of Status. Military personnel qualify for full 

prisoner-of-war protections and have immunity from 

prosecution for hostile acts performed in support of U.S. 

military operations during a conflict. However, they are 

legitimate targets of enemy forces. Government civilians 

and contractors will usually qualify as prisoners of war 

and will not be legitimate military targets of enemy forces 

unless they take a direct and active part in the hostilities. 

The exact determination of what constitutes a direct and 

active part in hostilities has not yet been fully resolved, 

however.

Those legal distinctions for status as a noncombatant or a 

prisoner of war are important for personnel working for 

the U.S. military only if the enemy follows the LOAC. 

The distinctions are not relevant for a conflict like the 

current operation in Iraq because the insurgency forces 

do not follow those laws. Insurgency forces have detonated explosives in public areas that are as likely to kill 

noncombatants (including Iraqi civilians) as combatants; 

they have used prisoners as hostages and tortured and

51. Ibid., p. 111; Ex parte Quirin, 317 U.S. 1, 31 (1942); and Adedeji 

and Rosen, The Feasibility of Outsourcing on Aircraft Carriers.

52. Guillory, “Civilianizing the Force,” pp. 134-136; and Zamparelli, 

“Contractors on the Battlefield: What Have We Signed Up For?” 

53. Elsea, Treatment of “Battlefield Detainees” in the War on Terrorism, 

pp. 6-7.

54. See the Web site on civilian employee guidance issued by the U.S. 

Army Forces Central Command, available at www.arcent.army. 

mil/CivEmpGuide/index.asp.

55. Department of Defense, Defense Federal Acquisition Regulation, 

48 C.F.R. 252 (2005); and Joe A. Fortner, “Managing, Deploying, 

Sustaining, and Protecting Contractors on the Battlefield,” Army 

Logistician, vol. 32, no. 5 (September/October 2000), pp. 3-7, 

available at www.almc.army.mil/alog/issues/SepOct00/

ms571.htm.

56. McCullough and Edmonds, Contractors on the Battlefield Revisited: 

The War in Iraq and Its Aftermath; and Fortner, “Managing, 

Deploying, Sustaining, and Protecting Contractors on the Battlefield.” 

57. Davidson, “An Introduction to the Legal Issues Associated with 

Civilian Contractors on the Battlefield,” p. 245. 

58. Hamdi v. Rumsfeld, 124 S. Ct. 2633 (U.S. 2004); Guillory, “Civilianizing the Force,” p. 111; Vernon, “Battlefield Contractors: Facing the Tough Issues,” p. 401; and Zamparelli, “Contractors on 

the Battlefield: What Have We Signed Up For?”
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 13

Table 1-3.

Comparison of Fatality Rates Among Selected Workers in Iraq Table 1-3. Comparison of Fatality Rates Among Selected Workers in Iraq

Source: Congressional Budget Office based on data from Kellogg, Brown & Root, the Bureau of Labor Statistics, the Congressional Research 

Service, and the Department of Defense.

Note: The information in this table reflects all fatalities—namely, individuals killed in action as well as those who died from accidents, 

disease, and other causes. 

even killed them.59 Noncombatants may even be at 

greater risk because they are more vulnerable. Military 

personnel, contractors, and civilians all require protection 

in hostile areas, but military personnel may require less 

outside security than the other groups. Arming civilians 

or contractors may lessen the need for security by other 

military units, but it may also increase the uncertainty 

over the legal status of the civilians or contractors.

Contractors’ Fatality Rates

Although contractor personnel have traditionally worked 

in rear areas, away from the front line of battles, recent 

experience during Operation Iraqi Freedom demonstrates 

that the distinction between front lines and rear areas is 

often blurred, leaving contractor personnel vulnerable to 

considerable physical danger. For example, Kellogg, 

Brown & Root has operated as many as 80 truck convoys 

per day in Iraq, transporting supplies and equipment 

through hostile areas. In addition, KBR personnel other 

than truck drivers (construction crews, for instance) are at 

risk while being driven to and from their worksites.

This section compares KBR’s fatality rates in Iraq with 

those of the U.S. Army and other benchmarks (see 

Table 1-3). The comparison includes all fatalities: individuals killed in action (whether they were primary or 

collateral targets), as well as those who died from accidents (mostly motor vehicle accidents), disease, and other 

causes.

KBR reported 27 fatalities and 179 nonfatal injuries 

among its employees (both U.S. and foreign nationals) 

and subcontractors working on LOGCAP in Iraq between March 2003 and November 2004.60 A different 

source lists a total of 273 fatalities among all contractors 

Starting Month Ending Month

Kellogg, Brown & Root Employees March 2003 November 2004 21 38,305 27 40.3

U.S. Army Personnel

Combat arms March 2003 May 2005 27 34,710 693 887.3

Combat support March 2003 May 2005 27 23,450 124 235.1

Combat service support March 2003 May 2005 27 45,800 292 283.4

Department of Defense Civilians March 2003 December 2004 22 2,930 3 55.0

Transportation sector January 2003 December 2003 12 805 17.5

Agricultural sector January 2003 December 2003 12 707 31.2

Data Availability

Annual 

Duration Average Number of per 100,000

Fatality Rate

(Months) Population Fatalities Employees

Memorandum:

Fatality Rates for Employment 

in the United States

4.6 million

2.3 million

59. Major combat operations against the (former) regular Iraqi army 

took place during the period from March 19, 2003, through April 

30, 2003. The continuing battle between the U.S. military and 

irregular insurgency forces in Iraq began on May 1, 2003. Some of 

the ensuing legal issues are discussed in Phillip Carter, “What the 

Law Says About the Recent Killings in Iraq,” CNN.com, April 5, 

2004, available at www.cnn.com/2004/LAW/04/05/carter.iraq/

index.html.

60. Data provided to CBO by Kellogg, Brown & Root, November 30, 

2004.
14 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

in Iraq between the start of hostilities in March 2003 and 

March 24, 2005.61

KBR’s 27 fatalities were drawn from a workforce of about 

38,000 employees (including foreign nationals and subcontractor personnel) working on LOGCAP in Iraq over 

a 21-month period.62 The implied fatality rate is 40.3 per 

100,000 people per year (see Table 1-3). As a point of 

comparison, CBO estimated the fatality rates for Army 

troops (combat arms, combat support, and combat service support) stationed in Iraq in support of Operation 

Iraqi Freedom.63 The Army’s rate of 283.4 for CSS 

Box 1-3.

The Total Army Analysis Process

Total Army Analysis (TAA) is the process the Army 

uses to determine the numbers and types of units, 

and associated numbers of soldiers in the various 

occupational specialties, with which it will meet national objectives within personnel and budgetary 

constraints. The TAA process takes account of various guidance documents from the President, the 

Congress, the Secretary of Defense, the Joint Staff, 

and the Army Staff to develop a blueprint for Army 

forces that will be funded and made available for 

operations.1

The force structure derived from the TAA process 

consists of the Operating Force (Table of Organization and Equipment units that are available to deploy during contingencies) and what the Army calls 

the Generating Force (nondeployable units that acquire, train, maintain, and sustain the Operating 

Force).

The forces are also divided into nine components, 

beginning with the active Army (component 1), the 

Army National Guard (component 2), and the Army 

Reserve (component 3). The units in component 4 

(sometimes abbreviated as “compo 4”) exist only on 

paper, and they are deliberately left unfunded so that 

available resources can be applied instead to forcestructure units having higher priority, or to other 

Army programs. Component 5 is merely a memo entry to identify the gap between new requirements 

and the currently programmed force; that gap is not 

additive to the requirements in the other components. Component 6 contains units that maintain 

the Army’s prepositioned sets of equipment. Components 7 and 8 represent direct and indirect hostnation support, respectively. Component 9 represents the Logistics Civil Augmentation Program.

TAA is a biennial process that begins each evennumbered year and is completed the following year. 

TAA involves Army-wide participation and comprises two phases.

Phase I: Requirements Determination. In this 

phase, the Army determines the size and types of 

combat forces (for example, divisions and brigades), 

deployable support forces needed to accompany the 

combat forces, and the Generating Force it needs to 

adhere to guidance documents. Several high-level 

guidance documents (such as the National Security 

Strategy, the Joint Strategic Capabilities Plan, 

and the Contingency Planning Guidance) and 

1. The TAA process is described in U.S. Army War College, 

How the Army Runs: A Senior Leader Reference Handbook, 

2003-2004 (Carlisle, Pa.: U.S. Army War College, 2003).

61. Tony Capaccio, “Titan Has Most Deaths Among Iraq Contractors,” Bloomberg.com, March 24, 2005.

62. The 38,000 figure explicitly excludes about 6,000 KBR employees 

based elsewhere. (More than 4,000 of those employees are based 

in Afghanistan and Uzbekistan, where they support Operation 

Enduring Freedom.)

63. The estimation of Army troop levels in combat arms, combat support, and combat service support was described in footnote 18. 

CBO distributed all Army fatalities in Iraq into those three 

personnel categories using a detailed list of fatalities, including 

occupational code, available at a DoD Web site (http://web1. 

whs.osd.mil/mmid/casualty/castop.htm) and using an occupational directory found in Levy and others, Army PERSTEMPO in 

the Post Cold War Era, Appendix C. 
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 15

personnel is seven times KBR’s rate, implying that contractor personnel have not been exposed to nearly as 

much risk of death as the most similar Army soldiers. The 

CSS rate is higher than the rate for combat-support personnel, 235.1 fatalities per 100,000 people (that difference is marginally statistically significant), but both of 

those rates are significantly lower than the rate for soldiers 

in the combat arms, 887.3 fatalities per 100,000.

To obtain a different comparison, CBO examined KBR’s 

fatality rate in Iraq relative to the fatality rates for employment in the United States. The overall rate of fatal 

occupational injuries in 2003 was 4.0 per 100,000 workers. But within certain sectors, the rate was much higher. 

Among the 15 major industrial sectors tracked by the Bureau of Labor Statistics, transportation and warehousing 

is probably the most comparable with LOGCAP in terms 

of job content. That sector had the third-highest fatality 

rate among the 15 sectors (the highest rate was found in 

agriculture, forestry, fishing, and hunting; the second 

highest in mining). The fatality rate in transportation and 

warehousing, at 17.5 per 100,000 workers per year, was 

less than half of KBR’s rate of 40.3, and the difference between those two rates is statistically significant. The rate 

in agriculture (although not directly comparable in terms 

of job content to KBR’s tasks) was lower at 31.2 per

Box 1-3.

Continued

Army inputs (The Army Plan) together address national objectives, threats, and resource assumptions 

and assign prioritized missions to the Army. The 

TAA process determines the size of the combat forces 

required to meet those threats and missions, then 

uses quantitative analysis and computer modeling to 

develop support forces appropriate to the combat 

forces and finally the Generating Force. The result is 

a complete list of the units the Army believes are required to fulfill its assigned missions.

Phase II: Resources Determination. In this phase, 

the Army reconciles the “requirements” generated in 

the previous phase with the reality of personnel and 

budgetary constraints to determine whether the proposed force can be manned, trained, equipped, and 

sustained. The requirements are also compared with 

the existing force structure to identify shortfalls, creating a plan to fulfill the unmet requirements while 

attempting to reduce risk. Decisions are made about 

the trade-off between personnel and budgetary constraints and risks stemming from the fact that not all 

of the requirements may be met. The final list of 

units is allocated between the funded components of 

the active Army, Army National Guard, Army Reserve, and the unfunded component 4.

The list of funded units is an input in developing the 

Army’s Program Objective Memorandum (POM), 

which states the Army’s proposed funding program 

extending out several years beyond the budget year. 

For example, during fiscal year 2002, the Army 

developed POM-04/09 (the POM that began with 

fiscal year 2004 and spanned subsequent future years 

through 2009). The force-structure goals stated in 

TAA-04/09—goals of 507,000 personnel in the active Army plus a total of 608,000 in the Army National Guard and Army Reserve—were intended to 

determine the funded troop levels in the 2009 column of POM-04/09. In practice, though, POM-04/

09 reflected the Army’s previously approved endstrength plan of 482,000 personnel in the active 

Army plus a total of 555,000 in the Guard and 

Reserve. (Those figures do not reflect temporary increases in Army end strength for the war on terrorism, which are excluded from the Army’s POM but 

funded instead via supplemental appropriations.) 

The goals stated in TAA-04/09 were higher than the 

approved end-strength plan, revealing that the TAA 

process does not completely embody the personnel 

and budgetary realities that constrain the Army’s 

POM. 
16 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

100,000 workers per year, although the difference between that rate and KBR’s rate is not statistically significant.64

Finally, CBO computed the fatality rate for DoD civilians in Operation Iraqi Freedom. A total of three DoD 

civilians were killed in that operation between March 

2003 and December 2004, during which time the average number of civilians in-theater was 2,930. The implied fatality rate is 55.0 per 100,000 people per year. 

Although that rate exceeds KBR’s rate, the civilian population at risk is small, so the difference between the two 

rates is not statistically significant.65

Contractors’ Role in the Army’s 

Force Structure

The question addressed in this section is whether contractor personnel (particularly those who support the 

LOGCAP contract and weapon systems) substitute for 

uniformed soldiers in the Army’s overall force structure or 

whether they augment an organic capability that remains 

in the uniformed Army. The data that CBO analyzed 

show that contractors have augmented the Army’s support capability rather than served as a substitute.

The Army uses a process called Total Army Analysis 

(TAA) to determine—on the basis of its roles, missions, 

and the threats it faces—the numbers and types of units 

it requires and the associated numbers and occupational 

specialties of soldiers (see Box 1-3 on pages 14 and 15). 

TAA operates within personnel and budgetary constraints, and some units—although “required”—must be 

left unfunded in order to fund higher-priority units 

within the force structure. The unfunded units, known as 

component 4 units, exist only on paper.

The force structure derived from the TAA process contains both deployable forces (that is, Table of Organization and Equipment, or TOE, units) and nondeployable 

forces. The Army divides its deployable forces into three 

large categories: combat, combat support (CS), and combat service support (see Box 1-1 on pages 6 and 7). The 

LOGCAP contractor can fill the gap if organic CSS units 

do not exist in sufficient numbers to support deployed 

combat units. Weapon-system support contractors—who 

perform maintenance on weapon systems and provide 

parts, training, and software support—can substitute for 

certain units classified as combat support and other units 

classified as combat service support.66 Both the CS and 

CSS units are drawn from all three components of the total Army: the active Army, the Army National Guard, and 

the Army Reserve.

The Army’s nondeployable forces are known as Table of 

Distribution and Allowances (TDA) units; collectively, 

they are known as the Generating Force. The objective of 

the Generating Force is to “create, provide, manage, and 

sustain the [Army]. . . . The Generating Force consists of 

the Army’s institutional base, industrial base and infrastructure spread across HQDA [Headquarters, Department of the Army], the MACOMs [major commands], 

field operating agencies, and staff support agencies.”67

Contractors are used extensively to support the Generating Force, but those types of contractors operate in the 

United States rather than directly supporting overseas 

combat operations, and thus they are not the subject of 

this study.

Some individual soldiers are classified as transients, trainees, holdees, or students (TTHS). Although those soldiers count against the Army’s total end strength, they are 

not assigned to either TOE or TDA units. The active 

Army has about 55,000 soldiers classified as TTHS, 

more than 80 percent of whom are either trainees or 

students.68 Those soldiers may be in basic or advanced 

training, attending various schools, or in transit between 

assignments and would not be adequately trained or otherwise available to deploy to a wartime theater. Finally, 

even some fraction of the soldiers assigned to deployable

64. Fatality rates by industrial sector come from Department of Labor, 

Bureau of Labor Statistics, National Census of Fatal Occupational 

Injuries in 2003 (September 22, 2004).

65. The number of civilians is from monthly data collected by the 

U.S. Central Command. The number of fatalities comes from a 

Web site that DoD updates weekly (www.defenselink.mil/news/

casualty.pdf); the version of that site that CBO used was “Operation Iraqi Freedom: U.S. Casualty Status as of April 27, 2005.”

66. For example, soldiers in career management field (CMF) 31, signal operations, operate and maintain communications equipment 

and are classified as combat support. Soldiers in CMF 35, electronic maintenance and calibration, are classified as combat service support. Both groups are candidates for substitution by 

civilian contractors.

67. Headquarters, Department of the Army, 2005 Army Modernization Plan, Annex B, p. B-20.

68. Data provided by the Defense Manpower Data Center as of 

August 2004.
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 17

Table 1-4.

Distribution of the Army’s Authorized End Strength, by Component and Function, 

Fiscal Year 2005

Table 1-4. Distribution of the Army’s Authorized End Strength, by Component and Function, Fiscal Year 2005

Source: Congressional Budget Office based on data from the Department of Defense’s Forces, Readiness, and Manpower Information System (FORMIS).

Notes: Authorized end strength is the number of soldiers the Congress has authorized and funded for the end of the fiscal year.

Numbers may not add up to totals because of rounding.

(TOE) units may be unavailable for any particular 

deployment because of illness, pregnancy, or other reasons.

Concentration and Deployment of the 

Army’s Logistics Personnel 

Overall, 24 percent of the Army’s personnel are considered nondeployable (see Table 1-4). Among the three 

components of the Army, the percentages vary. For example, 33 percent of active Army personnel and 32 percent 

of Army Reserve personnel are considered nondeployable. 

The Army National Guard—although often associated 

with homeland security, local disaster relief, and other 

missions within the individual states—has only 7 percent 

of its personnel classified as nondeployable.

The standard for “deployable” is not as stringent in the 

National Guard as it is in the other Army components, 

however. Although many National Guard personnel have 

been deployed to Operations Enduring Freedom and 

Iraqi Freedom, a “deployment” for National Guard personnel involves assignment to any unit or detachment 

that operates in any location other than its home station. 

Participation in local disaster relief, therefore, would 

qualify as a National Guard deployment. Any Guard 

member who is qualified to participate in those activities 

would be classified as deployable.

The percentages shown in Table 1-4 are consistent with 

the composition of Army personnel who have actually 

deployed to the Afghan or Iraqi theaters between September 11, 2001, and February 28, 2005.69 Some 181,000 

soldiers from the Army National Guard and 101,000 

from the Army Reserve have been mobilized during that 

period. Of those cumulative totals, 126,000 from the 

Guard and 76,000 from the Reserve have been deployed 

to OEF or OIF. (The remainder have been called up either to serve inside the United States or to deploy to other 

locations throughout the world). Considering that 

151 79 92 160 482

31 16 19 33 100

169 67 89 24 350

48 19 26 7 100

14 40 84 67 205

7 20 41 32 100

Thousands of soldiers 334 187 265 251 1,037

Percent 32 18 26 24 100

Total

Deployable Personnel 

Personnel

Combat Combat Service Nondeployable

Support Total Support

Thousands of soldiers

Percent

Thousands of soldiers

Percent

Thousands of soldiers

Percent

Combat 

Guard

Reserve

Active

69. Although planning began within days of the September 11 terrorist attacks, the first U.S. military action in Afghanistan after September 11 was a series of attacks on Al Qaeda training camps and 

Taliban military installations that began on October 7, 2001. See 

Jim Garamone, “America Launches Strikes Against Al Qaeda, Taliban,” American Forces Press Service, October 7, 2001, available 

at www.defenselink.mil/news/Oct2001.
18 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

313,000 active Army soldiers have been deployed to 

those operations, the Guard and Reserve combined represent 39 percent of the total number of soldiers (515,000) 

deployed since September 11, 2001. Deployments toward the end of that period are even more heavily 

weighted toward Guard and Reserve soldiers. Taking a 

“snapshot” as of February 28, 2005, some 102,000 Army 

National Guard and Reserve soldiers were deployed to 

OEF or OIF, representing 46 percent of the Army total of 

222,000.70

The distribution of mobilized reservists varies by military 

occupation as well as by component. Between September 

11, 2001, and November 2004, call-up rates reached 45 

percent in some officer career fields, including military 

police, intelligence, and fixed-wing aviation. Call-up rates 

exceeded 55 percent in some enlisted specialties, such as 

installations security, law enforcement, and motor vehicle 

operation. Yet reservists in other career fields (for example, medical and legal) experienced relatively low rates of 

mobilization.71

The Army’s logistics (CSS) units reside disproportionately in the frequently deploying Guard and Reserve 

components (see Table 1-4). Among deployable Guard 

personnel, 27 percent [89,000 / (350,000 - 24,000)] are 

classified as combat service support. The corresponding 

figures are 60 percent of Reserve personnel but only 28 

percent of active-duty Army soldiers. To put matters differently, the three components have roughly equal numbers of CSS personnel (ranging between 84,000 and 

92,000 soldiers). The active Army accounts for 41 percent of the total number of deployable personnel but only 

35 percent of the deployable personnel within CSS.

The Army’s Policy on Organic and 

Contractor Logistics

Some observers contend that the Army has attempted to 

reduce its organic CSS footprint—using contractors to 

provide those services—and apply the freed-up military 

resources to other uses.72Army doctrine itself is ambiguous on whether contractor support should augment the 

Army’s organic logistics capability or substitute for that 

capability and enable a reduction in the Army’s CSS footprint. CBO analyzed Army data on the number of soldiers assigned to military occupations that correspond to 

CSS. Those data indicate that contractor support has 

augmented the Army’s logistics capability rather than 

served as a substitute.

The Army’s regulation on contractors accompanying 

deployed forces states that contracted support should 

augment, but not replace, military force structure. (That 

position is consistent with the nomenclature: The “A” in 

LOGCAP stands for “augmentation,” suggesting that at 

least when the program was first formulated, LOGCAP 

was designed to augment, not replace, organic Army assets.) In particular, the regulation states that contractors 

will be used on an “as-needed” basis only when U.S. military, DoD civilian, host-nation, or multinational support 

is not readily available.73

Other Army policy documents, however, state that contracted support should substitute for Army units, and 

they specifically direct planners to incorporate such 

support when determining requirements for the Army’s 

force structure. For example, the Army regulation on 

LOGCAP directs the component commanders and the 

Deputy Chief of Staff for Operations and Plans (DCSOPS, also known as the Army’s code G-3) to determine 

adjustments to the Army’s force structure on the basis of 

awarded contingency contracts and contingency clauses 

70. Data provided by the Department of Defense, Office of the Assistant Secretary for Reserve Affairs, as of February 28, 2005.

71. Congressional Budget Office, The Effects of Reserve Call-Ups on 

Civilian Employers (May 2005), p. 9.

72. Greenfield and Camm, in Risk Management and Performance in 

the Balkans Support Contract, state “Although officially the BSC 

[Balkans Support Contract] augments Army military support 

capabilities in the Balkans and nearby countries—e.g., Bosnia, 

Hungary, Kosovo—it has helped the Army reduce its in-house 

role in CSS provision in the region by partially devolving responsibilities for service coordination and delivery and freeing up 

resources, especially Army manpower, for other core functions” 

(p. 1).

73. Army Regulation 715-9, Contractors Accompanying the Force

(October 1999).
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 19

Figure 1-2.

Number of Enlisted Personnel in the Active Army, by Occupational Group, 

1985 to 2002

(Thousands)

Figure 1-2. Number of Enlisted Personnel in the Active Army, by Occupational Group, 1985 to 2002

Source: Congressional Budget Office.

Note: The nonoccupational grouping includes patients, students, personnel with unassigned duties, and others not classified elsewhere.

included in peacetime contracts.74 The regulation goes 

on to require that contracted support be expressed in 

terms of equivalent Army units that would be necessary if 

the contingency contracts were not executed and to include those offsets in the TAA process for determining 

Army force structure. The Army’s regulation on hostnation support states that it, too, should be treated as a 

substitute for Army units—generating offsets in the TAA 

process—albeit only when that support is “reasonably 

assured.”75

Empirical Evidence on the Share 

of Logistics Personnel

Between 1985 and 2002 (a period including the drawdown of the early 1990s), the number of enlisted personnel assigned to noncombat occupations in the active 

Army appears to have declined in roughly the same proportion as the number assigned to combat occupations 

(see Figure 1-2).

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

0

100

200

300

400

500

600

700

Infantry and Gun Crews

Medical

Communications

Administration

Electrical

Supply

Nonoccupational

Electronics

Craftsman

Other Technical

74. Army Regulation 700-137, Logistics Civil Augmentation Program 

(LOGCAP) (December 1985). The combatant commanders are 

the four-star military officers who command one of the unified 

combatant commands, such as the U.S. Central Command. The 

combatant commanders were known as commanders in chief 

(CINCs) of their respective commands until an October 2002 

memorandum from Secretary of Defense Donald Rumsfeld 

explained that the term CINC was to be reserved exclusively for 

the President. The component commands, such as United States 

Army Europe, are the services’ regional headquarters and are subordinate to the combatant commands. The combatant commanders relay their requests for forces and support through the 

component commanders to the services’ U.S. headquarters.

75. Army Regulation 570-9, Host Nation Support (October 1990). 

The regulation goes on to state that “WHNS [wartime hostnation support] is considered to be reasonably assured upon the 

conclusion of a formal WHNS agreement between the governments of the United States and the host nation” (Section 5d).
20 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Since 1996, the share of enlisted personnel assigned to 

support billets in the active Army has remained essentially constant (see the top panel of Figure 1-3). The four 

metrics in that figure differ on the basis of whether CS 

billets are added to CSS billets (as mentioned earlier, contractors can substitute for soldiers in some CS and CSS 

functions) and whether the denominator is restricted to 

billets in deployable (TOE) units or also includes TDA 

units. Figure 1-3 is less definitive than Figure 1-2 because 

the data begin in 1996, after the Army’s 1990s drawdown 

was mostly complete. (CBO could not obtain consistent 

data to extend Figure 1-3 earlier.) Furthermore, the isolated plot points for TAA 2009 indicate that the Army intends to retain its own organic support capability in the 

immediate future.76

In relation to the total Army, the percentages of soldiers 

assigned to CS and CSS billets are higher than they were 

for the active Army alone, because of the concentration of 

CSS billets in the Guard and Reserve (see the bottom 

panel of Figure 1-3). However, the share of soldiers in CS 

and CSS billets has remained essentially unchanged since 

1996, and it is projected to stay roughly constant through 

TAA 2009. 

76. The TAA 2009 plot points are based on CBO’s analysis of data 

extracted from the TAA-09 Army Structure Message, May 30, 

2002.
CHAPTER ONE BACKGROUND INFORMATION ON CIVILIAN AND CONTRACTOR SUPPORT OF THE MILITARY 21

Figure 1-3.

Percentage of Assigned Personnel in the Army

(Percent)

Figure 1-3. Percentage of Assigned Personnel in the Army

Source: Congressional Budget Office based on data from the Department of Defense’s Forces, Readiness, and Manpower Information 

System.

Notes: CS = combat support; CSS = combat service support.

See Box 1-1 for an explanation of Table of Organization and Equipment (TOE) units, which are deployable, and Table of Distribution 

and Allowances units, which are nondeployable. See Box 1-3 for an explanation of the Total Army Analysis (TAA) process.

J

J

J

J

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 TAA 2009

0

10

20

30

40

50

60

CSS/TOE

(CS+CSS)/Total

(CS+CSS)/TOE

CSS/Total

Active Army

J

J

J

J

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 TAA 2009

0

10

20

30

40

50

60

CSS/TOE

(CS+CSS)/Total

(CS+CSS)/TOE

CSS/Total

Total Army

2

Factors That Determine the 

Mix of Military Personnel, 

Federal Civilians, and Contractors Chapter 2: Appendix

There is probably no single “best” mix of military 

personnel, federal civilians, and contractors to support 

deployed military forces. Current practice has evolved 

over many years, and it is rooted in federal statute, the 

Department of Defense’s and the Army’s regulations, and 

institutional culture. For example, both title 5 and title 

10 of the U.S. Code (laws that regulate personnel policies 

for civilians and the military, respectively) influence who 

supports military operations overseas. DoD and the military services issue policies that implement title 5 and title 

10 and help determine the force mix overseas.1

In addition, each crisis or conflict is likely to vary from 

previous ones, so a preferred distribution of personnel for 

one type of conflict may prove impossible to implement 

in another. During Operations Desert Shield and Desert 

Storm, for example, 63 percent of nonmilitary support 

was provided by foreign contractors, predominantly 

Saudi Arabian firms.2 During Operation Iraqi Freedom, 

however, the U.S. military has been relying on a combination of organic support, deployed federal civilians, and 

U.S. support contractors.

Advantages of Contractors

Contractors offer several advantages over federal civilians 

and military personnel. To begin with, contractors often 

have an extensive capacity to provide deployed military 

forces with the same skills, capabilities, and expertise that 

they are already providing to the military in the United 

States or to state and local governments and commercial 

clients—skills that the military may lack in its own deployable forces. For example, DoD deployed Predator 

unmanned aerial vehicles to Albania and Hungary to support Operations Joint Promise (1995) and Joint Endeavor (1996) in the former Yugoslavia. Because the 

Predator system was still in development, only contractor 

personnel had the necessary skills to operate and maintain the system.3

Using contractors also provides DoD with flexibility. For 

example, the military’s “up-or-out” promotion system 

causes many highly trained personnel to leave active duty 

every year.4

 When DoD is able to employ those personnel as contractors, it continues to recoup some of its 

training investment. Along similar lines, retaining an 

occupation in the military generally requires creating or 

maintaining an entire career track, including both student and instructor training positions as well as a chain of 

CHAPTER

1. Three examples are Army Regulation 700-137, Logistics Civil 

Augmentation Program (LOGCAP) (December 1985); Army Regulation 715-9, Contractors Accompanying the Force (October 1999); 

and Army Field Manual 3-100.21, Contractors on the Battlefield

(January 2003).

2. George B. Dibble, Charles L. Horne III, and William F. Lindsay, 

Army Contractors and Civilian Maintenance, Supply, and Transportation Support During Operations Desert Shield and Desert Storm, 

vol. I, Study Report AR 113-01RD1 (Bethesda, Md.: Logistics 

Management Institute, June 1993), Chapter 2, p. 2-4.

3. The Predator (also known as RQ-1A) first flew in June 1994, only 

six months after the contract was awarded to General Atomics 

Aeronautical Systems. 

4. Each military service publishes a matrix that gives the “high year 

of tenure” for each enlisted pay grade. Personnel who are not promoted to the next pay grade are separated from active duty upon 

completing the high year of tenure for their pay grade, in which 

case they may be eligible for severance pay (see http://usmilitary. 

about.com/od/navypromotions/a/hyt.htm).
24 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

command. Several studies have shown that outsourcing 

military positions offers significant savings (higher than 

those from outsourcing government civilian positions).5

Some DoD officials have stated that institutional obstacles to reassigning civilian workers hinder DoD’s ability 

to use civilians in ongoing operations, again encouraging 

the use of contractors.6

 To address those and related concerns, the 2004 National Defense Authorization Act created the National Security Personnel System (NSPS). In 

February 2005, DoD and the Office of Personnel Management jointly released the proposed NSPS regulations 

for public comment.7 Those regulations would introduce 

a more flexible compensation system and allow greater 

ease in hiring and firing employees. The unions representing federal workers have objected to certain components in the regulations, however, and it is unclear what 

the eventual system will look like or whether the new system would make the widespread deployment of federal 

civilians substantially easier than it is currently.

DoD has conducted numerous public/private competitions under the guidelines established in the Office of 

Management and Budget’s Circular A-76 to determine 

whether in-house military organizations should continue 

to provide support services at military installations in the 

United States. Evidence from those competitions suggests 

that contractors perform some services or functions at a 

lower cost than military organizations do. They achieve 

the savings largely by carrying out the same tasks with 

fewer people.8 That evidence, however, pertains to peacetime functions performed in the United States and may 

not necessarily extend to combat operations overseas.

Some people have argued that potential efficiencies from 

contracting could benefit DoD in another way. Since the 

end of the Cold War, various DoD initiatives (for example, the Quadrennial Defense Reviews) have looked for 

ways to increase the military’s “tooth-to-tail” ratio—that 

is, to downsize force structure by shrinking noncombat 

functions. Contracting out has been viewed by some researchers as one way of focusing military forces on combat operations (the “tooth”). Other researchers have argued that many ancillary functions are not “core” and fall 

outside military expertise.9 For that reason, they contend, 

contractors could provide those functions much more efficiently than military personnel could.

Overseas Status of Forces Agreements and limits on the 

number of troops that can be deployed to a wartime 

theater also can create a need for contractor or federal 

civilian support. For example, during the planning for 

Operation Desert Storm in 1990, force structure limits 

on the U.S. Central Command compelled the Army to 

give higher priority to deploying combat units than to 

deploying logistics units. As a result, the Army had to rely 

5. See, for example, Carla E. Tighe and others, Case Studies in DoD 

Outsourcing (Alexandria, Va.: CNA Corporation, January 1997); 

Alan J. Marcus and James Jondrow, Estimates of Potential Competition Savings for Navy Commercial Activities (CNA Corporation, 

June 1998); and Peggy A. Golfin, New Markets for Recruiting 

Quality Enlisted Personnel (CNA Corporation, March 1996).

6. See the statement of David S.C. Chu, Under Secretary of Defense 

(Personnel and Readiness), Department of Defense, before the 

Subcommittee on Personnel of the Senate Committee on Armed 

Services, published as Department of Defense, Active and Reserve 

Military and Civilian Personnel Programs (April 5, 2005); and 

James Kitfield’s interview with David S.C. Chu in “Military Manpower: Adjusting to New Stresses,” National Journal, vol. 36, no. 6 

(February 7, 2004).

7. See “National Security Personnel System Proposed Rule,” Federal 

Register, vol. 70, no. 29 (February 14, 2005), pp. 7551-7603. 

8. Ross Stolzenberg and Sandra Berr, A Pilot Study of the Impact of 

OMB Circular A-76 on Motor Vehicle Maintenance Cost and Quality in the U.S. Air Force (Santa Monica, Calif.: RAND Corporation, 1985); Carla E. Tighe and others, Outsourcing and 

Competition: Lessons Learned from DoD Commercial Activities Programs (Alexandria, Va.: CNA Corporation, October 1996); A.J. 

Marcus, Analysis of the Navy’s Commercial Activities Program (CNA 

Corporation, July 1993); John B. Handy and Dennis J. O’Connor, How Winners Win: Lessons Learned from Contractor Competition in Base Operations Support (Bethesda, Md.: Logistics 

Management Institute, 1994); Christopher M. Snyder, Robert P. 

Trost, and R. Derek Trunkey, “Reducing Government Spending 

with Privatization Competitions: A Study of the Department of 

Defense Experience,” Review of Economics and Statistics, vol. 83, 

no. 1 (February 2001), pp. 108-117; and Christopher M. Snyder, 

Robert P. Trost, and R. Derek Trunkey, “Bidding Behavior in the 

Department of Defense’s Commercial Activities Competitions,” 

Journal of Policy Analysis and Management, vol. 20, no. 1 (Winter 

2001), pp. 21-42.

9. Laura H. Baldwin, Frank A. Camm, and Nancy Y. Moore, Strategic Sourcing: Measuring and Managing Performance (Santa Monica, 

Calif.: RAND Corporation, 2000); and National Defense Panel, 

Transforming Defense: National Security in the 21st Century 

(December 1997).
CHAPTER TWO FACTORS THAT DETERMINE THE MIX OF MILITARY PERSONNEL, FEDERAL CIVILIANS, AND CONTRACTORS 25

extensively on contractors (and, later, Army civilians) to 

supplement logistics forces.10

Although most of the Army’s logistics capability resides in 

Guard and Reserve units, those units may be slow to arrive in-theater. During Operation Desert Shield, for instance, support units containing 73,000 reservists did not 

all arrive in-theater until about 200 days after the operation began.11 Response times improved during Operation Iraqi Freedom: DoD reports that the average lag 

between activation and arrival in-theater was 158 days for 

Guard and Reserve battalions and about 60 days for 

smaller detachments.12 By contrast, the Logistics Civil 

Augmentation Program contract requires that performance begin as early as 15 days after the Army notifies 

the contractor to proceed with a particular task order. 

Although the LOGCAP contractor has not always met 

that goal, it has generally responded faster than Army 

Guard and Reserve units. The difference arises because 

the process of activating Guard and Reserve units, including predeployment medical and dental examinations, is 

time-consuming. In addition, Army units generally transport their own equipment to the wartime theater, often 

via strategic sealift ships, whereas the contractor may be 

able to purchase much of the required equipment (such 

as trucks) in the theater itself or in adjoining countries.

Conversely, an argument in support of using Guard and 

Reserve units (rather than contractors) despite their delayed arrival in the wartime theater could be made on the 

basis of the Abrams Doctrine. After the Vietnam War, 

Army Chief of Staff General Creighton W. Abrams advocated placing key wartime support functions in the 

Guard and Reserve components of the military. Under 

that doctrine, it is difficult for the Army to engage in 

large-scale military conflicts without mobilizing Guard 

and Reserve personnel. Because those mobilizations have 

major consequences—not only for the personnel themselves, but also for their families, civilian employers, and 

communities—major conflicts become less likely unless 

there is strong national support.13

Advantages of Uniformed 

Military Personnel

Military personnel are charged with using force to attain 

national objectives. But even in tasks that do not require 

direct combat skills, military personnel will be most effective when integrity of the military chain of command is 

important or where it may be difficult or costly to protect 

contractors. For example, one Marine Corps camp in Kuwait initially relied on military personnel to prepare food 

because the threat of chemical or biological attack was 

deemed too high to guarantee the safety of host-nation 

civilians. Once that threat had diminished, contractors 

were brought in to provide those services.

Military personnel also offer an advantage in that their 

legal status is relatively clear-cut. Military personnel are 

subject to the court-martial system if they commit 

crimes, and they have specific rights under the Geneva 

Conventions when operating overseas. As discussed in 

Chapter 1, the legal status of contractors and civilians as 

noncombatants is less clear.

Although contracting out may be efficient for some functions, it may be costly or inefficient for other functions. 

In particular, functions for which there are extensive costs 

involved in setting up, monitoring, and enforcing contracts could make outsourcing a poor option. Critics of 

outsourcing also point to the inflexibility of contracts 

that require military commanders to issue change orders 

to the contract for even minor shifts in tasks.14

Advantages of Federal Civilians

Federal civilians may bring distinct advantages to the 

total mix of personnel deployed overseas. Certain tasks, 

including policymaking or contracting, may be considered inherently governmental but do not necessarily re10. Dibble, Horne, and Lindsay, Army Contractors and Civilian Maintenance, Supply, and Transportation Support During Operations 

Desert Shield and Desert Storm, pp. 3-2 to 3-3.

11. Congressional Budget Office, Structuring the Active and Reserve 

Army for the 21st Century (December 1997), p. 22.

12. Those figures come from OIF deployment data provided by DoD 

to the Congressional Budget Office.

13. For more on the Abrams doctrine and the current use of the 

reserves, see John R. Groves, Crossroads in U.S. Military Capability: The 21st Century U.S. Army and the Abrams Doctrine, Land 

Warfare Paper No. 37 (Arlington, Va.: Association of the United 

States Army, Institute of Land Warfare, August 2001); and Gary 

C. Howard, Reinventing the Army Reserve Again, Landpower Essay 

No. 04-4 (Arlington, Va.: Association of the United States Army, 

Institute of Land Warfare, November 2004).

14. Ellen M. Pint and Laura H. Baldwin, Strategic Sourcing: Theory 

and Evidence from Economics and Business Management (Santa 

Monica, Calif.: RAND Corporation, 1997); and Adebayo Adedeji 

and Mark Rosen, The Feasibility of Outsourcing on Aircraft Carriers

(Alexandria, Va.: CNA Corporation, March 2000).
26 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

quire military performance. Federal civilians also can operate as equal members of a military staff (at least in some 

functional areas). In addition, some military leaders may 

be more comfortable working with federal civilians, who 

(like military personnel) have sworn to uphold and defend the U.S. Constitution.

There is some evidence that federal civilians may be less 

costly than military personnel, even excluding rotationbase considerations. One study identified significant savings from “civilianizing” DoD support functions; the savings were attributed to using lower-ranking civilians to 

replace higher-ranking military personnel. For example, 

a job formerly being performed by an Army colonel—

military rank O-6, which is considered a military equivalent to a civilian GS-15—might be performed by a 

GS-13 instead.15

It may also be more efficient to deploy federal workers 

overseas if they are performing similar work in the United 

States. For example, if a weapon system is being maintained by civilians in an Army depot, those employees 

may be the best people to support or troubleshoot that 

equipment overseas. 

15. General Accounting Office, DoD Force Mix Issues: Greater Reliance 

on Civilians in Support Roles Could Provide Significant Benefits, 

GAO/NSIAD-95-5 (October 1994). 
3

Options for Providing Logistics Support 

to Deployed Army Units Chapter 3: Options for Providing Logistics Support to Deployed Army Units

In its analysis of approaches to provide logistics support to deployed Army forces, the Congressional Budget 

Office explored four options that would alter the current 

mix of military personnel, contractors, and federal civilians. This chapter focuses on two specific options—one 

using military personnel and another using federal civilians—to provide the logistics support currently procured 

from private contractors. CBO evaluated the advantages 

and disadvantages of those two options, including their 

relative costs as well as considerations of flexibility and 

legal concerns.

Option 1: Rely More on Military 

Personnel for Logistics Support

One alternative to the current approach would be to rely 

more heavily on uniformed military personnel—both 

active-duty soldiers and mobilized reservists—to provide 

logistics support to deployed forces. A central focus of 

CBO’s analysis was estimating the incremental costs of 

using organic sources to carry out functions that the 

Army now purchases from the contractor Kellogg, Brown 

& Root through the Logistics Civil Augmentation Program.1 CBO also took into account those costs that the 

contractor and the Army would incur to sustain their 

logistics support capability during peacetime. 

To evaluate this option, CBO analyzed Task Order 59, 

the largest single task order under LOGCAP III. (As of 

March 2004, the LOGCAP III contract encompassed 

roughly 90 individual task orders.) Task Order 59 

requested a wide range of logistics services for about 

130,000 U.S. ground troops and, from June 13, 2003, 

to June 12, 2004, was projected to cost the Army about 

$5.2 billion. By December 2004, Task Order 59 employed 51 percent of all LOGCAP personnel worldwide 

(including foreign nationals and subcontractors).2 Although Task Order 59 does not represent the totality of 

LOGCAP III, it is large enough that it should be representative of the relative costs of contractor-provided and 

Army-provided logistics support.

A distinguishing feature of this option is that the Army 

would have to dedicate existing units, and in some cases 

create new units, in order to provide a rotation base for 

deployed forces. CBO assumes that the rotation base is 

needed for several reasons. First, the Army offers longterm employment with limited opportunities for lateral 

entry. To pursue that personnel strategy, the Army recruits primarily high school graduates and trains them to 

perform required tasks. That training cannot be accomplished if soldiers are on an extended deployment overseas. Regular training is also needed to maintain soldiers’ 

and units’ combat readiness. Second, maintenance of soldiers’ physical and mental health requires a respite from 

the stress and danger of extended deployments. Finally, in 

addition to the hazards associated with such deployments, extended separations from family members could 

undermine the Army’s ability to retain personnel if soldiers were denied the opportunity to rotate back to the 

United States on a somewhat predictable basis. 

CHAPTER

1. Incremental costs are those that the Army would have to incur 

over and above the amounts already budgeted for routine military 

operations of existing units. The latter include basic pay and 

peacetime allowances for active-duty military personnel and the 

routine costs of peacetime training exercises and regular equipment maintenance for existing Army units.

2. Data regarding the number of LOGCAP employees as of December 2, 2004, were supplied to the Congressional Budget Office by 

Kellogg, Brown & Root.
28 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Although a contractor, too, must maintain its logistics 

capability during peacetime, its level of effort can be minimal. The contractor does not share the Army’s commitment to long-term employment for its employees; indeed, one major advantage of contractor support is the 

flexibility of contractors’ arrangements with their employees. Contractors hire numerous host-country and 

third-country nationals—to a much greater degree than 

the military does directly—for whom the term of employment is explicitly temporary (see Table 1-2 on page 5 

for specifics about personnel hired under the LOGCAP 

III contract). Finally, unlike the Army, contractors are 

much more inclined to make lateral hires of personnel 

who are already trained. Thus, contractors need not 

maintain, and the government need not pay for, an 

extensive training infrastructure.

Determining Equivalent Army Units

To estimate the costs of this option, CBO first examined 

the statement of work that the Army developed for Task 

Order 59. That statement describes the specific tasks for 

which the LOGCAP contractor is responsible, including 

the number of Army units requiring support, their populations and locations, and the projected starting and ending dates for each discrete logistics function. The Army’s 

force structure contains logistics units that are configured, manned, and equipped to provide most of the services purchased from the contractor. To determine the 

size and composition of an Army force package that 

could provide the same services as the contractor, CBO 

used the following methodology (which is described in 

greater detail in Appendix A):

B Matched the mission statements of existing types of 

Army units with each function or service specified in 

Task Order 59.

B Calculated the number of Army logistics units of each 

type that would be required to carry out the tasks currently performed by the LOGCAP contractor.

B Determined how many of each type of logistics unit 

presently exist in the Army’s force structure and 

whether those units are committed to ongoing operations.

B Determined whether new units would have to be created to provide the required support functions or to 

serve as a rotation base. (“New” units are not new 

types of units; rather, they are additional units of existing types that must be created when the number of existing units is insufficient.)

CBO estimated the number of units that would be 

needed to carry out each logistics function by examining 

Army allocation rules, which state the notional number 

of troops that a given logistics unit could support; by 

comparing the workload specified in the LOGCAP contract with notional Army unit productivity; and by studying the precedent offered by previous deployments. In a 

few instances, rather than considering output, CBO 

examined the amount and type of equipment utilized by 

the LOGCAP contractor (for instance, the number of 

trucks of a certain size or the rated capacity of electrical 

generators) and then computed the number of Army 

units that would possess the same amount and type of 

equipment.

CBO’s analysis indicated that the Army would require a 

total of 177 units of 38 distinct types, populated by 

12,067 soldiers (see Table 3-1).3

 Although the bulk of 

those units would actually carry out the various logistics 

functions, 10 headquarters units of eight distinct types 

would provide command and control and integrate the 

logistics units into the larger Army force structure intheater. (CBO added headquarters units only when the 

number of such units already in the Army’s divisional 

structure appeared inadequate in light of the addition of 

logistics units.)

CBO next determined whether the required number and 

type of units currently exist in the Army’s worldwide 

force structure (see Table 3-2). The Army’s force structure 

contains 950 units (including both active and reserve 

units) of the types suitable to provide the functions specified in Task Order 59. However, many of those units are 

already being utilized in South Korea, Iraq, or Afghanistan. Because the Army’s rotation base had to be taken 

into consideration, CBO removed from the available 

pool those units currently stationed in South Korea, Iraq, 

or Afghanistan as well as units stationed in the United 

States that would ultimately relieve units now serving in 

3. Unit types are categorized according to the Standard Requirements Code, an Army taxonomy that designates a unit and a particular version of its Table of Organization and Equipment.
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 29

Table 3-1.

Number and Types of Army Units and Troops Required to Provide the Logistics 

Functions Specified in Task Order 59

Table 3-1. Number and Types of Army Units and Troops Required to Provide the Logistics Functions Specified in Task Order 59

Source: Congressional Budget Office.

Note: HHC = headquarters and headquarters company; HHD = headquarters and headquarters detachment.

Unit Type Command and Control Functions

1 60

1 115

1 31

1 65

1 63

1 52

1 49

3 171

1 101

1 75

3 132

1 16

1 11

1 280

1 299

1 10

10 220

12 1,476

48 336

8 32

10 350

2 1,314

1 190

5 150

2 348

2 338

1 170

1 28

4 800

1 186

1 21

15 150

10 2,580

4 216

7 399

5 625

6 336

2 272

177 12,067

HHD Movement Control Battalion

HHD Ordnance Battalion (Ammunition)

All Functions

Total

HHD Ordnance Maintenance Battalion

HHD Supply and Service Battalion

Air Traffic Services Company

Air Traffic Support Maintenance Company

Ammunition Ordnance Heavy Lift Platoon

Area Movement Control Team

HHC Air Traffic Services Battalion

HHC Engineer Brigade

HHD Explosive Ordnance Disposal Battalion

HHD Medical Logistics Battalion

Cargo Documentation Movement Control Team

Cargo Transfer Company

Combat Heavy Equipment Transport Company

Division Support Movement Control Team

Explosive Ordnance Disposal Company

Field Service Company

Firefighting Team

Heavy Engineer Combat Battalion

Heavy Material Supply Company

Medical Detachment (Blood support)

Firefighting Team Headquarters

Force Provider Company

Medium Truck Company (20 ft.)

Port Movement Control Team

Preventive Medicine (Sanitation) Detachment

Utilities Team Engineer Detachment

Petroleum Pipeline and Terminal Company

Prime Power Engineer Battalion

Medium Truck Company (40 ft.)

Medium Truck Company (5,000 gal.)

Movement Control Regulating Team

Nondivisional Ordnance Maintenance Company

Number of Units Number of Troops

Water Purification and Distribution Company

Repair Parts Team

Subsistence Platoon

Supply Company

Command-and-Control Functions

Logistics Functions
30 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table 3-2.

Army Units and Troops Required to Replace Task Order 59, 

Including a Rotation Base

Table 3-2. Army Units and Troops Required to Replace Task Order 59, Including a Rotation Base

Source: Congressional Budget Office.

Iraq and Afghanistan if current conflicts continued.4

With those units removed, the prospective pool consisted 

only of two classes of units: units stationed in the United 

States that do not make up the rotation base for presently 

deployed units, and units stationed in Europe or the 

Pacific region. (The latter units are included because they 

are not currently involved in contingency operations and 

could potentially be reassigned to Iraq.)

Calculating the Rotation Base

The Army’s goal is that, at any given time, only one-third 

of active units should be deployed, while the remaining 

two-thirds of the force structure resides in the rotation 

base.5 Indeed, some Army officials have argued that the 

goal should be made more stringent so that as few as 

one-fourth, or even only one-fifth, of active Army units 

are deployed at any point. CBO conducted its analysis on 

the basis of the assumption that the Army would adhere 

to at least the first of those goals (henceforth referred to as 

the austere rotation goal), so that each active unit currently deployed would be supported by a rotation base 

consisting of a minimum of two nondeployed units. 

177 12,067

259 26,014

691 86,421

___ ______

Total 950 112,435

39 3,936

65 2,273

__ ____

Total 104 6,209

24 2,937

49 2,921

__ ____

Total 73 5,858

101 10,638

693 30,922

___ _____

Total 794 41,560

Reserve and Guard components

Reserve and Guard components

Active component

Active component

Troops

Active component

Units

Reserve and Guard components

Reserve and Guard components

Logistics Functions Specified in Task Order 59

Number of Army Units and Troops Needed to Provide the 

Number of Units of Relevant Types Currently in the Army

Number of Units That Are Available and Match Needed Functions

Number of Units the Army Would Need to Create for Its Rotation Base

Unmatched Functions

Number of Units the Army Would Need to Create to Fill 

Active component

4. Unit rotation is different from the individual-rotation policy that 

was employed during World War II, the Korean War, and the 

Vietnam War and is still in use in South Korea and Europe. Individual rotation maintains the same unit in-theater over time but 

moves individual soldiers into and out of the unit. Thus, Army 

units stationed in South Korea do not require rotational counterparts in the United States.

5. According to Pamela Hess of United Press International, General 

Richard Cody, Vice-Chief of Staff, U.S. Army, made the following 

response to a question during a hearing before the House Armed 

Services Committee, Military Personnel Subcommittee, on February 2, 2005: “For active duty forces, the goal is to have soldiers in 

combat deployment for one year and then in garrison for two 

years. If the deployments are more frequent than that, the Army 

could have a hard time recruiting and retaining adequate numbers 

of soldiers and the all-volunteer force may be in jeopardy.” See 

“Reserves May Get Extended Deployments,” Washington Times, 

February 3, 2005, available at www.washingtontimes.com/

upi-breaking/20050202-074855-4389r.htm.
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 31

Figure 3-1.

Rotational Scheme for Reserve Logistics Units in a Contingency Operation Figure 3-1. Rotational Scheme for Reserve Logistics Units in a Contingency Operation

Source: Congressional Budget Office.

Note: Shaded areas indicate predeployment training, and bold lines indicate deployments.

Although CBO recognizes that the Army is not meeting 

all of its rotation goals for units currently deployed to 

Iraq and Afghanistan, the analysis did not include the incremental cost of creating additional units to make up 

shortfalls in the rotation base for currently deployed 

units. Still, CBO notes that other costs are likely to arise 

in the future if active Army units either deploy more frequently than the goal of one year out of three or remain 

overseas longer than the goal of 12 consecutive months. 

In either case, extended family separation could degrade 

the morale of soldiers and adversely affect troop retention 

levels, possibly requiring offsetting increases in bonuses 

or other compensation incentives for personnel.

The computation of the rotation base is slightly more 

complex for reserve-component units. For the purposes 

of this analysis, CBO assumed that those units—like 

their active-component counterparts—would serve 

12-month tours overseas. However, unlike activecomponent units that undergo continuous training while 

in the rotation base, reserve units must be activated for 

about three months of training immediately before a deployment. In a July 9, 2003, memorandum titled “Rebalancing Forces,” Secretary of Defense Donald H. Rumsfeld stated that the Department of Defense should “limit 

involuntary mobilization [of reserve units] to reasonable 

and sustainable rates, using not more than one year in 

every six as the planning metric.”6 One interpretation of 

that goal is that just one-sixth of Army National Guard 

and Reserve units should be deployed at any point. 

However, a Guard or Reserve unit that deployed for 12 

months every sixth year would actually be mobilized for a 

total of 15 months (including the requisite three-month 

predeployment training period) every six years, or 21 

percent of the time (15 months out of every 72 [6 x12] 

months). A more stringent interpretation of the Secretary’s goal would reduce the portion of time mobilized to 

exactly one-sixth, or 17 percent (see Figure 3-1). That 

Company A 

Company A 

Company B 

Company C

Company D 

Company E 

Company F 

Company G 

Company H 

-3 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 100

Months Before or After Initial Deployment

6. Memorandum for Secretaries of the Military Departments, Chairman of the Joint Chiefs of Staff, and Under Secretaries of Defense; 

as quoted in Office of the Deputy Assistant Secretary of Defense 

for Reserve Affairs (Readiness, Training, and Mobilization), Rebalancing Forces: Easing the Stress on the Guard and Reserve (January 

15, 2004), available at www.defenselink.mil/ra/documents/

rebalancingforcesfinalfinald1.pdf.
32 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

interpretation would require that the reserve component 

contain a total of 7.5 units for every unit deployed (illustrated in Figure 3-1 by companies A through H), or 6.5 

units in the rotation base for every unit deployed. For 

example, Company A would be mobilized for training 

three months prior to a contingency (indicated by the 

shaded bar starting at month -3), then deployed for 12 

months of the conflict, for a total of 15 months. To limit 

mobilization to 17 percent of the time over the long run, 

those 15 months of mobilization would have to be followed by 75 months (5x15) demobilized. Thus, Company A would not be mobilized again until month 87 of 

the contingency (if it lasted that long). To assure continuous coverage during the conflict, seven additional companies (B though H) would have to exist in the hypothetical 

force structure.

If the Army knew in advance that no single conflict 

would exceed, say, five years, it would not need to maintain as many as 6.5 reserve units in the rotation base for 

each unit deployed; a rotation base of only four companies (B through E) would suffice (see Figure 3-1). However, the precise sequence of future conflicts cannot be 

predicted. If the reserve component contained a total of 

only five companies, and if a given conflict extended into 

a sixth year, Company A would have to be mobilized 

again in month 57 of the conflict and deployed overseas 

in month 60, as opposed to the goals of not mobilizing 

again until month 87 and then deploying in month 90. 

The former pattern would have Company A mobilized 

25 percent of the time, as opposed to the goal of 17 percent. To ensure that the mobilization period did not 

exceed 17 percent, regardless of the length of future conflicts, the rotation base would have to contain 6.5 reserve 

units for every deployed unit.

Results of the Calculations

Even with both the deployed units and their rotation base 

removed from consideration, not all units remaining in 

the available pool would be appropriate for replacing the 

LOGCAP contractor because of mismatches between the 

unit types in the pool and the specific contract tasks. 

After analyzing the potential matches, CBO determined 

that 39 active units and 65 reserve units could provide 

104 of the required 177 units (see Table 3-2 on page 30). 

The remaining 73 units needed to perform the functions 

in Task Order 59 would have to be created.

Finally, the Army would have to create new rotation 

units, both to support the 73 units that would have to be 

created to perform the contract functions and to support 

some of the 104 existing units in the pool that are available to deploy but lack an adequate rotation base. 

According to CBO’s estimates, a total of 794 units (101 

active and 693 reserve units) would have to be created, 

populated by 41,560 soldiers. (See Appendix B for a discussion of the calculations used to determine the number 

of existing and new units that would be required for a 

single illustrative type of Army unit, field service companies.) 

Figure 3-2 provides a global depiction of the calculations 

encompassing all unit types required to meet the Army’s 

logistics mission. The rectangle in Figure 3-2 represents 

the 950 units currently existing in the Army’s worldwide 

force structure that possibly could provide the functions 

specified in Task Order 59. Of those 950 units, 19 are 

already committed to South Korea, 19 to Afghanistan, 

and 184 to Iraq. Also depicted in the connected circles 

are the rotation bases for the units committed to Afghanistan and Iraq (calculated separately depending on 

whether each unit belongs to the active or reserve component). A portion of the rotation base for units assigned to 

Afghanistan and Iraq lies outside the Army’s worldwide 

force structure, reflecting the fact that the Army is not 

able to adhere to its rotation goals. However, CBO’s analysis does not include the costs of creating additional units 

to meet the rotation goals for existing deployments to Afghanistan and Iraq. Those rotation base units would be 

missing from the current force structure whether or not 

the Army implemented Option 1, and CBO chose not to 

attribute the cost of creating those new units to the 

Army’s decision on that option.

The Army could provide the services enumerated in Task 

Order 59 by utilizing 104 existing, uncommitted units 

and creating 73 new units. (The latter lie in the upper 

righthand corner of Figure 3-2, outside the rectangle 

denoting the existing force structure.) In an effort to hold 

the mix of active and reserve units as constant as possible, 

CBO assumed that new units would be created in proportion to the current active/reserve mix within each 

Standard Requirements Code. However, the 81 remaining units with matching Standard Requirements Codes 

would be inadequate to provide a rotation base for both 

the existing and new logistics support units. An additional 794 units would have to be created for that purpose. (Table 3-3 summarizes the number of active and 

reserve units needed to carry out the functions in Task 
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 33

Figure 3-2.

Could the Army Perform the Functions in LOGCAP Task Order 59?

Figure 3-2. Could the Army Perform the Functions in LOGCAP Task Order 59?

Source: Congressional Budget Office based on data about authorized units and associated troop levels for fiscal year 2006 from the Army’s 

WebTAADS database.

Notes: Figure is not drawn to scale. 

LOGCAP = Logistics Civil Augmentation Program; SRCs = Standard Requirements Codes; OEF = Operation Enduring Freedom 

(Afghanistan); OIF = Operation Iraqi Freedom (Iraq and Kuwait).

South

Korea 

19 Units 

(1,366 Troops) 

Available and

Matching SRC:

104 Units

(6,209 Troops)

Create:

73 Units

(5,858

Troops)

Task Order 59

Task Order 59 

Nondeployed 

Rotation Base 

Available: 

81 Units

(6,647 Troops)

Create:

794 Units

(41,560 Troops)

Other

Task Orders 

Other

Task Orders’

Nondeployed

Rotation Base

OIF

184 Units

(25,546 Troops)

OIF

Nondeployed Rotation Base:

926 Units

(131,057 Troops)

OEF

Nondeployed Rotation Base:

88 Units

(12,737 Troops)

Exceeding

Desired Rotation

Ratio

OEF

19 Units 

(2,216 Troops) 

Authorized Units with Relevant SRCs

950 Units 

(112,435 Troops) 

Exceeding

Desired Rotation

Ratio
34 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table 3-3.

Summary of Army Units Needed to 

Replace Task Order 59

Table 3-3. Summary of Army Units Needed to Replace Task Order 59

Source: Congressional Budget Office.

Order 59 and to serve as a nondeployed rotation base for 

both existing units and the new units that would have to 

be created.)

The calculations used thus far assume that the Army satisfies only its most austere rotation goals, mobilizing 17 

percent of reserve units and deploying 33 percent of active units at any time.7

 Alternative rotation goals would 

have units deploying less often, thus necessitating a larger 

rotation base and requiring that even more units be created. Suppose that the Army pursued alternative goals of 

mobilizing only 11 percent of reserve units and deploying 

only 20 percent of active units at any point. Then the 

Army would require 10.25 rotational units for each 

reserve unit and four rotational units for each active unit 

needed to perform the functions in Task Order 59. The 

larger rotation base would reduce the available pool, so 

the Army would need to create 89 units (instead of 73) 

with 7,486 troops to perform the functions. And the 

Army would need to create an additional 1,255 units 

(instead of 794) with 78,424 troops to provide a rotation 

base for the existing and new units performing the tasks.

If the Army ignored its rotation goals completely, it 

would need to create only 25 units (instead of 73) with 

2,538 troops to perform the functions. However, 10 of 

the 38 relevant unit types would have all of their units 

deployed at all times (in other words, there would be no 

rotation base at all), and only two of the 38 unit types 

would meet even the austere rotation goals.

Comparing the Contractor’s and the Army’s Costs 

The relative costs of using either organic Army support 

units or a commercial contractor would vary with both 

the frequency and duration of contingency operations 

over any fixed interval. The notional scenario that CBO 

developed alternates five-year wartime periods with fiveyear peacetime periods over a total horizon of 20 years. 

To test whether its major findings are sensitive to the specifics of that scenario, CBO also examined seven other 

scenarios. The results for those alternative scenarios are 

shown later in this chapter, after the results for the basecase scenario.

CBO compared the contractor’s estimated costs of executing LOGCAP Task Order 59 with CBO’s estimates of 

the incremental costs of having Army units provide those 

same functions. In interviews with CBO, representatives 

from Kellogg, Brown & Root suggested that the contractor could acquire goods and services in Iraq faster and at a 

lower cost than the Army could because of its experience 

and efficient contracting process. KBR also asserted that 

some of the goods and services it provided were of higher 

quality than the Army could have provided with its own 

logistics support units. For example, in previous estimates 

of the cost of contingency operations, CBO assumed that 

the Army would provide each deployed soldier with daily 

sustenance consisting of two meals, ready to eat (MREs) 

and one B-ration (canned or dehydrated foods that 

require minimal preparation, no refrigeration, and are 

packaged together in amounts sufficient to feed 50 to 100 

soldiers).8 By contrast, KBR delivers troops four daily 

meals consisting mostly of fresh foods that would require 

refrigeration and more intensive preparation than would 

B-rations, at a daily cost of $26 per person. In situations 

such as that, CBO adjusted the Army’s costs upwards to 

reflect the cost of providing a level of quality equal to that 

7. Ranges for the Army’s rotation goals are reported in Congressional 

Budget Office, An Analysis of the U.S. Military’s Ability to Sustain 

an Occupation in Iraq (September 3, 2003), pp. 34-39.

39 65 104

24 49 73

__ ___ ___

Total 63 114 177

25 56 81

101 693 794

___ ___ ___

Total 126 749 875

64 121 185

125 742 867

___ ___ ____

Total 189 863 1,052

Units Needed to Perform Logistics Functions

Nondeployed Rotation Base

Total Army Units

New

Existing

New

Existing

New

Existing

Components Total

Active 

Component

Reserve and Guard

8. See Congressional Budget Office, Estimated Costs of Continuing 

Operations in Iraq and Other Operations of the Global War on Terrorism (June 25, 2004). See also Congressional Budget Office, 

Estimated Costs of a Potential Conflict with Iraq (September 30, 

2002). 
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 35

being provided by KBR. CBO applied those adjustments 

wherever possible, but some differences may remain between the quality of services provided by the two sources.

Although the concept of quality is often difficult to measure, it should be noted that Army personnel have given 

favorable reviews of KBR’s services in the Balkans, 

Afghanistan, and the Middle East. For example, an Army 

major who served as a team leader for the Defense Contract Management Agency in the Balkans during 2001 

called KBR’s performance in the Balkans excellent “across 

the spectrum of services.”9

In May 2003, following the U.S. military invasion of 

Iraq, the Army directed the contractor to proceed with 

implementing Task Order 59. CBO analyzed the duties 

specified in the task order as of March 10, 2004. By that 

date, the Army had issued seven major “change orders” 

that altered the contractor’s duties and scope of work and 

issued 1,400 minor changes (called letters of technical 

direction) to various versions (as amended by cumulative 

change orders) of the statement of work. The various 

change orders reflected such factors as the addition of 

new tasks, fluctuations in the number of soldiers supported, and shifts in the location of campsites. There 

were no additional major change orders to Task Order 59 

after March 10, 2004, although the stream of minor 

changes did continue. In estimating the cost of performing the work required by Task Order 59, CBO assumed 

that the scope of work under the contract would not 

change further during the period of analysis.

Other factors could also cause costs to vary from those 

estimated in this study. For example, the hardship and 

risk of working in Iraq might increase the contractor’s 

costs for insurance and personnel compensation. Conversely, costs might be lower than estimated here if the 

contractor became more efficient over time in providing 

logistics services. For example, to quickly provide services 

to the Army in Iraq, KBR initially leased much of its 

equipment. As operations in Iraq continue, the contractor might purchase those items to reduce recurring costs 

if the duration of the operation justifies the investment. 

(In fact, KBR reported that, as of December 2004, the 

actual costs of implementing Task Order 59 were lower 

than the amounts originally estimated when work began 

in June 2003.) Thus, the actual costs for work performed 

under Task Order 59 since March 10, 2004, will undoubtedly differ from the estimates shown in this report.

In addition to the statement of work for Task Order 59, 

Kellogg, Brown & Root provided CBO with information 

from its rough-order-of-magnitude (ROM) cost estimate. 

The definitized costs for Task Order 59 were not yet 

available when CBO performed this analysis. The costs in 

the ROM estimate were expressed at a fine level of detail 

but were subject to change during the contract’s period of 

performance. In its ROM cost estimate dated March 10, 

2004, KBR provided its projected costs under Task Order 

59 for a 12-month period—June 13, 2003, through June 

12, 2004. For that one-year period, KBR projected a total 

cost of $5.2 billion. The contractor also provided a 

detailed breakdown of the estimated costs incurred at 10 

particular sites in the Iraqi theater. Because those estimates were for work performed in 2003 and 2004, CBO 

inflated the costs to 2005 dollars for this analysis.

If the Army provided the logistics support specified in 

Task Order 59, it would have to pay some of the same 

start-up costs that Kellogg, Brown & Root incurred under the LOGCAP contract. For example, when estimating the costs of deploying Army construction units, CBO 

used Army data on operating costs that did not include 

expenditures for construction materials. To capture those 

costs, CBO added KBR’s estimate of materials costs to 

CBO’s estimate of total Army costs. Similarly, KBR hires 

foreign nationals to perform many tasks, and the Army 

might follow suit rather than assign soldiers to tasks such 

as groundskeeping and housecleaning. Thus, when CBO 

states that the Army could perform the work in Task Order 59 using 12,067 soldiers (see Table 3-1 on page 29), 

the total number of personnel required (including foreign 

nationals) would actually be larger. But whereas KBR 

hires some foreign nationals on an individual basis, it 

hires others through subcontractors or labor brokers. 

Therefore, CBO adopted some of KBR’s subcontract 

costs (denominated in dollars) without knowing the exact 

number of workers hired under those subcontracts. In 

terms of dollar costs, CBO added a total of $18.7 billion 

of the contractor’s estimated costs for equipment, facilities, materials, and subcontracts to the estimate of the 

Army’s costs for assuming the logistics mission over the 

20-year scenario.

Contingency operations typically extend for more than 

one year. Therefore, the costs incurred during any single 

9. George Cahlink, “Army of Contractors,” Government Executive 

Magazine (February 2002), available at www.govexec.com/

features/0202/0202s5.htm.
36 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

year (for instance, the period for which Kellogg, Brown 

& Root provided detailed data) are possibly misleading 

because they do not correctly account for the pattern of 

higher up-front costs followed over the long run by lower 

recurring costs. To obtain a more complete and accurate 

picture of the relative costs over time of a LOGCAP contractor versus organic Army units, CBO also estimated 

the costs of each approach using a 20-year scenario in 

which the Army would engage in alternating five-year 

cycles of contingency operations and routine peacetime 

operations. To determine the sensitivity of the cost comparisons to that particular scenario, CBO then examined 

the costs associated with seven other scenarios involving 

conflicts of different duration and frequency.

Although logistics requirements will differ somewhat between any two operations, to simplify the analysis, CBO 

assumed in its base-case scenario that identical logistics 

services would be required in both periods of contingency 

operations. If the requirements of the second operation 

differed so dramatically from those of the first that the 

Army needed additional units to perform the work, the 

delay in and expense of manning and equipping those 

new units would lead to higher Army costs than CBO 

estimates in this study.

Results of the Cost Comparisons

According to CBO’s estimates, obtaining logistics support from a LOGCAP contractor would cost about $41 

billion (in 2005 dollars) over the 20-year period assumed 

for this study. Obtaining the same services using Army 

units would cost about $78 billion—roughly 90 percent 

more (see Figure 3-3). CBO estimates that in the first 

year of the 20-year scenario, the Army’s up-front costs for 

acquiring personnel and equipment to outfit new Army 

units would exceed the LOGCAP contractor’s up-front 

costs by about $4 billion. CBO estimates that during 

each subsequent year of contingency operations (except 

the first year of the second contingency operation), the 

cost of using Army units would be about $1.6 billion 

higher than the cost of using the LOGCAP contractor. 

(The more-rapidly accumulating Army costs are reflected 

in Figure 3-3 by the fact that the Army’s cumulative cost 

line is steeper than the dashed LOGCAP cost line 

throughout the contingency periods.) Finally, in the first 

year of the second contingency operation, the Army’s 

costs would exceed LOGCAP costs by only about $100 

million.

Both the Army and the LOGCAP contractor would have 

to purchase equipment to support both the first contingency operation and any subsequent contingency operations. Some of that equipment—items such as highcapacity ice-making plants, waste incinerators, and wastewater treatment equipment—is not routinely allotted to 

Army logistics units. Those items are not available 

through the federal supply system or built to military 

specifications and would have minimal salvage value at 

the end of the operation compared with the costs of shipping the items back to the United States. The LOGCAP 

contractor would purchase essentially the same equipment, which it could use during the operation but which 

would become the property of the U.S. government. 

CBO assumed that, whether the equipment was used by 

Army logistics units or by the LOGCAP contractor, the 

Army would dispose of the equipment at the end of the 

first contingency operation (for instance, by donating it 

to the host country); thus, it would not be available for 

use in the second contingency.

However, CBO assumed that the Army would retain any 

standardized military equipment that is listed in the logistics units’ Table of Organization and Equipment. So, if 

the Army created new units to provide logistics support 

before the first contingency operation, any standardized 

equipment acquired to outfit those units would be available for the second contingency operation. Because the 

Army would have access to that equipment, its cost of 

providing logistics support (excluding the rotation base) 

during the first year of the second contingency operation 

would be about $1.4 billion lower than the LOGCAP 

contractor’s cost. (That difference is reflected in 

Figure 3-3 by the steeper slope of the dashed LOGCAP 

cost line during that one year.) When the rotation base is 

included, though, that advantage disappears and the 

Army’s total cost for that year exceeds the LOGCAP cost 

by about $100 million, CBO estimates.

During peacetime, the Army would not be providing 

either organic or contracted logistics support to deployed 

units. Kellogg, Brown & Root would still need to update 

its deployment plans and maintain its lists of vendors for 

supplies and equipment. However, CBO estimates those 

costs at only a few million dollars each year, or slightly 

less than $100 million over the entire 20-year scenario. 

(The dashed LOGCAP cost line in Figure 3-3 is essentially horizontal during peacetime, indicating that virtually no contract costs are being accumulated.) By contrast, the Army would spend nearly $2 billion per year 
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 37

Figure 3-3.

Comparison of Cumulative Incremental Costs for Providing Logistics Support 

to Deployed Army Forces Using Two Approaches

(Billions of 2005 dollars)

Figure 3-3. Comparison of Cumulative Incremental Costs for Providing Logistics Support to Deployed Army Forces Using Two Approaches

Source: Congressional Budget Office.

Note: LOGCAP = Logistics Civil Augmentation Program.

during those periods to man, train, operate, and maintain 

the new units added to its force structure.

The total costs over the 20-year scenario can be divided 

into four categories: onetime costs, periodic contingency 

costs (those paid at the onset of each contingency operation), annual contingency costs, and routine operating 

costs (see Table 3-4).10 Those costs represent an aggregation over all 38 unit types that the Army would use to 

duplicate the LOGCAP contractor’s services. To illustrate 

the underlying cost calculations for a single Army unit 

type, Appendix B describes the calculations for field service companies.

Reflecting the assumption that the Army requires a rotation base, CBO generated a two-tiered estimate of the 

costs of providing logistics services with Army support 

units: the costs for units deployed to provide logistics services and the costs for the additional units needed to 

maintain a rotation base (see Table 3-4). CBO estimates 

that existing Army units that provide logistics services 

incur periodic costs of about $0.7 billion and annual contingency costs of $1.7 billion. The additional Army units 

that would need to be created to provide logistics services 

would incur periodic costs of $0.6 billion and annual 

contingency costs of $1.6 billion. CBO also estimates 

that it would cost $700 million to man and equip those 

additional units and another $300 million per year to operate them on a routine basis. Finally, CBO estimates that 

the additional units needed for the rotation base would 

cost $5.0 billion to man and equip and another $1.5 billion per year for routine operations.

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

0

10

20

30

40

50

60

70

80

90

100

Contingency

Operations

Contingency

Operations

Peacetime

Operations

Peacetime

Operations

Cost of Army Units

in the Rotation Base

Cost of Army Units

Performing the

Logistics Mission

LOGCAP Contract Cost

Year

10. Routine operating costs are those incurred to maintain the training and readiness levels of both existing and new units. During 

peacetime, those are the only costs incurred. CBO treated the routine operating costs as though they were still incurred during contingency periods; the annual contingency costs were then 

measured as the excess costs above those routine levels. According 

to that methodology, funding for routine costs may be thought of 

as paying for a portion of the total costs incurred during contingency periods.
38 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table 3-4.

Comparison of Incremental Costs for Two Approaches to Providing Logistics 

Support to Deployed Army Units

(Billions of 2005 dollars)

Table 3-4. Comparison of Incremental Costs for Two Approaches to Providing Logistics Support to Deployed Army Units

Source: Congressional Budget Office.

Note: LOGCAP = Logistics Civil Augmentation Program; n.a. = not applicable; * = less than $50 million per year.

a. Onetime costs include the hiring and training of personnel and the acquisition of equipment for additional Army units. Those costs would 

be incurred only in the first year, when the Army decided to provide logistics services in-house. CBO assumed that existing units would 

already be fully equipped; thus, there would be no acquisition costs for those units. Equipment replacement is included under annual contingency and routine operating costs.

b. Periodic contingency costs occur in the first year of each contingency operation and include the costs to procure equipment and construct 

facilities needed specifically for that operation.

c. Annual contingency costs occur in each year of a contingency operation, or for 10 years during the period of this analysis.

d. Routine operating costs occur each year—or 20 times during the period of this analysis. Routine operating costs for the LOGCAP contract 

are only a few million dollars each year. Half of the routine operating costs for additional units would be incurred during periods of contingency operations. Funding for those routine costs could be used to pay for a portion of the costs of contingency operations. Routine 

peacetime operating costs for existing units are excluded from this analysis. Those costs, though incurred by the Army, are already 

included in the Army’s peacetime budget and would not be affected by the Army’s decision to provide logistics services using Army units.

Another cost breakout helps illustrate CBO’s findings 

(see Table 3-5). Some 177 Army units could provide the 

logistics services furnished under Task Order 59. Those 

units alone, without any rotation base, would cost a 

total of $1.3 billion more than it would cost to pay the 

LOGCAP contractor over the 20-year period considered 

in this analysis. Decomposing that total, onetime and periodic contingency costs—including the Army’s costs to 

man, equip, and field the 73 new units needed to perform the work currently provided by Kellogg, Brown & 

Root—would amount to $3.2 billion, or $2.2 billion (40 

percent) less than the LOGCAP contractor’s cost. Recurring contingency costs for the 177 Army units would total $33.6 billion, or $2.3 billion less than the LOGCAP 

contractor’s cost. Although incremental routine costs 

incurred by the Army would be many times greater than

n.a. 2.7 n.a. n.a. 5.4

n.a. n.a. 3.6 * 36.0

___ ___ ___ ___ ___

Total n.a. 2.7 3.6 * 41.4

n.a. 0.7 1.7 n.a. 18.5

0.7 n.a. n.a. n.a. 0.7

n.a. n.a. n.a. 0.3 5.9

n.a. 0.6 1.6 n.a. 17.6

___ ___ ___ ___ ___

0.7 1.3 3.4 0.3 42.7

5.0 n.a. n.a. n.a. 5.0

n.a. n.a. n.a. 1.5 30.7

___ ___ ___ ___ ___

5.0 n.a. n.a. 1.5 35.7

Total 5.7 1.3 3.4 1.8 78.4

20-Year

Total

Annual

Routine

Operating

Costsd

Periodic

Contingency

Costsb

Annual

Contingency

Costsc

Logistics Support Provided by LOGCAP Contractor

Nonrecurring costs

Recurring costs

Logistics Support Provided by Army Units

Routine operations costs (Additional units)

Subtotal

Contingency operations costs (Additional units)

Subtotal

Acquisition costs (Additional units)

Costs to provide rotation base

Contingency operations costs (Existing units)

Acquisition costs (Additional units)

Routine operations costs (Additional units)

Costs to perform mission

Onetime

Costsa
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 39

Table 3-5.

Comparison of Incremental Costs Over 20 Years

(Billions of 2005 dollars)

Table 3-5. Comparison of Incremental Costs Over 20 Years

Source: Congressional Budget Office.

Note: LOGCAP = Logistics Civil Augmentation Program; n.a. = not applicable.

a. Onetime costs include the hiring and training of personnel and the acquisition of equipment for additional Army units. Those costs would 

be incurred in the first year, when the Army decided to provide logistics services in-house.

b. Periodic contingency costs occur in the first year of each contingency operation and include the costs to procure equipment and construct 

facilities needed specifically for that operation.

c. Recurring contingency costs for two five-year contingency periods.

d. Costs for 20 years of routine operations. For existing units, those costs would be included in the Army’s peacetime budget and would 

not be incremental to bringing the logistics functions in-house. For new units, half of those costs would be incurred during contingency 

operations.

e. Direct costs are those to provide logistics services excluding the incremental costs of the Army’s rotation base.

f. Total costs are those to provide logistics services including the incremental costs of the Army’s rotation base.

the cost of hiring the LOGCAP contractor—$5.9 billion 

compared with less than $100 million—total costs for 

Army units delivering logistics support would be only 

$1.3 billion more than total costs under the LOGCAP 

contract over the 20-year period. Given the inherent uncertainty in both the Army’s and KBR’s data, as well as 

uncertainty in the scenario of contingency and peacetime 

periods, that $1.3 billion difference ($41.4 billion for 

LOGCAP versus $42.7 billion for the Army) is probably 

within the margin of error of the cost estimates.

When the costs of creating and maintaining the additional 794 Army units needed for the rotation base are 

considered, however, the total costs of using Army units 

become much higher than those incurred for LOGCAP. 

CBO estimates that the costs to man, equip, and operate 

those units would total $35.7 billion over 20 years. Thus, 

the Army’s incremental costs would be considerably 

higher than the contractor’s because—unlike the contractor—the Army would have to retain in its force structure 

the units and personnel needed to perform logistics 

support.

Sensitivity to Wartime Scenario

It is not possible to predict the frequency and duration of 

contingency operations over a 20-year period. So in addition to its baseline scenario—in which the Army would 

engage in a 20-year cycle of alternating contingency operations and routine peacetime operations, each lasting five 

years—CBO also estimated costs for the following alternative scenarios over the same 20-year period (see 

Figure 3-4):

5.4 35.9 0.1 41.4

1.4 17.1 0 18.5

1.8 16.5 5.9 24.2 ___ ____ ___ ____

3.2 33.6 5.9 42.7

5.0 n.a. 30.7 35.7 ___ ____ ____ ____

Total Army Costs 8.2 33.6 36.6 78.4

-2.2 -2.3 5.8 1.3

2.8 -2.3 36.5 37.0

Logistics Support Provided by LOGCAP Contractor 

Logistics Support Provided by Army Units

Difference in Total Costsf

Onetimea and

New units

Periodic

Contingency Costsb

Recurring

Contingency

Costsc

Recurring

Routine

Costsd

20-Year

Total

Subtotal, direct costs

Difference in Direct Costse

Costs to provide rotation base

Costs to perform mission

Existing units
40 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Figure 3-4.

Scenarios for Contingency and Peacetime Operations Figure 3-4. Scenarios for Contingency and Peacetime Operations

Source: Congressional Budget Office.

Note: Shading indicates periods of contingency operations, and white space indicates periods of normal peacetime operations. Different 

shading patterns distinguish consecutive operations at different locations.

B One contingency operation lasting five years, followed 

by a 15-year period of routine peacetime operations 

(5-15);

B Two 10-year cycles, each consisting of a three-year 

contingency operation followed by seven-year intervals of routine peacetime operations (3-7/3-7); 

B Two 10-year cycles, each consisting of a six-year contingency operation followed by routine peacetime 

operations lasting four years (6-4/6-4);

B Two 10-year cycles, each consisting of a seven-year 

contingency operation followed by three years of routine peacetime operations (7-3/7-3);

B Four five-year cycles, each consisting of a three-year 

contingency followed by two years of routine peacetime operations (3-2/3-2/3-2/3-2);

B Four five-year cycles, each consisting of a four-year 

contingency period followed by one year of routine 

peacetime operations (4-1/4-1/4-1/4-1); and 

B Four consecutive five-year contingency operations, 

each in a different part of the world (5/5/5/5).

For all of those alternative scenarios, CBO estimates that 

the cost of obtaining logistics support from Army units—

including the cost of maintaining units in the rotation 

base—would exceed the cost of obtaining those services 

from the LOGCAP contractor by between $31.8 billion 

and $41.5 billion (see Table 3-6). If the cost of the rotation base was excluded, the costs of providing logistics 

support using organic Army sources could be either more 

or less than the costs incurred under the LOGCAP contract depending on the duration of contingency operations. In general, the more time the Army spends engaged 

in contingency operations, the more cost-effective it becomes to obtain logistics services from Army units. For 

instance, CBO estimates that if contingency operations 

continued for more than 50 percent of the period of analysis, the cost of the LOGCAP contract would exceed the 

costs for Army units deployed to provide logistics support 

(not counting the rotation base)—by nearly $4 billion in 

the case of continuous contingency operations over the 

entire period. However, the relative efficiency of Army 

units during extended periods of contingency operations

Scenario:

5-5/5-5 (Base case)

5-15

3-7/3-7

6-4/6-4

7-3/7-3

3-2/3-2/3-2/3-2

4-1/4-1/4-1/4-1

5-5-5-5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Year
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 41

Table 3-6.

Sensitivity of Army Costs to Various Wartime Scenarios Over 20 Years

(Billions of 2005 dollars)

Table 3-6. Sensitivity of Army Costs to Various Wartime Scenarios Over 20 Years

Source: Congressional Budget Office.

Notes: LOGCAP = Logistics Civil Augmentation Program.

Figure 3-4 describes the various scenarios.

All costs are incremental to the Army’s peacetime budget.

a. Direct costs are those to provide logistics services excluding the incremental costs of the Army’s rotation base.

b. Total costs are those to provide logistics services including the incremental costs of the Army’s rotation base.

is not enough to offset the costs associated with establishing and maintaining a rotation base to relieve deployed 

Army units.

When the Army spends a greater percentage of time 

engaged in contingency operations, the cost disadvantage 

of organically providing logistics services declines relative 

to the cost of obtaining those services from a contractor. 

The Army’s cost disadvantage would also be lower if contingency operations occurred more frequently during a 

given period, because start-up costs for each contingency 

are slightly higher for the LOGCAP contract. For example, in the two scenarios in which contingency operations 

occur 60 percent of the time, the ratio of Army costs to 

LOGCAP costs would be lower if there were four contingencies during that time rather than just two (see 

Figure 3-5). If contingency operations continued for only 

five years after the Army had acquired all of the military 

personnel and equipment needed to provide the logistics 

services required by Task Order 59, the Army’s total costs 

would be nearly three times the contractor’s costs over 20 

years. At the opposite extreme, if the Army experienced 

20 years of uninterrupted contingency operations (albeit 

at four different locations in sequence), the cost of obtaining logistics services from Army units would exceed 

the cost of obtaining them through the LOGCAP contract by only 38 percent.

In addition to the wartime scenario, CBO’s cost analysis 

relied on several other key assumptions. In particular,

5-5/5-5 3-2/3-2/ 4-1/4-1/

` (Base Case) 5-15 3-7/3-7 6-4/6-4 7-3/7-3 3-2/3-2 4-1/4-1 5-5-5-5

50 25 30 60 70 60 80 100

41.4 20.7 23.5 48.6 55.7 54.0 68.4 82.7

Existing units 18.5 9.2 11.6 21.9 25.3 23.3 30.1 37.0

24.2 15.4 17.6 27.5 30.8 28.7 35.3 41.8 ____ ____ ____ ____ ____ ____ ____ ____

42.7 24.7 29.3 49.4 56.1 51.9 65.4 78.8

35.7 35.7 35.7 35.7 35.7 35.7 35.7 35.7 ____ ____ ____ ____ ____ ____ ____ ____

78.4 60.4 65.0 85.2 91.9 87.7 101.1 114.5

1.3 3.9 5.8 0.9 0.4 -2.1 -3.0 -3.9

37.0 39.7 41.5 36.6 36.1 33.7 32.7 31.8

1.90 2.91 2.77 1.75 1.65 1.62 1.48 1.38

Difference in Direct Costsa

Costs to provide rotation base

Subtotal, direct costs

to LOGCAP Costs

New units

Total Army Costs

Ratio of Total Army Costs 

Difference in Total Costsb

Memorandum:

Costs to perform mission

by Army Units

Percentage of Time at War

Logistics Support Provided 

by LOGCAP Contractor

Logistics Support Provided 

Alternating Wartime-Peacetime Scenarios, in Years
42 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Figure 3-5.

Sensitivity of Relative Army Costs 

to Wartime Scenarios

(Ratio of Army costs to LOGCAP costs)

Figure 3-5. Sensitivity of Relative Army Costs to Wartime Scenarios

Source: Congressional Budget Office.

Note: LOGCAP = Logistics Civil Augmentation Program.

CBO used an average of data from 10 selected sites in 

Iraq to determine the values of two critical cost factors 

used in the analysis: the percentage of the Army’s costs 

that are recurring beyond the first year of conflict, and 

the percentage of the contractor’s costs that must be 

added to the estimate of Army costs. However, CBO’s 

results for the base-case scenario would remain essentially 

the same as long as the value of each cost factor for Task 

Order 59 as a whole was within the range of the values 

observed for the 10 sites. (See Appendix C for additional 

details about CBO’s cost analysis. For further discussion 

of the sensitivity of the results, see Appendix D.)

Incremental Versus Total Costs

CBO’s analysis to this point has considered only the 

incremental costs of replacing the LOGCAP contractor 

with Army logistics units. A different approach would 

consider all of the costs of this option including those 

already funded in the Army’s peacetime budget: basic pay 

and peacetime allowances for active-duty military personnel and the routine costs of peacetime training exercises 

and regular equipment maintenance for existing Army 

units (see Appendix E). Those currently funded costs are 

fixed if the Army’s current force structure is assumed not 

to change. Those costs would vary, however, if options 

were considered that replaced existing Army units with 

civilian personnel or contractors, thereby shrinking the 

Army’s force structure below current levels.

Availability of Existing Army Units

As previously noted, Task Order 59 constitutes approximately half of the work being performed under the 

LOGCAP contract in support of Operation Iraqi Freedom. CBO assumed that the Army would be able to 

make use of existing Army units to perform some of the 

work required for Task Order 59. However, if the Army 

eliminated the LOGCAP contract entirely and relied instead on its own logistics units, only a small percentage of 

the required Army units would be available in the existing 

force structure to meet that broader tasking. For example, 

CBO estimates that about 60 percent (104 of 177) of the 

units needed to provide logistics services comparable to 

those outlined in Task Order 59 are available within the 

Army’s existing force structure (see Table 3-3 on 

page 34). However, deploying those units would exhaust 

most of the pool of available units, leaving fewer than 10 

percent (81 of 875) of the units needed to fill the rotation 

base. 

If the Army attempted to provide the logistics services required under Task Order 59 while simultaneously providing services to replace the other task orders that constitute 

the remaining half of the LOGCAP contract, only a few 

existing units would be available in the current force 

structure. If the type and amount of services required by 

those other task orders were identical to the services required by Task Order 59, only 10 percent of the units 

needed to support the mission and only 5 percent of the 

units required to fill the rotation base would be available 

in the current force. The requirements of those other task 

orders undoubtedly differ from Task Order 59, however, 

so the actual availability of units could be different from 

this estimate.

Because the Army would have to acquire more equipment and personnel for the new units, and because the 

recurring costs for routine peacetime operations conducted by those new units would also have to be considered, costs would increase as new units accounted for a 

larger percentage of those required to provide logistics 

services. Thus, doubling the scope of the logistics services 

provided by Army units—to replace the entire LOGCAP 

contract, not just the functions of Task Order 59—would 

more than double the Army’s costs.

0

1

2

3

0 10 20 30 40 50 60 70 80 90 100

One War Two Wars

Four Wars

Percentage of Time at War

Base Case
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 43

Table 3-7.

Comparison of Incremental Costs Over 20 Years for Providing Logistics Support 

Using Only New Army Units

(Billions of 2005 dollars)

Table 3-7. Comparison of Incremental Costs Over 20 Years for Providing Logistics Support Using Only New Army Units

Source: Congressional Budget Office.

Note: n.a. = not applicable.

a. Onetime costs include the hiring and training of personnel and the acquisition of equipment for additional Army units. Those costs would 

be incurred only in the first year, when the Army decided to provide logistics services in-house.

b. Periodic contingency costs occur in the first year of each contingency operation and include the costs to procure equipment and construct 

facilities needed specifically for that operation.

c. Recurring contingency costs for two five-year contingency periods.

d. Costs for 20 years of routine operations. For existing units, those costs would be included in the Army’s peacetime budget and would not 

be incremental to bringing the logistics functions in-house. For new units, half of those costs would be incurred during contingency 

operations.

CBO estimated an upper bound on the Army’s costs of 

replacing Task Order 59 if the Army simultaneously 

replaced all of the remaining task orders in the LOGCAP 

contract. To establish that bound, CBO estimated the 

cost of performing the work in Task Order 59 using only 

new units and compared that estimate with the costs displayed in previous tables assuming a mix of existing and 

new units (see Table 3-7). Using only new units would 

increase onetime and periodic costs by $1.3 billion to establish, man, and equip the new units and would increase 

recurring routine costs by another $12.9 billion because 

personnel and operations costs for those units are not included in the Army’s peacetime budget. Thus, obtaining 

logistics support using only new Army units would cost 

$14.2 billion more than obtaining those services using 

the mix of existing and new units assumed in the earlier 

analysis—and $51.2 billion more than obtaining that 

support from the LOGCAP contractor.

Implications for Contractor-Provided 

Logistics Support

Given that having the Army provide its own logistics 

support would cost more than continuing to use the 

LOGCAP contractor, would it be cost-effective to reduce 

the Army’s current combat-service-support footprint and 

rely even more heavily on contracted logistics support? 

The Army’s logistics units exist primarily to provide support to U.S. soldiers during combat, but they can also 

provide support during an occupation (such as in Iraq), a 

peacekeeping operation (such as in Bosnia), or humanitarian efforts (such as hurricane recovery). Army units, 

particularly from the active component, can be available 

on very short notice to respond to emergencies. All of 

those circumstances would need to be considered as part 

of any analysis exploring whether Army logistics units 

should be reduced if the use of contractors was expanded. 

3.2 33.6 5.9 42.7

3.9 33.6 12.8 50.3

0.7 0 6.9 7.6

5.0 n.a. 30.7 35.7

5.6 n.a. 36.7 42.3

0.6 n.a. 6.0 6.6

Total Difference 1.3 0 12.9 14.2

Routine Costsd

20-Year

Total

 Onetimea

 and

Periodic

Contingency Costsb

Difference

Recurring

Contingency

Costsc

Recurring

Logistics Support Provided by Army Units

Costs to perform mission

Mix of existing and new units

All new units

Difference

Costs to provide rotation base

Mix of existing and new units

All new units
44 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

CBO has not performed the analysis necessary to address 

the question posed above but can make several observations. As of May 2005, according to CBO’s estimates, the 

Army had deployed about 67,000 logistics personnel to 

Southwest Asia (including Afghanistan and several 

adjoining countries, as well as Iraq and Kuwait. See Table 

1-2 on page 5). Some positions filled by those soldiers 

and their predecessors may be considered militaryessential, in part because the danger to contractors at 

certain times and in certain locations, both during major 

combat operations and during the subsequent occupation, would have been too great. In addition, uniformed 

logistics units integrate with combat units in the same 

theater-wide chain of command and operate under the 

same provisions of both U.S. and international law. The 

same cannot be said for contractors.

As discussed in Chapter 1, CBO’s analysis indicates that 

the Army’s expanded use of private contractors over the 

past 10 to 15 years has augmented the Army’s organic 

logistics capability, not replaced it. Concurrent with the 

presence of Army logistics personnel, Kellogg, Brown & 

Root has maintained a large presence in the Iraqi theater 

throughout the period of U.S. involvement there, starting 

in Kuwait both before and during major combat operations in Iraq and expanding into Iraq proper during the 

postcombat occupation. KBR has also informed CBO 

that the successor to Task Order 59—known as Task 

Order 89—will have a wider scope (including more functions and probably a higher annual dollar value) than did 

Task Order 59.

Certain benefits could arise from the expanded use of 

LOGCAP irrespective of its potential to permit reductions in the Army’s combat-service-support units. For example, the Army is currently experiencing recruiting difficulties, particularly in the National Guard and Reserve, 

in which two-thirds of logistics personnel are concentrated (see Table 1-4 on page 17).11 One factor underlying those difficulties is the high frequency of deployment, 

which has prevented the Army from achieving its goals of 

mobilizing, at most, 17 percent of reserve-component 

units and deploying, at most, 33 percent of activecomponent units at any time. Expanding the use of contractor support while maintaining the Army’s current 

logistics force structure would reduce the frequency with 

which logistics units needed to be deployed, possibly mitigating the Army’s recruiting problems. 

Option 2: Rely More on Federal 

Civilians for Logistics Support

Some policymakers have asked whether the military 

could hire federal civilians to provide logistics support to 

deployed forces, as an alternative to either procuring that 

support from private contractors or providing it using 

Army units. Instituting such an option would most likely 

require significant changes to civil service policies and

practices, as discussed below. Because the ramifications of 

such changes are unknown, and their details are difficult 

to define, CBO presents a qualitative discussion rather 

than a detailed cost analysis of the option. 

Background on Federal Civilians

Civilians deploying with the armed forces often provide 

uniquely governmental functions. For example, they may 

develop policy, oversee government contracts, or manage 

government assets or resources. Or they may serve in 

occupations that exist in the private sector (such as secretaries, teachers, or lawyers) but in particular billets that 

the Department of Defense stipulates must be held by 

employees of the federal government. The Army may 

perceive a need for such workers to operate as equal 

members of a military staff, and some military leaders 

may be more comfortable working with federal civilians 

who (like military personnel) have sworn to uphold and 

defend the U.S. Constitution. Civilians who maintain 

weapon systems or platforms in U.S. government facilities (such as maintenance depots) may deploy to provide 

similar support overseas.

The Department of Defense designates certain civilian 

employees “emergency-essential” to ensure that they are 

available during contingency operations or national 

emergencies. The designation applies to civilians who occupy positions overseas or who would be transferred over11. Through June 2005, the Army National Guard had missed its 

monthly recruiting goals for nine consecutive months, was running 10,000 soldiers below its cumulative recruiting goal for fiscal 

year 2005, and was 19,000 below its authorized manning level. 

The Army National Guard also missed its annual recruiting goals 

for fiscal years 2003 and 2004. Through June 2005, the active 

Army was running about 7,000 soldiers below its cumulative 

recruiting goal for fiscal year 2005. See John J. Lumpkin, “Army 

Guard Misses Recruiting Goal Again,” Associated Press, July 12, 

2005; and Lawrence Kapp, Recruiting and Retention: An Overview 

of FY2004 and FY2005 Results for Active and Reserve Component 

Enlisted Personnel, CRS Report for Congress RL32965 (Congressional Research Service, updated June 30, 2005), pp. 10-11, available at www.fas.org/sgp/crs/natsec/RL32965.pdf.
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 45

seas during a crisis. Such positions cannot be converted to 

military billets because they “require uninterrupted performance to provide immediate and continuing support 

for combat operations or support maintenance and repair 

of combat essential systems.”12 Positions that had not 

been previously designated emergency-essential may be 

designated as such as a result of unforeseen circumstances 

or the exigencies of a particular crisis. Any emergencyessential employee who refuses to deploy or to remain 

behind after a noncombatant evacuation operation is subject to disciplinary action, including removal from federal 

service.13

Other positions—those that “cannot be vacated during 

war or national emergency without seriously impairing 

the mission”—are designated “key employee” positions. 

Such employees are considered to have “unique or scarce 

managerial or technical skills required by the wartime 

mission.”14

All federal civilians who deploy must meet certain medical, dental, and psychological qualifications. When appropriate, the government may provide predeployment 

training in topics ranging from standards of conduct and 

customs of the host country to antiterrorism, force protection, first aid, and small arms. As with military personnel, federal civilians who are about to deploy receive wills 

and powers of attorney at government expense. Civilians 

can also receive base exchange and commissary privileges, 

as well as medical care in-theater.

Federal civilians who deploy overseas are subject to the 

Uniform Code of Military Justice if the Congress has 

declared war; they may be subject to the UCMJ during 

an undeclared war if they are retired military personnel. 

The military commander may issue government firearms 

to deployed civilians. However, those civilians would lose 

their noncombatant status if they used their weapons for 

any purpose other than self-defense. Even in cases of selfdefense, they might lose their noncombatant status in the 

eyes of enemy forces.

Deployment of Federal Civilians 

in Recent Operations

Federal civilians have been instrumental in supporting 

recent contingency operations in Afghanistan and Iraq. 

DoD collects monthly data on the total number of nonmilitary personnel in the U.S. Central Command’s 

(CENTCOM’s) area of responsibility, which includes 

operations in both Iraq and Afghanistan as well as U.S. 

troops stationed in adjoining countries such as Kuwait 

and Uzbekistan.15 The number of federal civilians (including personnel from DoD and other federal agencies, 

supporting military operations as well as reconstruction) 

averaged about 3,100 in calendar year 2003 and 3,500 in 

calendar year 2004 (see Figure 3-6).16 The number of 

contractors averaged about 8,000 in calendar year 2003 

and 18,000 in calendar year 2004 (those numbers 

include only U.S. nationals working overseas, not hostcountry or third-country nationals).

In early 2003, in the midst of major combat operations in 

Iraq (which ended on April 30 of that year), a large share 

of contractors were deployed to Iraq and Afghanistan relative to federal civilians. Over the course of 2003, however, the contractor share dropped as civilians entered 

Iraq to assist the State Department and other U.S. agencies with reconstruction. Federal civilians continued to be 

a presence during the first six months of 2004, until the 

Coalition Provisional Authority was disestablished and 

sovereignty was returned to the Iraqis on June 28, 2004. 

After that time, the number of federal civilians fell 

slightly, and the number of contractors rose substantially. 

Between March 2003 and December 2004, Army civilians accounted for an average of 60 percent of all DoD 

civilians deployed to CENTCOM’s area of responsibility.

12. Headquarters, Department of the Army, DA Civilian Employee 

Deployment Guide, Pamphlet 690-47 (November 1, 1995), p. 1.

13. Department of Defense Directive 1404.10, “Emergency-Essential 

(E-E) DoD U.S. Citizen Civilian Employees Overseas” (April 10, 

1992).

14. Department of Defense Directive 1400.31, “DoD Civilian Work 

Force Contingency and Emergency Planning and Execution” 

(April 28, 1995); Department of Defense Instruction 1400.32, 

“DoD Civilian Work Force Contingency and Emergency Planning Guidelines and Procedures” (April 24, 1995). Sometimes a 

conflict can occur if a “key employee” also belongs to a Guard or 

Reserve unit that is activated.

15. CENTCOM’s area of responsibility comprises 27 countries, 

distributed among four contiguous regions: the Horn of Africa; 

South Asia (Afghanistan, Iran, and Pakistan); the Arabian Peninsula, Iraq, and northern Red Sea area; and Central Asia (including 

Uzbekistan and four other former Soviet republics). See www.

centcom.mil/images/27_AOR_Map.jpg.

16. The data are monthly snapshots compiled by the Joint Staff. 

Other government sources have compiled estimates that may 

differ.
46 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Figure 3-6.

Number of U.S. Contractors and Federal Civilians in the U.S. Central Command’s 

Area of Responsibility 

figure 3-6. Number of U.S. Contractors and Federal Civilians in the U.S. Central Command’s Area of Responsibility

Source: Congressional Budget Office based on data from the Department of Defense.

The Department of the Army provided CBO with detailed occupational and pay-grade data for its 1,750 civilian personnel who were deployed to Iraq or Kuwait during November 2004. Figures 3-7 and 3-8 show the 10 

largest “professional and technical” and “trade, craft and 

labor” occupations, respectively.17 Eighty percent of the 

Army civilians deployed to Iraq or Kuwait at that time 

could be classified as “professional or technical.” Those 

occupations include equipment specialists, civil engineers, logistics management specialists, and miscellaneous 

administration and program management specialists. All 

of those occupations involve managing projects or overseeing contractors rather than performing functions 

themselves. Equipment specialists, for example, are 

expected to: 

B Determine or recommend the requirements for the 

appropriate spare parts, tools, and operating instructions to support equipment during tests;

B Maintain liaison with agencies and contractors developing the equipment for the purpose of effecting solutions to problems;

B Review layouts, engineering and production drawings, 

specifications, and test reports; and

B Compare equipment offered by contractors to specifications contained in bid invitations.18

Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Contractors

Federal Civilians

Major combat operations

in Iraq cease (April 30, 2003)

Coalition Provisional Authority

disestablished (June 28, 2004)

17. Federal government jobs are generally divided into two classification systems. Traditionally, the General Schedule is applied to professional and technical jobs, and the Federal Wage System is 

applied to trade, craft, and labor jobs. The occupational mix in 

November 2004 may not be representative of earlier periods during Operation Iraqi Freedom. Major combat operations ended on 

April 30, 2003, and by November 2004 (some 18 months later), 

federal civilians were active in the ongoing reconstruction phase.

18. Position description for the Equipment Services job series, General Schedule 1670, from the Office of Personnel Management’s 

Web site, available at www.opm.gov/fedclass/1600/1600_10.asp.
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 47

Figure 3-7.

Top 10 “Professional and Technical” Occupations of Army Civilians 

Deployed to Iraq or Kuwait, November 2004 

Figure 3-7. Top 10 “Professional and Technical” Occupations of Army Civilians Deployed to Iraq or Kuwait, November 2004

Source: Congressional Budget Office based on data from the Department of the Army.

Note: Data include predominantly professional and technical employees paid on the General Schedule. Data also include one member of the 

Senior Executive Service and a small number of employees paid with nonappropriated funds or from special pay plans.

In addition to those shown in Figure 3-7, other professional and technical occupations represented in Iraq and 

Kuwait included auditing, intelligence, program and 

budgetary analysis, and safety and occupational health.

The remaining 20 percent of Army civilians deployed to 

Iraq or Kuwait in November 2004 worked in the trade, 

craft, and labor (or wage-grade) specialties. By far the 

largest single wage-grade occupation represented was that 

of heavy mobile equipment mechanic (see Figure 3-8). 

Those mechanics overhaul and repair heavy-duty vehicles 

such as bulldozers, cranes, fire trucks, locomotives, and 

road graders. Although that was the largest wage-grade 

occupation, the presence of heavy mobile equipment 

mechanics overseas was nonetheless small: they accounted 

for only 94 of the 1,750 deployed civilians recorded in 

the Army’s data. Additional occupations not shown in 

Figure 3-8 (because of small numbers) included ammunition, explosives, and toxic-materials specialists; crane 

operators; forklift operators; and food-service personnel. 

Those trades are also found in the private sector, of 

course, but those federal civilians may be used in special 

situations, such as when the work must be performed in 

particularly dangerous areas or when there might be a 

danger of sabotage if host-country or third-country 

nationals were used instead of U.S. civilians.

The Army data also provided information about the 

employing organizations. About 20 percent of the Army 

civilians worked for the U.S. Army Engineering District 

(Gulf Region), which consists of three district offices in 

Iraq and is responsible for management and quality control of Iraq reconstruction and new-construction efforts. 

The district did not exist during major combat operations, and its mission does not include combat support or 

combat service support to Army combat units. Generally, 

positions are filled with personnel from other engineering 

districts or from other parts of the Army or federal civilian workforce, who volunteer to serve a six-month to 

one-year term (which may be extended). Most of the 

actual construction is contracted out to local Iraqi contractors. 

Construction Control

Contracting

Miscellaneous Clerk and Assistant

Information Technology Management 

Quality Assurance

Engineering Technician

Miscellaneous Administration

 and Program Management

Logistics Management

Civil Engineering

Equipment Specialist

0 20 40 60 80 100 120 140 160 180

Number of Army Civilians
48 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Figure 3-8.

Top 10 “Trade, Craft, and Labor” Occupations of Army Civilians 

Deployed to Iraq or Kuwait, November 2004 

Figure 3-8. Top 10 “Trade, Craft, and Labor” Occupations of Army Civilians Deployed to Iraq or Kuwait, November 2004

Source: Congressional Budget Office based on data from the Department of the Army.

Note: Data include predominantly trade, craft, and labor employees paid under the Federal Wage System but also include a small number of 

employees paid with nonappropriated funds.

Other Army organizations sent civilian personnel to support combat operations. The Army Tank, Automotive, 

and Armaments Command, for example, sent more than 

250 civilian personnel from its headquarters and from its 

facilities in Anniston (Alabama), Red River (Texas), and 

Rock Island (Illinois). The Army Communications and 

Electronics Command sent another 120 personnel, including some from the Tobyhanna (Pennsylvania) depot. 

This command sustains and supports command, control, 

communications, computers, intelligence, sensors, and 

reconnaissance (C4ISR) equipment. Other Army organizations that deployed federal workers include the Aviation and Missile Command, the Army Field Support 

Command (which manages the LOGCAP contract as 

well as the Army’s prepositioned stocks of supplies), and 

various ammunition, logistics, and traffic-management 

centers.

Federal Civilian Compensation During Deployment

Federal civilians who deploy receive foreign-post differential and danger pay, as specified in State Department 

guidelines. Thus, most federal civilians supporting Operation Iraqi Freedom have received an additional 50 percent premium over their base salary.19

Federal civilians may be eligible for overtime pay, compensatory time, shift-differential pay, and Sunday/holiday 

premium pay. Overtime pay rates, however, are capped, 

as is total cash compensation. Federal civilians may also 

earn a per diem if they have temporary-duty status. (For 

example, civilians deploying to Iraq who are housed on 

government compounds earn about $10 per day to cover 

meals. Those living in hotels in Baghdad receive $154 per 

Materials Handling

Industrial Equipment Mechanic

Electronic Integrated Systems Mechanic

General Services and Support Work

Lock and Dam Operating

Machining 

High-Voltage Electrician

Lock and Dam Repairing

Electronics Mechanic

Heavy Mobile Equipment Mechanic

0 10 20 30 40 50 60 70 80 90 100

Number of Army Civilians

19. For additional details on pay premiums, see the Web site of the 

Department of State’s Office of Allowances (www.state.gov/m/a/

als).
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 49

day toward food and lodging. Those living in Kuwaiti hotels—where hotel rates are significantly higher—receive 

$344 per day.)20 The Army does not record how much 

overtime is earned by federal civilians supporting OIF, 

but for planning purposes the Army assumes an average 

60-hour workweek.

The Federal Employees’ Group Life Insurance program 

fully covers federal civilians who might be killed during 

hostilities. In addition, federal civilians receive many of 

the same casualty entitlements and benefits that military 

personnel receive if they are killed in the theater of 

operations.

The Internal Revenue Service has different rules for military personnel, contractor personnel, and federal civilians 

who earn income while stationed in a combat zone. The 

President designates by executive order a combat zone as 

an area in which the U.S. military is engaged in combat. 

For enlisted personnel and warrant officers, active-duty 

pay earned during any month the individual serves in a 

combat zone is excluded from federal taxable income. 

Also excluded are imminent-danger pay and hostile-fire 

pay, as well as reenlistment bonuses if the voluntary 

extension or reenlistment occurred during a month in 

which the individual served in a combat zone. The rules 

are similar for commissioned military officers, except that 

the combat zone exclusion is capped at the highest rate of 

enlisted pay (which is generally lower than most officers’ 

pay) plus any imminent-danger pay and hostile-fire pay 

that the officer received.21

Under some circumstances, the income that contractor 

personnel earn overseas is also excluded from federal income taxes. A major condition is that “a U.S. citizen or a 

U.S. resident alien . . . is physically present in a foreign 

country or countries for at least 330 full days during any 

period of 12 consecutive months.”22 The tax exclusion is 

capped at $80,000; it applies to any foreign country, not 

just those designated as combat zones.

Finally, the tax treatment is different for U.S. government 

civilian employees stationed abroad. If they served in a 

combat zone or a qualified hazardous-duty area in support of the U.S. military, they qualify for certain extensions of deadlines for filing tax returns and for paying 

taxes. Their income earned overseas from federal employment is fully taxable (except for a few miscellaneous 

allowances that cover expenses such as repairs to leased 

homes, education of dependents, and motor vehicle shipment).23

Analysis of Option 2

Compared with the federal government, private contractors generally have more flexibility in hiring and firing 

workers. Typically, hiring new civil servants requires numerous steps and often involves both the hiring agency 

and the Office of Personnel Management. Contractors 

may also possess broader options when it comes to salary 

and other compensation. Pay for most federal employees 

is dictated by the General Schedule. Thus, an employee 

at GS-11, step 5, earns the same salary regardless of 

whether he or she is a budget analyst or a geologist. The 

level and step that a federal employee achieves in the 

General Schedule are based on seniority, not productivity 

alone. Federal civilians receive a fixed benefit package, 

and part-time federal employees receive those benefits as 

well, albeit at a reduced rate. Contractors may offer limited benefits, but when required, may have greater flexibility in their use of bonuses and other financial incentives.24

Command Structure. Federal civilians who work within 

the military’s unit structure—whether in the United 

States or deployed overseas—report up through the military chain of command in the same manner that military 

20. Daily rates were downloaded from the State Department’s Web 

site as of December 2004 (www.state.gov/m/a/als/prdm/). Those 

daily rates were in effect from the summer of 2003 through 

December 2004. The nightly government rate for the Kuwait City 

Marriott on March 30, 2005, was $226 plus a 15 percent service 

fee. The rate for comparable hotels in Baghdad ranged from $36 

to $90 per night.

21. Department of the Treasury, Internal Revenue Service, Armed 

Forces’ Tax Guide, Publication 3.

22. Department of the Treasury, Internal Revenue Service, Tax Guide 

for U.S. Citizens and Resident Aliens Abroad, Publication 54.

23. Department of the Treasury, Internal Revenue Service, U.S. Government Civilian Employees Stationed Abroad, Publication 516.

24. The new National Security Personnel System is intended to 

increase DoD’s flexibility in hiring, firing, and compensating 

employees. However, that system has not yet been implemented, 

and its effectiveness is unknown. Some information may be 

gleaned from workforce demonstration projects—such as the 

Navy’s at its China Lake, California, research facility—that contain features similar to those proposed for the new system. See 

Shawn Zeller, “Smashing the System,” Government Executive Magazine (November 2003), available at www.govexec.com/features/

1103/1103s2.htm.
50 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

personnel do. However, the notion of a purely civilian 

unit would raise new challenges. DoD civilians are generally not organized into deployable all-civilian units, in the 

way that military personnel are organized into platoons, 

companies, battalions, and so forth. In the analysis of 

Option 1—which explores the possibility of relying on 

Army units for a greater share of logistics support—CBO 

added headquarters elements to coordinate the activities 

of the discrete Army units that would perform each individual function (for instance, firefighting team, supply 

company, and so on). The same degree of coordination 

would be necessary under the all-civilian concept. But 

although civil service bureaucracies in the United States 

contain similar management personnel, they are not necessarily qualified to lead an operational unit into the field 

(particularly during hostilities). DoD would have to 

recruit and train people for the operational leadership 

positions.

One exception is that U.S. depots deploy civilian teams 

called Forward Repair Activities to support the same 

weapon systems that they repair in the depots. Other 

occupations, such as auditors, may also operate independently of the military command structure. Yet those 

teams are small and their missions are highly specialized. 

Their missions do not correspond to the large-scale logistics support overseen by the LOGCAP contractor, which 

would require several thousand personnel no matter what 

the mix of military personnel, contractors, and federal 

civilians.

Training and Rotation Base. One can envision a spectrum 

of workforce alternatives, with military personnel at one 

extreme, contractor personnel at the other, and federal civilians somewhere in the middle. Regarding military personnel, CBO assumes the need for a rotation base enabling soldiers to (roughly speaking) alternate between 

periods of deployment overseas and periods of both refresher and advanced training in the United States. Those 

training opportunities help the soldiers advance along 

their career paths and maintain their readiness for combat. The rotations back to the United States also alleviate 

the problems of family separation that would ensue under 

indefinite deployments overseas.

Contractors are better able than the government to 

recruit trained personnel at all levels of experience from 

the private-sector labor market. In addition, they do not 

necessarily guarantee a long-term employment relationship, particularly when staffing for a contingency operation under the LOGCAP contract. Thus, contractors 

may offer their employees only limited training opportunities. They may also expect their employees to deploy 

overseas for extended periods of time, either compensating those employees (and doing so with greater flexibility 

than is available to the Army) or simply accepting a 

higher turnover rate and replenishing their workforce 

when necessary.

Federal civilians lie somewhere between those two 

extremes. The Army’s personnel system does not discourage the lateral entry of trained civilians, so the Army 

would not have to train and develop civilians to the same 

degree that it does military personnel. Still, the Army 

might need to expand its training establishment in the 

United States to provide civilian logistics personnel with 

advanced and continuing training opportunities. Moreover, if federal civilians were expected to deploy with the 

same frequency and duration that military personnel do, 

the Army might need to establish and maintain a civilian 

rotation base in the United States to avoid retention 

problems stemming from protracted family separation. 

(The State Department effectively maintains a civilian 

rotation base when it rotates foreign service officers 

between assignments in the United States and those in 

U.S. consulates and embassies overseas.)

CBO’s detailed cost analysis of Option 1 indicates that 

the Army’s need for a rotation base is the main factor 

pushing its costs above those of the LOGCAP contractor. 

CBO has not conducted a similar, detailed analysis of the 

costs of using federal civilians. However, the requirement 

to maintain a training and rotation base for civilians 

would tend to make the civilian option more costly than 

relying on the LOGCAP contractor but less costly than 

using Army logistics units.

Another Example of Federal Civilians in

Operational Roles

The recent shift of airport security screeners from private 

contractors to federal civilians may provide insights into 

civilianizing a government function. The Aviation and 

Transportation Security Act, signed by the President on 

November 19, 2001, gave the newly created Transportation Security Administration (TSA) one year to create a 

security screener workforce composed predominantly of 

federal civilians. The characteristics of the federalized 

screener workforce include a substantially increased 

degree of training and a higher level of workforce stabil-
CHAPTER THREE OPTIONS FOR PROVIDING LOGISTICS SUPPORT TO DEPLOYED ARMY UNITS 51

ity, with substantially lower turnover, than had been the 

case under private contractors. 

However, TSA policy circumscribes job tasks: screeners 

are forbidden to perform other security duties (such as 

visually inspecting planes or runways). That policy has 

been problematic at some smaller airports.25 Similar 

restrictions on the scope of work could make the use of 

federal civilians less desirable for rapid deployment overseas in support of contingency operations. 

25. Stephen Losey, “Airports Wary of Privatizing Screeners,” Federal 

Times, April 18, 2005, p. 10.

4

Additional Options to 

Change the Personnel Mix Chapter 4: Additional Options to Change the Personnel Mix

This chapter considers two additional options that 

would change the mix of military personnel, contractors, 

and federal civilians that support deployed forces, albeit 

on a more limited scale than Options 1 and 2 (which are 

explained in Chapter 3). 

When units are stationed at home in the United States, 

their weapon systems are maintained by a mix of their 

own organic maintenance personnel (enlisted technicians 

assigned to operational units such as aircraft squadrons or 

artillery battalions), federal civilians and contractor personnel working at government depots, and contractor 

personnel working at their own commercial facilities. 

Both civilians and contractor personnel could accompany 

the military units when they deployed overseas and continue to support their weapon systems. Under Option 3, 

federal civilians would assume that entire responsibility 

and replace the contractor’s technical representatives who 

currently deploy in support of weapon systems. (Option 

3 is more limited in scope than Option 2, under which 

federal civilians would replace the considerably larger 

number of contractor personnel who provide large-scale 

logistics support under the Logistics Civil Augmentation 

Program.)

Option 4 would create a new labor category that blended 

the characteristics of contractor personnel and military 

reservists. One such idea is being implemented by the 

British Ministry of Defense (MoD) and is called sponsored reserves. Under that concept as it would be applied 

in the United States, individuals would work for U.S. 

defense contractors during peacetime but would also be 

members of the military reserves and would deploy as 

activated reservists during wartime. One distinguishing 

feature of this arrangement is that the reservists would 

deploy in the same jobs and with the same units in which 

they had been working during peacetime. Yet the reservists would differ from the Department of Defense’s current dual-status civilians (also known as military technicians) because they would work as contractors rather than 

as federal civilians during peacetime.

Option 3: Substitute Federal Civilians 

for Deployed Contractors Who Support 

Weapon Systems

The Army defines system contractor support as the use of 

commercial sources to provide support for Army materiel, including weapon and supply systems, aircraft, and 

command-and-control infrastructure.1

 Such support can 

involve maintenance, the supply and distribution of 

parts, training, software support, and even more extensive 

work, such as rebuilding or overhauling components or 

systems.2

System contractor support falls under a broad concept 

that DoD refers to as integrated logistics support (ILS). 

The Army defines ILS as “all elements of planning, developing, acquiring, and sustaining Army materiel throughout its life cycle.”3 Military personnel, federal civilians, 

and contractors can all be involved in aspects of ILS. 

Some systems rely on contractors for some or all logistics 

support, a concept known as contractor logistics support 

(CLS), whereas other systems rely primarily on ILS provided organically by military personnel and federal civilians. Yet another form of support is a public/private partnership, such as a contractor using government facilities 

CHAPTER

1. Army Field Manual 3-100.21, Contractors on the Battlefield (January 2003), p. 1-3.

2. Army Regulation 700-127, Integrated Logistics Support (November 

1999), p. 28.

3. Ibid., p. 5.
54 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

to repair military equipment. Two examples illustrate the 

range of ILS concepts: For the Stryker medium-weight 

armored vehicle, contractors currently provide most logistics functions, including maintenance, technical assistance, and the supply and distribution of parts; in contrast, the Abrams tank uses system contractors only for 

technical support, as required.4

Logistics support decisions are made as part of the process 

of acquiring a system and are taken into consideration 

along with decisions about technical specifications, the 

development schedule, procurement quantity and schedule, and so on. In deciding whether to adopt contractor 

logistics support for a system, the Army weighs a number 

of factors including cost-effectiveness, the time frame for 

fielding the system, labor force requirements, and organic 

and contractor personnel skills.5 DoD may use CLS on 

either a temporary basis (known as interim contractor 

support)—with a goal of transitioning to organic unitlevel or government-depot support later—or for the system’s entire life cycle.

Studies by the Government Accountability Office (formerly the General Accounting Office), RAND Corporation, and the Army indicate that many major Army systems receive some type of support from system 

contractors.6

The Role of Federal Civilians Deploying to Support 

Weapon Systems 

The roles of federal civilians and of contractors overlap in 

supporting weapon systems. To learn more about the role 

of federal civilians in Iraq and Afghanistan, the Congressional Budget Office surveyed representatives from the 

Army depots at Tobyhanna and Letterkenny (Pennsylvania) and Corpus Christi (Texas).

Representatives from Tobyhanna Army Depot report that 

they send both individuals and teams to support combat 

units overseas. Teams are called Forward Repair Activities 

(FRAs), and they generally support the same systems that 

they repair in the depot. As of December 2003, Tobyhanna had deployed FRAs to five areas in Iraq, plus one 

each in Afghanistan, Bosnia, Kosovo, and Kuwait. Most 

of the employees were electronics technicians who deployed for tours lasting between 30 days and 179 days. 

Furthermore, most employees who accepted a 179-day 

rotation were willing to volunteer for a second rotation of 

equal length.

FRAs are generally considered stationary, with the exception of the FRA-4th Infantry Division and the FRAStryker brigade combat team (SBCT) 1, which have personnel embedded in the fighting force—traveling, eating, 

and sleeping with the unit they are supporting. Even personnel in stationary units, however, can move to other locations or respond to specific calls for technical assistance. 

Tobyhanna personnel generally stay in combat-support or 

combat-service-support roles away from the areas of 

fighting, but they may go to (or near) those areas periodically, if necessary. 

Tobyhanna services much of the Army’s C4ISR equipment in the United States and overseas, including radios, 

missile guidance and control systems, landing systems, 

and radar and air traffic control systems.7 The depot fabricates installation kits of systems hardware and installs 

and tests those kits as needed for Army and Marine Corps 

customers. Depot personnel also test, troubleshoot, and 

repair those systems, including electronic and mechanical 

components as well as computer hardware.

Tobyhanna personnel report that they work with contractors, who provide technical support of hardware and software, but that contractors and depot personnel are not 

part of the same teams. Also, one depot employee served 

as the contracting officer representative for the Army’s 

modular base-camp construction team, overseeing employees of Kellogg, Brown & Root. Contractors and depot personnel may work on different components of the 

same system; for example, a private contractor might 

4. U.S. Army Combined Arms Support Command, Systems Contractor Support of 4th Infantry Division (August 2001), p. A26.

5. Army Regulation 700-127, pp. 28-29.

6. General Accounting Office, Defense Department Maintenance: 

DoD Shifting More Workload for New Weapon Systems to the Private 

Sector, GAO/NSIAD-98-8 (March 1998); General Accounting 

Office, Defense Logistics: Opportunities to Improve the Army’s and 

the Navy’s Decision-Making Process for Weapon Systems Support, 

GAO-02-306 (February 2002); Frank Camm and Victoria A. 

Greenfield, How Should the Army Use Contractors on the Battlefield? Assessing Comparative Risk in Sourcing Decisions, MG-296 

(Santa Monica, Calif.: RAND Corporation, 2005); and U.S. 

Army Combined Arms Support Command, Systems Contractor 

Support of 4th Infantry Division.

7. C4ISR equipment is for command, control, communications, 

computers, intelligence, sensors, and reconnaissance.
CHAPTER FOUR ADDITIONAL OPTIONS TO CHANGE THE PERSONNEL MIX 55

maintain an aircraft, while depot personnel would provide and maintain the communications gear on that

aircraft.

Responses from representatives of Letterkenny Army Depot and Corpus Christi Army Depot were generally consistent with those of representatives from Tobyhanna 

Army Depot. Letterkenny Army Depot tests and repairs 

the Patriot missile and its supporting systems. During 

2003, small numbers of Letterkenny civilian employees 

traveled to Kuwait, Iraq, and Saudi Arabia to perform 

such functions as testing circuit cards used in the Patriot 

system. One team was sent to rebuild part of the Avenger 

fire-control system.8

Corpus Christi Army Depot repairs and maintains helicopters for all of the military services. As part of that mission, the depot sends personnel overseas as needed to perform one of two main functions. One group performs 

hands-on mechanical work on engines, operating the 

Flexible Engine Diagnostic System. That team is led by 

one Army civilian with two contractors. A second 

group—the Analytical Investigation Division—investigates helicopter crashes. An investigator from Corpus 

Christi generally will travel alone and stay less than two 

weeks. The investigator is mobile and may go near the 

crash site until the crashed aircraft is recovered and 

brought to a military installation. Depot personnel perform the investigation, but contractors may be engaged 

to move the aircraft from the crash site.

On the basis of that information, it appears that federal 

civilians provide testing or repair work that is consistent 

with their work in government depots in the United 

States—that is, supporting systems that are maintained in 

those depots. The systems that rely more on contractor 

support at home, or those whose repairs and other logistics functions have not yet transitioned to government 

personnel, may require that contractors deploy. Thus, the 

maintenance philosophy of the system (whether it is routinely maintained by contractors or by civilian personnel) 

determines whether contractors or federal civilians deploy 

with the forces. Even systems that are maintained by contractors, however, receive oversight from government officials, who are often civilians.

Deployment of System Contractors in 

Recent Operations 

System support contracts are typically prearranged outside of the wartime theater. For the Army, those contracts 

are usually awarded by the program manager (PM) or 

program executive officer (PEO) or by the Army Materiel 

Command.9 Some system support contracts contain specific language pertaining to contractor deployment. In 

other instances, deployed CLS personnel may be funded 

through modification of an existing contract to support 

the system within the United States or through an entirely new contract.

The PEO or PM who oversees a particular system may 

track the number of contractor personnel who deploy, 

but until recently there has been little or no centralized 

tracking of contractors.10 Two of the larger program executive offices, Ground Combat Systems (GCS) and 

Command, Control, and Communications—Tactical 

(C3T), took responsibility for tracking all PEOs’ deployed system contractors in Operation Iraqi Freedom 

(see Figure 4-1). Following the initial buildup of forces 

early in calendar year 2003, the number of system contractors remained between roughly 350 and 500 through 

June 2004. The November 2003 arrival of the Army’s 

first deployed SBCT in Iraq resulted in a sudden boost in 

the number of deployed contractors. (SBCTs, under their 

current interim contractor support arrangement, require 

relatively large numbers of contractors in-theater.)

CBO estimates that between January 2003 and May 

2004, the number of active-duty Army personnel per system contractor has hovered between about 300 and 400 

(see Figure 4-2). However, the quantity and location of 

contractors in-theater is fluid, with individuals constantly 

arriving, departing, and relocating. The PEOs who pro8. Avenger is a lightweight, mobile, transportable air-defense system 

equipped with Stinger surface-to-air missiles, mounted on a high 

mobility multipurpose wheeled vehicle. See the description of 

Avenger at the Federation of American Scientists’ Military Analysis Network Web site (www.fas.org/man/dod-101/sys/land/

avenger.htm).

9. A PEO manages a portfolio of related programs, and the PMs for 

those programs report directly to the PEO. Two examples in the 

Army are the PEO for Aviation, Tactical Missiles, and Air and 

Missile Defense and the PEO for Simulation, Training, and 

Instrumentation.

10. The Code of Federal Regulations recently incorporated rules that 

require the contractor to “. . . establish and maintain with the designated Government official a current list of all contractor personnel that deploy with or otherwise provide support in the theater of 

operations” (48 C.F.R. 252.225).
56 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Figure 4-1.

Number of Army System Contractors Deployed to Operation Iraqi Freedom Figure 4-1. Number of Army System Contractors Deployed to Operation Iraqi Freedom

Source: Congressional Budget Office based on data from Department of the Army, Program Executive Offices for Ground Combat Systems 

and for Command, Control, and Communications—Tactical.

Note: The sudden rise in the number of deployed contractors in November 2003 resulted from the arrival of the Army's first deployed Stryker 

brigade combat team in Iraq. (Those units require relatively large numbers of contractor maintenance personnel.)

vided those data estimated that at least 80 percent, but 

not all, of the system contractor personnel were tracked. 

Therefore, the numbers of system contractors in Figure 

4-1 may be undercounts, and the ratios of soldiers to system contractors in Figure 4-2 may correspondingly be 

overcounts.

Ideally, deployed system contractors would remain behind the front lines during a conflict, and the equipment 

would be transported back to them for repair or maintenance. Army regulations state that contractors should be 

assigned duties at echelons above division, which historically has implied operating in the rear areas.11 However, 

compliance with that regulation is incomplete. Contractors are permitted to operate in forward locations on a 

temporary basis, and some system contractors can be embedded in the fighting force. Furthermore, the current 

operations in Iraq do not clearly delineate between forward and rear areas. Consequently, system contractors 

could be exposed to combat. Based on data from the 

PEOs, between about 40 percent and 45 percent of system contractors deployed to OIF in the spring of 2004 

were operating in Iraq, with the remaining portion in 

Kuwait. Some locations within Iraq are more dangerous 

than others, but the PEOs did not provide more detailed 

data by location.

Analysis of Option 3

PEOs cite a number of reasons for using contractors 

rather than military or federal civilian personnel, including skill requirements, personnel limitations, cost savings, 

and policy guidance. Among the PEOs that CBO queried 

(including PEOs of mature and developing systems as 

well as systems for which the PEOs reported having large 

numbers of contractors in support of OIF), most cited 

contractor skill as their justification for using contractor 

logistics support (see Table 4-1). The increasing complexity of today’s military systems amplifies the need for technically skilled support personnel. Most system contractors have had military experience and may have supported the same or a similar system while serving on 

active duty. Because of their familiarity with a system, 

those contractors can provide engineering and mainteMar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04

0

50

100

150

200

250

300

350

400

450

500

Major Combat

Operations

11. Army Regulation 715-9, Contractors Accompanying the Force

(October 1999), p. 14.
CHAPTER FOUR ADDITIONAL OPTIONS TO CHANGE THE PERSONNEL MIX 57

Figure 4-2.

Number of Soldiers per Army System Contractor 

Deployed to Operation Iraqi Freedom 

Figure 4-2. Number of Soldiers per Army System Contractor Deployed to Operation Iraqi Freedom

Source: Congressional Budget Office based on data from Department of the Army, Program Executive Offices for Ground Combat Systems 

and for Command, Control, and Communications—Tactical.

Note: Each data point represents the average value for the month indicated.

nance solutions that are beyond routine, potentially preventing the need to return an item to the depot for repair.

Several factors can hinder the Army’s ability to maintain 

its own systems with uniformed military personnel. In 

some cases, the Army may be unable to retain adequate 

numbers of personnel when competing against morelucrative civilian employment opportunities. In other instances, a system may be fielded in such small numbers 

(so-called low-density systems) that training military personnel is not cost-effective. If a system is in an early or 

“spiral” stage of development, the Army simply may not 

have had time to develop its own support capability.12

Systems may also be covered under a manufacturer’s warranty that requires specified personnel to perform maintenance and repair, potentially preventing the Army from 

supporting the systems itself. 

Legal and Command-and-Control Issues. System contractors working on the battlefield, akin to other types of 

contractors, present legal and command-and-control issues. Language in recently updated federal regulations is 

intended to reinforce the status of U.S. contractors as 

noncombatants, thereby covered by the Geneva Conventions.13 As noted in Chapter 1, however, enemy forces 

may not recognize the noncombatant status of U.S. contractors who maintain or repair weapon systems, instead 

viewing them as “taking an active part in hostilities.” And 

despite the proscription against causing harm to enemy 

armed forces, contractor personnel may carry weapons in

Jan. 2003 Mar. 2003 May 2003 July 2003 Sept. 2003 Nov. 2003 Jan. 2004 Mar. 2004 May 2004

0

50

100

150

200

250

300

350

400

Major Combat

Operations

12. A DoD memorandum defines spiral development as “An iterative 

process for developing a defined set of capabilities within one 

increment. This process provides the opportunity for interaction 

between the user, tester, and developer. In this process, the 

requirements are defined through experimentation and risk management, there is continuous feedback, and the user is provided 

the best possible capability within the increment.” See Memorandum from the Under Secretary of Defense (Acquisition, Technology, and Logistics) to the Secretaries of the Military Departments 

and others, “Evolutionary Acquisition and Spiral Development” 

(April 2002).

13. The regulations state that “Contractor personnel are not combatants and shall not undertake any role that would jeopardize their 

status. Contractor personnel shall not use force or otherwise 

directly participate in acts likely to cause actual harm to enemy 

armed forces.” (See 48 C.F.R. 252.225.)
58 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table 4-1.

Reported Reasons for Relying on System Contractors in Southwest Asia Table 4-1. Reported Reasons for Relying on System Contractors in Southwest Asia

Source: Congressional Budget Office based on information provided by Department of the Army.

Note: n.a. = not available.

a. The Southwest Asia theater includes Iraq, Kuwait, and Afghanistan.

b. Percentage measured cumulatively for all contractors deployed through January and February 2004, including those no longer 

in-theater.

c. Information is from January and February 2004.

d. Data are from calendar year 2003 (Patriot systems are no longer in-theater).

some instances, further clouding their status as noncombatants.

Whether or not they carry their own weapons, contractor 

personnel may be entitled to protection provided by the 

Army units that they are supporting.14 The program 

offices that CBO contacted generally agreed that system 

contractors needed some level of military protection, but 

they could not estimate how many soldiers had been assigned or what the funding had been for that purpose.

Although contractor personnel are not in the military 

chain of command, contractors “shall comply with orders, directives, and instructions issued by the Combatant 

Commander relating to force protection, security, health, 

safety, or relations and interactions with local nationals.” 

The military commander cannot directly control individNeed for Contractors as

Identified by Program Officesc

15 97 Contractors have expertise required on this 

complex system.

67 95 Brigade Support Battalion does not have

adequate resources to perform all 

maintenance tasks.

8 95 Contractors possess a higher level of technical 

knowledge and expertise; they also provide

continuity and access to proprietary data 

and test equipment.

10 71 System is fielded in small numbers, and it 

is complex.

51 63 Civilians and contractors have traditionally 

supported the system in the United States; 

not enough military personnel are available.

25 84 Contractors perform troubleshooting and

depot-level repair, which are essential in 

maintaining operational readiness.

n.a. Contractors are used only when the problem is 

System beyond the capability of active-duty personnel.

Chemical Reconnaissance

System

Patriot Missile Systemd

Army Battle Command 

Number of Contractors

"Vast majority"

Stryker Vehicle

Apache Helicopter

Fox Nuclear, Biological, and

Defense Communications

and Army Transmission

System

Percentage of

Contractors with

Military Experienceb

Abrams Tank

System

in Southwest Asia

as of January and

February 2004a

14. Ibid. According to the regulations, “The Combatant Commander 

will develop a security plan to provide protection, through military means, of Contractor personnel engaged in the theater of 

operations unless the terms of this contract place the responsibility 

with another party.” 
CHAPTER FOUR ADDITIONAL OPTIONS TO CHANGE THE PERSONNEL MIX 59

ual contractor employees, but the government contracting officer (at the behest of the military commander) can 

order any particular employee to be removed from the 

theater.15

Contractors who deploy overseas are subject to the Uniform Code of Military Justice if the Congress has declared war, and they may be subject to the UCMJ during 

an undeclared war if they are retired military personnel. 

Any contractor committing a felony outside of sovereign 

U.S. territory can be tried under the Military Extraterritorial Jurisdiction Act, but the law has seldom been invoked and has limited effect. Finally, contractors committing grave breaches of the Geneva Conventions can be 

tried under the War Crimes Act of 1996.

Relative Costs to the Government of Using System Contractors. CBO collected some data on the costs of deployed system contractors but did not conduct a detailed 

cost comparison for this option. PMs and PEOs often 

purchase system contractor support at a negotiated 

hourly rate. CBO estimated the hourly cost for the government to purchase the services of a notional contractor’s technical representative, including the elements of 

base salary and wages, benefits, pay premiums, overhead, 

and insurance. CBO did not make a comparable estimate 

for federal civilians, in part because the rates that contractors bill the government include components—such as 

depreciated capital, building lease payments, managerial 

overhead, and some insurance—that are not readily measured for federal workers.

The costs of using system contractors can vary widely depending on the expertise required, the system supported, 

the contractor’s responsibilities and cost structure, and 

other factors. According to data provided by PMs and the 

Defense Contract Audit Agency, the hourly rate (including benefits and overhead but excluding pay premiums 

and insurance associated with deployment) for a notional 

system contractor appears to range from $60 to $125. Of 

that amount, the base salaries and wages of system contractors range from $30 to $45 per hour, CBO estimates; 

the remaining portion of the hourly rate pays for benefits, 

overhead, and other administrative expenses.

Most of the federal civilians with similar skills who have 

deployed during Operation Iraqi Freedom have been in 

grades GS-11 through GS-13. The base salary of the 

lowest-step GS-11 in 2004 was $21 per hour, and the 

highest-step GS-13 earned $39 per hour. Although the 

base salaries of contractors’ technical representatives and 

federal civilians with equivalent skills are similar, a comprehensive analysis of the relative cost of the two labor 

types to the government would require an estimate of 

federal civilians’ fully burdened pay rates, including such 

elements as benefits, pay premiums, overhead, and insurance. Benefits and pay premiums could be estimated, but 

information is lacking on overhead costs (such as computers, office space, or a portion of supervisors’ salaries) 

associated with individual federal workers. And the federal government self-insures against workers’ compensation claims, meaning that funds would be made available 

to settle those claims when necessary but there is no fixed 

allocation of funds per federal worker.

The overseas deployment of system contractors introduces several additional cost elements that are not incurred in the United States and are not included in the 

range of costs indicated above. Contractor personnel 

working overseas—particularly those in dangerous locales—often receive pay premiums that augment their 

base salary. Those pay premiums usually approximate the 

foreign-post differential and danger-pay allowance set by 

the State Department for federal civilians working outside the United States but may also include additional 

negotiated pay increases. The Defense Base Act (DBA) 

requires that DoD contractors purchase workers’ compensation insurance for employees working overseas. 

(Other insurance costs are assumed to be included in 

overhead.) Traditionally, firms purchase their own DBA 

insurance coverage on the competitive market for each 

DoD contract. Current DBA insurance premiums in Iraq 

are about 10 percent to 20 percent of base salary.16 CBO 

estimates that combining pay premiums with DBA insurance for contractors deployed to Iraq or Kuwait results in 

a 40 percent to 100 percent surcharge to the base salary 

rate. 

Accounting for premiums and insurance, CBO estimates 

the fully burdened contractor rate in Iraq or Kuwait at 

between about $70 and $170 per hour. That estimate 15. Ibid. According to the regulations, “The Contracting Officer may 

direct the Contractor, at its own expense, to remove and replace 

any contractor personnel who jeopardize or interfere with mission 

accomplishment or who fail to comply with or violate any applicable requirements [of DoD contracting regulations].”

16. Government Accountability Office, Defense Base Act Insurance: 

Review Needed of Cost and Implementation Issues, GAO-05-280R 

(April 2005), p. 4.
60 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

does not include predeployment activities, transportation, force protection, or other miscellaneous costs. Although difficult to estimate, those costs are not unique to 

contractors. Such miscellaneous costs would be common 

among system contractors and other sources of labor, 

such as federal civilians.

Costs incurred during deployment may not be the dominant factor in evaluating this option. Most system maintenance occurs in the United States, not during overseas 

deployments. Thus, the life-cycle maintenance costs are 

largely determined by peacetime considerations. The decision of who maintains weapon systems during conflicts 

depends on who has been maintaining them during 

peacetime. That decision is generally determined by the 

Army’s broader acquisition strategy—including such factors as the time frame for fielding the system and the relative availability of skills—rather than by the relative cost 

of sending a limited number of people overseas to support deployed forces.

Option 4: Establish a New Type of 

Personnel—Sponsored Reserves

This option would create a new military employment category known as sponsored reserves. These individuals 

would work for U.S. defense contractors during peacetime but would also be members of the military reserves 

and would deploy as activated reservists during contingency operations. The concept stems from a similar 

approach already in use in Great Britain.

The British Experience 

In 1996, the British Parliament authorized the Ministry 

of Defense to institute a new form of reserve duty called 

sponsored reserves. The concept of sponsored reserves 

was established in British law as part of the Reserve 

Forces Act of 1996, which sought to increase the roles 

and missions of all reservists. The system allows contractor personnel performing peacetime operations to become activated reservists when they deploy overseas. The 

system is similar to the U.S. concept of dual-status civilians (also called military technicians) currently serving 

with Reserve and National Guard units. Those roughly 

70,000 federal workers serve as civilians while their unit 

is at home; but when the unit deploys overseas, they become reservists serving on active duty.

The British MoD has implemented five sponsored reserve 

projects.17 The first project established the “Mobile Met 

Unit,” which deploys to provide meteorological support 

to the Royal Air Force. That unit has been staffed with 

British government civilians since the 1960s, and those 

personnel were traditional reservists who volunteered to 

travel overseas to support the combat forces. Under the 

new arrangement, they can be activated more quickly and 

more easily, even in the absence of a broader general callup. Deployments for this unit started more than four 

years ago.

Unlike that first project, which involved British government civilians, the remaining projects all employ contractors. The second project uses sponsored reservists to crew 

six strategic sealift roll-on/roll-off vessels.18 Those ships 

operate as merchant ships during routine peacetime operations but provide maritime support during peacetime 

exercises and wartime operations. The contract civilian 

crew members become military officers and enlisted personnel upon activation.

The third project uses contractor personnel to provide 

ground support to British communications aircraft, the 

fourth project uses contractor personnel to drive and 

maintain a new generation of heavy equipment transporters, and the fifth project uses them to provide hydrographic systems engineers for a new generation of survey 

vessels.

The first three projects have already been used to support 

overseas operations. The first has been used for over four 

years, and the second and third have supported Operation Iraqi Freedom and Operation Enduring Freedom. 

The overall program is small, however: the five projects in 

total involve fewer than 350 sponsored reservists. The 

sealift project and the heavy equipment transport project 

are part of long-term service contracts (the sealift contract 

lasts 25 years) that allow the contractor to use those assets 

for commercial business at times when they are not 

needed by the British MoD.

In general, the British have used the concept of sponsored 

reserves as part of a new acquisition or program. (The 

exception is the meteorological support project.) The

17. Much of this information comes from Tom Allen, “Smart Acquisition and the Sponsored Reserves,” Defence Management Journal, 

no. 23 (November 2003), pp. 40-42.

18. Roll-on/roll-off vessels are ships designed to carry vehicles, which 

can be rolled on at the port of embarkation and rolled off at the 

destination.
CHAPTER FOUR ADDITIONAL OPTIONS TO CHANGE THE PERSONNEL MIX 61

Table 4-2.

Estimated Savings from Sponsored Reserve Option

(Millions of dollars)

Table 4-2. Estimated Savings from Sponsored Reserve Option

Source: Congressional Budget Office.

program offers several advantages. Training can be customized on a case-by-case basis depending on the type of 

military service and the operational environment in 

which the required support is likely to be delivered. Mandatory retirement age from reserve service can be applied 

flexibly, as well. Moreover, the British government can 

activate sponsored reservists more easily than traditional 

reservists, and call-up is not dependent on any particular 

degree of crisis.

Nevertheless, sponsored reservists are members of an 

existing reserve force and subject to service regulations. 

They are under military command and subject to the 

British equivalent of the UCMJ. The MoD can set military training requirements and standards. The MoD also 

can prevent individuals from quitting their jobs, if necessary. Sponsored reservists can also be required to undertake other duties, such as guard duties. That sort of flexibility is sometimes lacking in regular contracts.

A Possible U.S. Variant 

A sponsored-reserve program in the United States, which 

would probably require legislation to establish, might 

consist of a contract (or contracts) for the delivery of services or equipment that included a provision in which the 

contractor agreed to maintain a specified portion of its 

workforce as members of the Individual Ready Reserve 

(IRR). Reservists in the IRR do not participate in regularly scheduled training with reserve units (one weekend 

per month and an additional two-week period every 

year), but under this concept would have to remain proficient in their military specialty through a combination of 

their routine work as contractors and, if necessary, additional periodic training. A sponsored reservist would act 

as a contract employee during peacetime but would agree 

to be “activated” to military status when deploying to 

perform the same job overseas. Currently, many contractors also serve as reservists; but when they deploy as military personnel, they do different jobs or work with different units than their peacetime contract function. Under 

the sponsored-reserve concept, the contractor would perform the same job with the same unit but would act as a 

member of the military when deployed.19

This option would institute a new program of sponsored 

reservists as a means of attracting and retaining highquality skilled individuals, particularly in those functions 

that now rely extensively on contractors. To achieve the 

savings shown in Table 4-2, the option would reduce the 

total number of active-duty personnel performing logistics, installation or facility management, and physical security functions by 20 percent. That change would be 

implemented over a four-year phase-in period. Some of 

the 20,000 affected personnel are currently deployed to 

the Iraqi or Afghan theaters, and some (presumably 

smaller) number might remain deployed throughout the 

phase-in period of the option. The effect of the option on 

forces in-theater would be to replace the deployed subset 

of the 20,000 active-duty personnel with activated sponsored reservists.

CBO views Options 1 and 4 as mutually exclusive alternatives, because some of the logistics functions that Option 4 would transfer from active-duty personnel to the 

new sponsored reservists are the same functions that Option 1 would transfer from the LOGCAP contractor to 

uniformed military personnel (including active-duty soldiers as well as traditional reservists).20

2007 2008 2009 2010 2011

Savings

Budget authority 200 410 640 880 910 3,040 8,070

Outlays 190 400 630 870 910 3,000 8,020

2007 to 2011 2007 to 2016

Total

19. This option (number 050-33) was outlined in Congressional Budget Office, Budget Options (February 2005), pp. 60-61.

20. Among the common functions are troop subsistence, food supply, 

traffic and transportation management, fire prevention and protection, laundry and dry cleaning operations, electrical plant and 

distribution systems, and water plant and distribution systems.
62 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Successfully converting 20,000 positions—and reducing 

active-duty end strength by that amount—could save 

about $3 billion from 2007 through 2011. Some of the 

savings from this option would occur because sponsored 

reservists would have military-specific responsibilities 

only when they deployed. Thus, when not deployed, they 

would have more time available to perform their jobs, so 

fewer of them would be needed to substitute for a given 

number of military personnel.

This option would achieve some benefits of wholly privatized functions performed by contractors as well as those 

of functions performed by the military. It would place deployed contractors within the military chain of command, better ensuring military command and control, 

and would afford them the protections of military status. 

In particular, the conduct of sponsored reservists would 

be addressed by the Geneva Conventions and the UCMJ. 

Another advantage is that sponsored reservists could provide military capability in occupations that are hard to fill 

with military personnel or jobs that require cutting-edge 

technical expertise. As members of the IRR, those personnel would not count against legislated end-strength caps.

Converting active-duty positions to sponsored-reserve 

positions could create some difficulties, however. Although DoD is considering creating a sponsored-reserve 

program, implementation details have not been widely 

discussed. As a first step, a few demonstration projects 

could be preferable to the creation of a new personnel 

category. There might also be a concern about having 

personnel in uniform who had not received the same level 

of training and leadership development opportunities as 

current military service members.

The savings shown in Table 4-2 assume that the activeduty personnel replaced by sponsored reservists would be 

removed from the military’s end strength. If that was not 

the case, the replaced military personnel would be freed 

up to perform other functions, but the savings would be 

smaller. The realized savings would depend on a more detailed specification of the disposition of the replaced military personnel. 
A

Assessing the Army’s Capability to

Replace Task Order 59 with Army Logistics Units Appendix A: Assessing the Army’s Capability to Replace Task Order 59 with Army Logistics Units

In order to assess the Army’s ability to carry out the 

logistics support functions specified in Task Order 59, 

the Congressional Budget Office (CBO) considered a 

variety of criteria, including the number and type of units 

that would be required and the availability of those units 

in the Army’s current force structure.

Determining Equivalent Army Units

To begin the process of identifying Army units that could 

provide the same level and quality of work provided by 

the current Logistics Civil Augmentation Program 

(LOGCAP) contractor, it was necessary first to understand the exact nature of the required tasks. The statement of work for Task Order 59 spells out, in detail, the 

specific tasks to be accomplished, including the number 

of Army units that require logistics support, the units’ 

populations and locations in-theater, and the projected 

starting and ending dates for each discrete function.

Some 34 percent of deployable Army personnel are in 

combat-service-support occupations, and an additional 

24 percent are in combat support (see Table 1-4 on 

page 17). That organic support includes most of the services purchased from the LOGCAP contractor. To determine the size and composition of an Army force package 

that would be necessary to completely replace the contractor, CBO followed the procedure outlined below:

B Matched the mission statements of existing Army unit 

types with each function or service outlined in Task 

Order 59.

B Calculated the number of Army units that would be 

needed to carry out the tasks now performed by the 

LOGCAP contractor. The ratio of that number to the 

total number of units available, together with constraints on deployment frequency, indicated the 

Army’s flexibility to replace the contractor in fulfilling 

the task order. If few units were needed relative to the 

total number of units available in the Army’s force 

structure, the necessary units could be assigned to logistics support and still leave sufficient units in the 

United States to rotate into the theater and provide relief. However, if the required number of units was 

large relative to the total force structure, it might be 

necessary to create new units to maintain the requisite 

rotation base. 

B Determined how many units of each logistics unit 

type currently exist in the Army’s force structure and 

where those units are located, including ongoing operations to which they may already be committed. That 

process generated the number of units in the Army 

force structure that would be available for providing 

logistics support.

Matching Army Units to Tasks

CBO identified appropriate Army unit types (for instance, the quartermaster field service company) by comparing the statement of work for Task Order 59 and unit 

mission descriptions. CBO obtained detailed information 

about the missions, capabilities, employment, and manning of Army units from an online database called 

WebTAADS, which is maintained by the U.S. Army 

Force Management Support Agency. CBO then identified and matched units at the Standard Requirements 

APPENDIX
64 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Code (SRC) level to specific tasks described in Task 

Order 59.1

The number of units needed to perform the tasks spelled 

out in Task Order 59 depends on the workload required 

for each task. The statement of work explicitly details the 

expected output for certain tasks: for example, provision 

and maintenance of latrines, showers, and laundry services to meet the needs of base-camp populations. In 

other cases, that statement stipulates the capacity required of the contractor: for example, “the contractor 

shall be capable of receiving, transporting, and unloading 

up to 250 [cargo] pallets per day.” Using those requirements, it is possible to determine the number of Army 

units that would be needed to perform specific tasks. 

CBO considered the following factors to determine the 

number of units needed:

B Allocation rules based on the number of troops served. 

The number of Army units needed to provide latrines, 

showers, and laundry services would be based on the 

ratio of the population served to the capacity of each 

unit. For example, allocation rules call for one quartermaster field service company to provide latrines, and a 

second company to provide showers and laundry services, per 21,000 troops served. The 130,000 troops 

in Iraq are located in six major clusters. Each cluster 

would require two quartermaster field service companies, or a total of 12 such units to replace the 

LOGCAP contractor in providing these services.

B Comparison of units’ capabilities with the capacity 

required of the contractor. When the contractor is 

required to process up to 250 cargo pallets per day, 

one Army unit of the type allocated to the task (in this 

case, a transportation cargo transfer company) would 

have at least that much capability.

B Comparison of units’ equipment to that utilized by the 

contractor. In situations where measures of output 

(such as the numbers of troops served or the amounts 

of cargo processed) were unavailable, CBO attempted 

instead to match the amount and type of equipment 

utilized by the LOGCAP contractor. For example, 

CBO estimates that during the period covered by the 

analysis, the contractor provided and operated powergenerating equipment in the theater with a combined 

capacity of about 400 megawatts. On the basis of the 

capacity of Army power-generating units, CBO concluded that about 10 Army prime power engineering 

battalions would be needed to provide the same 

amount of power. CBO used a similar process to 

determine the number of Army transportation units 

that would be needed to fulfill the transportation mission in-theater.

B Ratio of logistics support units to supported combat units 

in past deployments or scenarios in notional deployment 

plans. CBO used this approach when the basis for allocating units to troops was not specified in unit documents or when the “capacity” approach was not 

applicable or straightforward. Some equipment maintenance units fall into this category. Here, past experience helped guide the method used to allocate units to 

tasks. CBO examined the composition of forces deployed—that is, the ratio of support units to combat 

forces—in past contingencies or in notional deployment plans. For example, one support unit of a certain 

type might be allocated per division. 

In determining the number of Army units that would be 

required to provide logistics support, CBO assumed that 

Army units would provide those services in the same 

manner as the contractor, even when that approach was 

at odds with formal Army doctrine. For example, if the 

contract required the contractor to produce water in several different locations, CBO’s approach would have 

Army units produce water at those same locations, even 

though water production would be more centralized, 

according to Army doctrine. CBO used this approach to 

best reflect the realities of the current Iraqi conflict.

Finally, CBO also considered the geographic dispersal of 

the troops supported. The base-camp sites, with varying 

numbers of resident troops, are dispersed throughout 

western, central, and northern Iraq. In most cases, CBO 

allocated support units so that each site had a dedicated 

unit, rather than forcing a single unit to service multiple 

1. The SRC is a coding taxonomy that the Army uses to designate a 

unit and a particular version of its Table of Organization and 

Equipment. The Army uses the WebTAADS online database to 

manage its units’ personnel, equipment, and command structure 

(which units are subordinate to which other units) at a fine level 

of detail. The units are listed in WebTAADS by SRC. The SRCs 

germane to this analysis vary in size from platoons of four soldiers 

to battalions of up to 657 soldiers. Note that those support units 

are organized differently from infantry units: the latter tend to be 

larger. Also note that a few support units are modular, meaning 

that their size can be tailored to meet specific needs.
APPENDIX A ASSESSING THE ARMY’S CAPABILITY TO REPLACE TASK ORDER 59 WITH ARMY LOGISTICS UNITS 65

sites. Thus, CBO allocated whole units to sites despite 

their having fewer resident troops than the support unit’s 

capacity in some instances. That approach tended to increase the total number of units allocated to the task

order.2

Table 3-1 on page 29 presents the Army force package 

and associated numbers of troops determined using this 

process. In addition to the units that actually perform the 

work, the table includes headquarters units for command 

and control.

Assessing the Availability of Army Units

After determining the size and composition of the Army 

force package required to perform the logistics tasks, the 

next step was to verify whether the Army had sufficient 

forces to do that work and still meet other commitments—including the need to maintain a rotation base. 

The Army has goals that limit the frequency and length 

of time that units may be deployed, and the Army provides for a rotation base consisting of units that must 

rotate from the United States to replace those units currently deployed. CBO’s analysis considered not only 

whether the units were available outright but also took 

into account whether additional units would have to be 

added to the force structure to maintain the Army’s rotation base.

CBO concluded that the Army would not be able to provide all of the functions detailed in Task Order 59 without creating additional units and would, in fact, need to 

create many more units in order to meet its rotation 

goals. As summarized in Chapter 3 of the main text, the 

Army currently has 950 units with 112,435 troops of the 

types that perform the functions in Task Order 59. (See 

Table 3-2 on page 30.) Table A-1 provides additional 

detail, decomposing the 950 units into the 38 distinct 

unit types or SRCs. In total, the Army would need only 

177 units—a total of 12,067 troops—to provide the 

functions specified in Task Order 59. However, while the 

950 existing units would provide more than the required 

capability for some functions, they would provide less 

than the required capability for others. Moreover, many 

of those units are already deployed to South Korea, Iraq, 

or Afghanistan, and would not be available to replace the 

contractor in Iraq. In order to fill in the gaps in capability, 

and to provide an adequate rotation base, the Army 

would need to create additional units.

Almost one-quarter of the units identified by CBO were 

already deployed to South Korea, Iraq, or Afghanistan 

during the period of performance for Task Order 59.3

CBO assumed that those 222 deployed units—consisting 

of a total of 29,128 troops—would not be available to 

perform the functions in Task Order 59. Additionally, the 

troops in Iraq and Afghanistan would require a rotation 

base if logistics support was to be continuously provided 

over the long run.4

 The Army’s goal for deployment frequency is 20 percent to 33 percent for active units.5 This 

means that, at any one time, only one-fifth to one-third 

of active units are deployed. For reserve units, the goal is 

to limit call-ups to 17 percent of the time, or one year out 

of six. However, a one-year deployment would most 

likely be immediately preceded by a three-month unit 

training period. Thus, reserve units can be deployed only 

13 percent of the time, or one year out of every 7.5 years. 

CBO assumed that the Army would meet these goals 

when possible, so that each deployed active unit would 

require at least two nondeployed units as a rotation base, 

and each deployed reserve unit would require at least 6.5 

nondeployed units.6

There are two cases to consider when constructing the 

required rotation base for currently deployed units (those

2. The few exceptions to this rule are modular units whose constituent parts are fully capable of independent operation. The platoons 

in a prime power company are an example of this type of unit. 

3. Data were provided to the Congressional Budget Office by the 

Department of Defense, December 2004. 

4. Unit rotation is different from the individual-rotation policy now 

used in South Korea (and employed during World War II, the 

Korean War, and the Vietnam War). Individual rotation maintains 

the same unit in-theater over time but moves individual soldiers 

into and out of the unit. Thus, Army units stationed in South 

Korea do not require rotational counterparts in the United States.

5. Congressional Budget Office, An Analysis of the U.S. Military’s 

Ability to Sustain an Occupation in Iraq (September 3, 2003), 

pp. 34-39.

6. In cases where the Army requires an even number of reserve units 

to perform services described in a given SRC, the number of units 

allocated for rotation equals that number times the factor 6.5, 

yielding a whole number. For example, two reserve units would 

require 13 rotational units. In cases where the Army requires an 

odd number of reserve units, CBO rounded up the rotational 

units to the next whole number. For example, three reserve units 

would require 20 rotational units (rounded up from 3 x 6.5 = 19.5 

units).
66 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table A-1.

Total Authorized Units and Troops of Relevant Types

Table A-1. Total Authorized Units and Troops of Relevant Types

Source: Congressional Budget Office.

Note: HHC = headquarters and headquarters company; HHD = headquarters and headquarters detachment.

0 0 2 120 2 120

2 230 2 230 4 460

4 124 3 93 7 217

0 0 1 65 1 65

4 252 5 315 9 567

0 0 12 624 12 624

5 245 18 882 23 1,127

2 114 22 1,254 24 1,368

1 101 1 101 2 202

1 75 0 0 1 75

16 704 31 1,364 47 2,068

19 304 22 352 41 656

8 88 57 627 65 715

9 2,520 6 1,680 15 4,200

8 2,392 37 11,063 45 13,455

10 100 8 80 18 180

41 902 12 264 53 1,166

6 738 16 1,968 22 2,706

11 77 39 273 50 350

1 4 10 40 11 44

0 0 5 175 5 175

9 5,913 33 21,681 42 27,594

0 0 3 570 3 570

1 30 1 30 2 60

1 174 24 4,176 25 4,350

8 1,352 61 10,309 69 11,661

4 680 18 3,060 22 3,740

9 252 46 1,288 55 1,540

26 5,200 65 13,000 91 18,200

2 372 14 2,604 16 2,976

25 525 18 378 43 903

8 80 17 170 25 250

3 774 0 0 3 774

0 0 2 108 2 108

2 114 0 0 2 114

10 1,250 33 4,125 43 5,375

1 56 38 2,128 39 2,184

2 272 9 1,224 11 1,496

259 26,014 691 86,421 950 112,435

Active Reserve and Guard Total Authorized

Units Troops

Command-and-Control Functions

HHC Air Traffic Services Battalion

Unit Type Units Troops Units Troops

HHC Engineer Brigade

HHD Explosive Ordnance Disposal Battalion

HHD Medical Logistics Battalion

HHD Movement Control Battalion

HHD Ordnance Battalion (Ammunition)

HHD Ordnance Maintenance Battalion

HHD Supply and Service Battalion

Logistics Functions

Air Traffic Services Company

Air Traffic Support Maintenance Company

Ammunition Ordnance Heavy Lift Platoon

Area Movement Control Team

Cargo Documentation Movement Control Team

Cargo Transfer Company

Combat Heavy Equipment Transport Company

Division Support Movement Control Team

Explosive Ordnance Disposal Company

Field Service Company

Fire Fighting Team

Fire Fighting Team Headquarters

Force Provider Company

Heavy Engineer Combat Battalion

Heavy Material Supply Company

Medical Detachment (Blood support)

Medium Truck Company (20 ft.)

Medium Truck Company (40 ft.)

Medium Truck Company (5,000 gal.)

Movement Control Regulating Team

Nondivisional Ordnance Maintenance Company

Petroleum Pipeline and Terminal Company

Port Movement Control Team

Preventive Medicine (Sanitation) Detachment

Prime Power Engineer Battalion

Repair Parts Team

Subsistence Platoon

Supply Company

Utilities Team Engineer Detachment

Water Purification and Distribution Company

Total

All Functions
APPENDIX A ASSESSING THE ARMY’S CAPABILITY TO REPLACE TASK ORDER 59 WITH ARMY LOGISTICS UNITS 67

units not available to perform logistics support functions). First, for those SRCs that are currently meeting 

their rotation goals, CBO removed from the available 

pool both the units currently deployed to South Korea, 

Iraq, or Afghanistan, and the rotational units for the latter two operations. However, the Army is currently 

exceeding its rotation goals in Iraq and Afghanistan for 

16 of the 38 relevant SRCs.7 CBO assumed that the 

Army would continue to exceed its rotation goals for 

those SRCs rather than create additional units for the sole 

purpose of bringing currently deployed units within the 

goals. Thus, CBO did not charge any cost for expanding 

the rotation base for currently deployed units.

The distribution of available troops by function did not 

match the distribution of required functions. Because 

there are more troops than needed for some functions 

and too few for others, CBO displayed the existing units 

that matched the required SRCs and computed the shortfalls. CBO determined that, in combination, 39 active 

units and 65 reserve units could provide 104 of the 177 

required units (see Table 3-2 on page 30). The remaining 

73 units needed to perform the functions in Task Order 

59 would have to be created. When new units needed to 

be created, CBO calculated those in a manner that preserved (as closely as possible) the current proportions of 

active and reserve units within each SRC. For example, 

SRC 01426A0 (air traffic services battalion headquarters) 

has two authorized reserve units that are both currently 

deployed and unavailable. Task Order 59 requires one 

unit of this type, so CBO assumed that the Army would 

create one additional reserve unit (see Table A-2).

Meeting the Rotation Goal

Some SRCs would have units available to use as a rotation base for the units providing the logistics support detailed in Task Order 59, but many others would not. Filling the functions in the task order continuously over a 

long period—while also participating in the other missions to which those units are already assigned in South 

Korea, Iraq, and Afghanistan—would exceed the Army’s 

rotation goal for 32 of the 38 relevant SRCs. Because the 

most austere rotation goal is 13 percent for reserve units, 

the Army would need 6.5 nondeployed units and one deployed unit (a total of 7.5 reserve units) for every reserve 

unit required to perform the function. Similarly, the most 

austere rotation goal is 33 percent for active units; thus, 

the Army would need two nondeployed units and one deployed unit (a total of three active units) for every active 

unit needed to perform the function.

For the 177 deployed units providing logistics support—

63 active units and 114 reserve units—the minimum 

rotation base would require that the Army use two nondeployed units for each active unit and 6.5 nondeployed 

units for each reserve unit (see Table 3-3 on page 34). 

That would require 126 nondeployed active units and 

749 nondeployed reserve units (the latter figure incorporates rounding up to whole units for eight SRCs).

Satisfying the rotation goals in that fashion would require 

creating an additional 794 units (101 active and 693 reserve units) with 41,560 troops to serve as a rotation base 

(see Table A-3). The Army would continue to deploy 

more frequently than its goal for those SRCs where that is 

currently the case. CBO assumed that the Army would 

not create additional units to bring currently deployed 

units within the stated rotation goals. 

7. Another 13 SRCs have no units currently deployed, indicating 

that the Army has chosen to use contractors in-theater rather than 

existing military capability.
68 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table A-2.

Breakdown of Units Required to Perform Functions in Task Order 59

Table A-2. Breakdown of Units Required to Perform Functions in Task Order 59

Continued

0 0 0 0 00

1 115 0 0 1 115

0 0 1 31 1 31

0 0 1 65 1 65

1 63 0 0 1 63

0 0 1 52 1 52

0 0 1 49 1 49

2 114 0 0 2 114

0 0 1 101 1 101

1 75 0 0 1 75

1 44 2 88 3 132

1 16 0 0 1 16

1 11 0 0 1 11

0 0 0 0 00

0 0 0 0 00

1 10 0 0 1 10

0 0 10 220 10 220

0 0 1 123 1 123

11 77 9 63 20 140

1 4 7 28 8 32

0 0 5 175 5 175

2 1,314 0 0 2 1,314

0 0 1 190 1 190

1 30 1 30 2 60

0 0 2 348 2 348

0 0 0 0 00

1 170 0 0 1 170

1 28 0 0 1 28

4 800 0 0 4 800

0 0 0 0 00

1 21 0 0 1 21

2 20 13 130 15 150

3 774 0 0 3 774

0 0 2 108 2 108

2 114 0 0 2 114

0 0 0 0 00

0 0 6 336 6 336

1 136 1 136 2 272

Total 39 3,936 65 2,273 104 6,209

HHD Explosive Ordnance Disposal Battalion

HHD Supply and Service Battalion

Air Traffic Services Company

HHD Medical Logistics Battalion

HHD Movement Control Battalion

HHD Ordnance Battalion (Ammunition)

HHD Ordnance Maintenance Battalion

Unit Type

HHC Air Traffic Services Battalion

HHC Engineer Brigade

Units Units Troops Troops

Active Reserve and Guard

Air Traffic Support Maintenance Company

Ammunition Ordnance Heavy Lift Platoon

Area Movement Control Team

Cargo Documentation Movement Control Team

Cargo Transfer Company

Combat Heavy Equipment Transport Company

Division Support Movement Control Team

Explosive Ordnance Disposal Company

Field Service Company

Fire Fighting Team

Fire Fighting Team Headquarters

Force Provider Company

Heavy Engineer Combat Battalion

Heavy Material Supply Company

Medical Detachment (Blood support)

Medium Truck Company (20 ft.)

Medium Truck Company (40 ft.)

Medium Truck Company (5,000 gal.)

Movement Control Regulating Team

Subsistence Platoon

Supply Company

Utilities Team Engineer Detachment

Nondivisional Ordnance Maintenance Company

Petroleum Pipeline and Terminal Company

Port Movement Control Team

Preventive Medicine (Sanitation) Detachment

All Functions

Existing Units

Total

Prime Power Engineer Battalion

Water Purification and Distribution Company

Units Troops

Command-and-Control Functions

Logistics Functions

Repair Parts Team
APPENDIX A ASSESSING THE ARMY’S CAPABILITY TO REPLACE TASK ORDER 59 WITH ARMY LOGISTICS UNITS 69

Table A-2.

Continued

Continued

0 0 1 60 1 60

0 0 0 0 00

0 0 0 0 00

0 0 0 0 00

0 0 0 0 00

0 0 0 0 00

0 0 0 0 00

0 0 1 57 1 57

0 0 0 0 00

0 0 0 0 00

0 0 0 0 00

0 0 0 0 00

0 0 0 0 00

1 280 0 0 1 280

0 0 1 299 1 299

0 0 0 0 00

0 0 0 0 00

3 369 8 984 11 1,353

6 42 22 154 28 196

0 0 0 0 00

0 0 5 175 5 175

0 0 0 0 00

0 0 0 0 00

1 30 2 60 3 90

0 0 0 0 00

0 0 2 338 2 338

0 0 0 0 00

0 0 0 0 00

0 0 0 0 00

0 0 1 186 1 186

0 0 0 0 00

0 0 0 0 00

7 1,806 0 0 7 1,806

0 0 2 108 2 108

5 285 0 0 5 285

1 125 4 500 5 625

0 0 0 0 00

0 0 0 0 00

24 2,937 49 2,921 73 5,858

Active Total Reserve and Guard

All Functions

Air Traffic Services Company

HHD Explosive Ordnance Disposal Battalion

HHD Medical Logistics Battalion

HHD Movement Control Battalion

HHD Ordnance Battalion (Ammunition)

Air Traffic Support Maintenance Company

Ammunition Ordnance Heavy Lift Platoon

Area Movement Control Team

Cargo Documentation Movement Control Team

Cargo Transfer Company

Combat Heavy Equipment Transport Company

Division Support Movement Control Team

Explosive Ordnance Disposal Company

Field Service Company

Fire Fighting Team

Fire Fighting Team Headquarters

Force Provider Company

Heavy Engineer Combat Battalion

Subsistence Platoon

Heavy Material Supply Company

Medical Detachment (Blood support)

Medium Truck Company (20 ft.)

Medium Truck Company (40 ft.)

Port Movement Control Team

Preventive Medicine (Sanitation) Detachment

Prime Power Engineer Battalion

Medium Truck Company (5,000 gal.)

Movement Control Regulating Team

Nondivisional Ordnance Maintenance Company

Units

Repair Parts Team

Total

Water Purification and Distribution Company

Units Troops Units

Supply Company

Utilities Team Engineer Detachment

Petroleum Pipeline and Terminal Company

Troops

Command-and-Control Functions

New Units

Logistics Functions

HHD Ordnance Maintenance Battalion

HHD Supply and Service Battalion

Unit Type

HHC Air Traffic Services Battalion

HHC Engineer Brigade

Troops
70 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table A-2.

Continued

Source: Congressional Budget Office.

Note: HHC = headquarters and headquarters company; HHD = headquarters and headquarters detachment.

0 0 1 60 1 60

1 115 0 0 1 115

0 0 1 31 1 31

0 0 1 65 1 65

1 63 0 0 1 63

0 0 1 52 1 52

0 0 1 49 1 49

2 114 1 57 3 171

0 0 1 101 1 101

1 75 0 0 1 75

1 44 2 88 3 132

1 16 0 0 1 16

1 11 0 0 1 11

1 280 0 0 1 280

0 0 1 299 1 299

1 10 0 0 1 10

0 0 10 220 10 220

3 369 9 1,107 12 1,476

17 119 31 217 48 336

1 4 7 28 8 32

0 0 10 350 10 350

2 1,314 0 0 2 1,314

0 0 1 190 1 190

2 60 3 90 5 150

0 0 2 348 2 348

0 0 2 338 2 338

1 170 0 0 1 170

1 28 0 0 1 28

4 800 0 0 4 800

0 0 1 186 1 186

1 21 0 0 1 21

2 20 13 130 15 150

10 2,580 0 0 10 2,580

0 0 4 216 4 216

7 399 0 0 7 399

1 125 4 500 5 625

0 0 6 336 6 336

1 136 1 136 2 272

63 6,873 114 5,194 177 12,067

All Functions

Total

Total Units

Active Reserve and Guard Total

Water Purification and Distribution Company

Units Troops Units

Repair Parts Team

Subsistence Platoon

Supply Company

Utilities Team Engineer Detachment

Petroleum Pipeline and Terminal Company

Port Movement Control Team

Preventive Medicine (Sanitation) Detachment

Prime Power Engineer Battalion

Medium Truck Company (40 ft.)

Medium Truck Company (5,000 gal.)

Movement Control Regulating Team

Nondivisional Ordnance Maintenance Company

Heavy Engineer Combat Battalion

Heavy Material Supply Company

Medical Detachment (Blood support)

Medium Truck Company (20 ft.)

Field Service Company

Fire Fighting Team

Fire Fighting Team Headquarters

Force Provider Company

Cargo Transfer Company

Combat Heavy Equipment Transport Company

Division Support Movement Control Team

Explosive Ordnance Disposal Company

Air Traffic Support Maintenance Company

Ammunition Ordnance Heavy Lift Platoon

Area Movement Control Team

Cargo Documentation Movement Control Team

HHD Ordnance Maintenance Battalion

HHD Supply and Service Battalion

Air Traffic Services Company

Logistics Functions

HHD Explosive Ordnance Disposal Battalion

HHD Medical Logistics Battalion

HHD Movement Control Battalion

HHD Ordnance Battalion (Ammunition)

Unit Type

HHC Air Traffic Services Battalion

HHC Engineer Brigade

Command-and-Control Functions

Troops Units Troops
APPENDIX A ASSESSING THE ARMY’S CAPABILITY TO REPLACE TASK ORDER 59 WITH ARMY LOGISTICS UNITS 71

Table A-3.

Breakdown of New Units Required for a Rotation Base

Table A-3. Breakdown of New Units Required for a Rotation Base

Source: Congressional Budget Office.

Note: HHC = headquarters and headquarters company; HHD = headquarters and headquarters detachment.

Troops Units Troops Units Troops

0 0 7 420 7 420

1 115 0 0 1 115

0 0 5 155 5 155

0 0 7 455 7 455

2 126 0 0 2 126

0 00 0 0 0

0 00 0 0 0

4 228 7 399 11 627

0 0 7 707 7 707

2 150 0 0 2 150

0 00 0 0 0

0 00 0 0 0

0 00 0 0 0

2 560 0 0 2 560

0 0 7 2,093 7 2,093

0 00 0 0 0

0 0 63 1,386 63 1,386

6 738 59 7,257 65 7,995

34 238 202 1,414 236 1,652

2 8 43 172 45 180

0 0 65 2,275 65 2,275

3 1,971 0 0 3 1,971

0 0 5 950 5 950

4 120 20 600 24 720

0 0 6 1,044 6 1,044

0 0 13 2,197 13 2,197

0 00 0 0 0

0 00 0 0 0

0 00 0 0 0

0 0 7 1,302 7 1,302

0 00 0 0 0

4 40 81 810 85 850

20 5,160 0 0 20 5,160

0 0 26 1,404 26 1,404

14 798 0 0 14 798

2 250 26 3,250 28 3,500

0 0 30 1,680 30 1,680

1 136 7 952 8 1,088

101 10,638 693 30,922 794 41,560

Active Reserve and Guard Total

HHD Ordnance Battalion (Ammunition)

HHD Ordnance Maintenance Battalion

HHD Supply and Service Battalion

Air Traffic Services Company

Air Traffic Support Maintenance Company

Command-and-Control Functions

Logistics Functions

Unit Type

HHC Air Traffic Services Battalion

HHC Engineer Brigade

HHD Explosive Ordnance Disposal Battalion

HHD Medical Logistics Battalion

HHD Movement Control Battalion

Ammunition Ordnance Heavy Lift Platoon

Area Movement Control Team

Cargo Documentation Movement Control Team

Cargo Transfer Company

Combat Heavy Equipment Transport Company

Division Support Movement Control Team

Explosive Ordnance Disposal Company

Field Service Company

Fire Fighting Team

Fire Fighting Team Headquarters

Force Provider Company

Heavy Engineer Combat Battalion

Heavy Material Supply Company

Medical Detachment (Blood support)

Medium Truck Company (20 ft.)

Medium Truck Company (40 ft.)

Repair Parts Team

Medium Truck Company (5,000 gal.)

Movement Control Regulating Team

Nondivisional Ordnance Maintenance Company

Petroleum Pipeline and Terminal Company

Units

All Functions

Total

Subsistence Platoon

Supply Company

Utilities Team Engineer Detachment

Water Purification and Distribution Company

Port Movement Control Team

Preventive Medicine (Sanitation) Detachment

Prime Power Engineer Battalion

B

Sample Calculations to Determine the Required 

Number of Army Field Service Companies Appendix B: Sample Calculations to Determine the Required Number of Army Field Service Companies

One function provided under the statement of 

work for Task Order 59 is that of field services, which includes the provision of latrines, showers, and laundry services to 130,000 troops. The Congressional Budget Office (CBO) determined that if the Army were to assume 

responsibility for those services, the correct type of unit to 

provide them would be the field service company.1

 The 

purpose of this appendix is to illustrate CBO’s methodology for calculating the required number of Army support 

units, by applying that methodology to the case of field 

service companies.

The Army’s allocation rules call for one field service company per 21,000 troops served. The 130,000 troops in 

Iraq are located in six major clusters containing an average of just over 21,000 troops each, but with some variation among the clusters. On that basis alone, a few of the 

six clusters would require two field service companies 

apiece. Moreover, a single field service company would 

have difficulty providing all of the functions (latrines, 

showers, and laundry services) even to a population of 

exactly 21,000 troops. Thus, CBO assigned two field service companies to each of the six clusters, allowing the 

two companies at each cluster to divide the workload 

across functional lines (for example, one of the companies 

might maintain the latrines and showers while the other 

company would provide laundry services). In total, the 

Army would require 12 field service companies—a total 

of 1,476 troops—to replace the Logistics Civil Augmentation Program (LOGCAP) contractor in providing those 

services.

Availability of Army Units

The Army has currently authorized six active and 16 reserve field service companies. One of the active units is in 

South Korea and not available to support Operation Iraqi 

Freedom (OIF). Two active and two reserve units are 

already supporting OIF. The Army’s rotation goals stipulate that each active unit should deploy no more than 33 

percent of the time, which means that the two active 

units participating in OIF require a rotation base of four 

nondeployed units.2 But only three such units are available (six units authorized minus one unit in South Korea 

minus two units in Iraq), so the rotation goal is not being 

achieved for active field service companies. As a result, 

the Army does not have a source of existing active units 

to provide the field service function in Task Order 59.

Creating Units to Perform the Field Service Function

The Army’s rotation goals require that each reserve unit 

mobilize only 13 percent of the time, so the two reserve 

field service companies already in Iraq would need a nondeployed rotation base of 13 reserve units. Removing 

those 15 units from the total of 16 reserve field service 

companies authorized in the Army leaves only one reserve 

APPENDIX

1. The Army identifies its unit types with a taxonomy known as the 

Standard Requirements Code (SRC). Field service companies are 

identified as SRC 10414L000.

2. The Army maintains a rotation base in the United States where 

soldiers can recover from overseas deployments, spending more 

time in training and with their families. The Army’s goal is that, at 

any given time, no more than one-third of active units should be 

deployed, while the remaining active units reside in the rotation 

base. Thus, for each active unit that the Army assigns to perform a 

function (such as field services), the Army must either identify in 

its existing force structure or create two additional units to serve as 

the rotation base. Similarly, the Army’s goal is that no more than 

13 percent of reserve units should be mobilized at any given time. 

Thus, for each reserve unit mobilized to perform a function, the 

Army must identify or create a total of 6.5 reserve units as a rotation base (so that one reserve unit, or 13 percent, is mobilized at 

any one time from a total of 7.5 units). 
74 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

unit to provide the field service function in Task Order 

59. Because a total of 12 units would be needed to provide the field service function, the Army would have to 

create 11 additional units. CBO assumed that the Army 

would create three active units and eight reserve units, 

thereby keeping the authorized active/reserve mix as close 

as possible to the current level. (The old mix was six 

active units to 16 reserve units, and the new mix would 

be nine active units to 24 reserve units.)

Creating Units to Serve as a Rotation Base

In total, the Army would need three active field service 

companies (all new) and nine reserve field service companies (one existing and eight new) to perform the entire 

field service function currently included in Task Order 

59. CBO’s calculations were based on the assumptions 

that active units would rotate to relieve active units and 

that reserve units would relieve reserve units, and that the 

Army would deploy as much as possible while meeting 

both its active and reserve rotation goals. However, no 

existing field service companies are available to serve as a 

nondeployed rotation base. Thus, the Army would have 

to create six active units and 59 reserve units to populate 

the rotation base.3

To summarize, the Army would require a total of nine 

active units and 68 reserve units to provide the necessary 

field service function. Three active units and nine reserve 

units would be performing the function at any given 

time, while six active units and 59 reserve units would be 

serving as a nondeployed rotation base. One of the reserve units already exists, but the rest would have to be 

created.

Cost Calculations for Army Field 

Service Companies

Incremental Costs to the Army of Assuming 

Responsibility for the Field Service Function

The incremental costs to the Army of providing the field 

services specified in Task Order 59 would include not 

only the costs of deploying existing units but also the 

costs of maintaining a rotation base in the United States 

(see Table B-1). The rotation base allows soldiers to 

recover from overseas deployments and to spend more 

time in training and with their families.4

According to CBO’s estimates, the one existing reserve 

unit that could be used to provide the field service function would operate at 7.5 times the peacetime operating 

tempo, generating costs of $21.1 million a year to deploy 

(beyond its routine peacetime operating costs).5 The unit 

would also incur a periodic contingency cost of $170,000 

at the start of each five-year deployment in CBO’s 

notional wartime scenario (described in Chapter 3). 

Taken together, costs incurred by that existing reserve 

unit during the first year of deployment would total 

$21.3 million.

The eight new reserve units would each have onetime 

acquisition costs of $12.0 million for personnel and 

equipment, annual routine operating costs of $2.5 million, and annual deployment costs equal to those incurred by existing reserve units. Thus, the eight new 

reserve units would require $96 million for acquisition 

costs, plus $190 million for the first year of a deployment. 

The three new active-component units used to provide 

the field service function would cost $12.9 million each 

to acquire. They would incur annual routine operating 

costs of $8.3 million apiece and additional deployment 

costs of $11.3 million per year (at 7.5 times the peacetime operating tempo). They would also incur periodic 

contingency costs of $137,000 each at the start of every 

five-year deployment. Together, the three new active 

3. For each of the nine reserve field service companies (whether existing or new), the Army would need to create 6.5 new rotational 

units. That requirement translates into 58.5 rotational units, 

which rounds up to 59 whole units.

4. Incremental costs represent the change in the Army’s budget that 

would result from a decision to obtain logistics support using 

Army units rather than a LOGCAP contractor. The Army’s current budget includes funding for the routine operating costs of 

existing units (such as pay for active-duty military personnel, 

peacetime training exercises, and regular equipment maintenance). Incremental costs are measured over and above that baseline.

5. Operating tempo is the rate at which equipment is used during 

training or operations. Operating tempo for vehicles is measured 

in miles driven per vehicle per year. Operating tempo for stationary equipment, such as electrical generators, may be measured in 

hours of utilization per year. The factor of 7.5 represents an average for all types of equipment used in Operations Iraqi Freedom 

and Enduring Freedom; see Congressional Budget Office, The 

Potential Costs Resulting from Increased Usage of Military Equipment 

in Ongoing Operations (March 18, 2005).
APPENDIX B SAMPLE CALCULATIONS TO DETERMINE THE REQUIRED NUMBER OF ARMY FIELD SERVICE COMPANIES 75

Table B-1.

Cost Analysis for Army Field Service Companies

(Millions of 2005 dollars)

Table B-1. Cost Analysis for Army Field Service Companies

Source: Congressional Budget Office.

Note: n.a. = not applicable.

a. Onetime costs include the hiring and training of personnel and the acquisition of equipment for additional Army units. Those costs would 

be incurred only in the first year, when the Army decided to provide logistics services in-house. CBO assumed that existing units would 

already be fully equipped; thus, there would be no acquisition costs for those units. Equipment replacement is included under annual contingency and routine operating costs.

b. Periodic contingency costs occur in the first year of each contingency operation and include the costs to procure equipment and construct 

facilities needed specifically for that operation.

c. Annual contingency costs occur in each year of a contingency operation, or for 10 years during the period of this analysis.

d. Routine operating costs occur each year—or 20 times during the period of this analysis. Half of the routine operating costs for additional 

units would be incurred during periods of contingency operations. Funding for those routine costs could be used to pay for a portion of 

the costs of contingency operations. Routine peacetime operating costs for existing units are excluded from this analysis. Those costs, 

though incurred by the Army, are already included in the Army’s peacetime budget and would not be affected by the Army’s decision to 

provide the field service function using Army units.

12.9 0.1 11.3 8.3 n.a.

12.0 0.2 21.1 2.5 n.a.

n.a. n.a. n.a. n.a. n.a.

n.a. 0.2 21.1 n.a. 211.2

38.8 0.4 33.9 24.8 874.5

96.0 1.4 168.7 20.2 2,189.3 ____ ___ ____ ___ _____

134.8 2.0 223.6 45.0 3,275.0

n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

77.6 n.a. n.a. 49.6 1,070.3

707.8 n.a. n.a. 148.8 3,684.3

____ ___ ___ ____ _____

785.4 n.a. n.a. 198.5 4,754.6

Total for Field Services 920.2 2.0 223.6 243.4 8,029.6

Costsa

Existing units

Active (0)

Reserve and Guard (0)

Total

Active (6)

Reserve and Guard (59)

New units

Costs to Perform Mission

Costs to Provide Rotation Base

Active (0)

Reserve and Guard (1)

New units

Active (3)

Reserve and Guard (8)

Existing units

Total

Costs Over 20-Year Scenario

Active

Onetime

Periodic Annual 

Contingency 

Costsb

20-Year

Total

Reserve and Guard

Costs per Unit

Annual

Routine

Operating

Costsd

Contingency 

Costsc
76 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

units would have onetime acquisition costs of $39 million, plus $59 million during the first year of a deployment.

In total, the three active units and nine reserve units used 

to provide the field service function would incur onetime 

costs of $135 million and first-year deployment costs of 

$271 million. Because the periodic set-up costs would 

not be incurred between the second and fifth years of 

deployment, those years would be slightly less costly at 

$269 million annually. Those totals exclude the routine 

peacetime operating costs of the one existing reserve unit 

because the Army already incurs those costs with its existing force structure, whether or not it decides to perform 

the functions required by Task Order 59. (The omitted 

cost is $2.5 million.)

Incremental Costs of the Rotation Base

The six active units and 59 reserve units that would be 

needed to create a rotation base would also impose incremental costs on the Army. The acquisition costs and routine peacetime operating costs per unit would be the 

same as those outlined above, but there would be no 

deployment costs for units in the rotation base. Thus, the 

units created for the rotation base would incur one-time 

costs of $785 million and annual costs of $198 million.

Total Incremental Costs to the Army

For the Army to provide the field service function, and 

to create and maintain an associated rotation base, would 

require onetime costs of $920 million, periodic contingency costs of $2 million, and annual operating costs 

of $224 million during deployment. Annual peacetime 

operating costs would be $243 million. 
C

The Methodology Behind the Cost Analysis Appendix C: The Methodology Behind the Cost Analysis

The Congressional Budget Office (CBO) developed 

a specific set of calculations to compare the contractor’s 

costs under the Logistics Civil Augmentation Program 

(LOGCAP) with the estimated costs for providing the 

same logistics support using Army units. CBO’s methodology is described below.

Estimating the Costs for Logistics 

Support Under LOGCAP

The current LOGCAP contractor, Kellogg, Brown & 

Root (KBR), provided to CBO its rough-order-of-magnitude cost estimate for implementing the work required 

under Task Order 59 over a period of one year—from 

June 13, 2003, to June 12, 2004. KBR’s estimate covered 

logistics services to be provided at 82 locations under that 

task order. In addition, KBR provided supplemental data 

that contained considerably greater detail for 10 of those 

82 locations. Together, the 10 locations accounted for 55 

percent of the total costs estimated by the contractor for 

Task Order 59 during the period of performance.1

KBR’s estimate included labor and nonlabor components 

for a variety of services, such as:

B Air-terminal and airfield operations;

B Ammunition storage, maintenance, and supply;

B Base-camp construction;

B Base-camp operation and maintenance;

B Communications and information technology 

services;

B Electric power generation;

B Equipment maintenance;

B Firefighting services;

B Food, food service, and dining facility operations;

B Fuel distribution;

B Hazardous-materials management;

B Laundry services;

B Morale, welfare, and recreation;

B Procurement, property management, and supply

support;

B Transportation; and

B Water and ice distribution.

Although the cost estimate provided by Kellogg, Brown 

& Root covered an interval of one year, the period of 

analysis for this study spanned 20 years. While CBO did 

estimate costs for several alternative scenarios—differing 

in the duration, frequency, and sequencing of various 

contingency operations—most results described in this 

appendix apply to CBO’s base-case scenario: a 20-year 

cycle of alternating contingency operations and peacetime operations, each lasting five years.

To extrapolate costs for that 20-year period using only 

one year of contractor data, CBO segregated the costs in 

KBR’s estimate on the basis of whether those costs were 

APPENDIX

1. The 10 locations are Baghdad International Airport, Camp 

Victory Main, Camp Victory North, Forward Operating Base 

Gabe, Logistics Support Area Anaconda, Logistics Support Area 

Diamondback, Rifles Base, Site C5 Gunner, Site H1 DMAIN, 

and Theater Transportation Mission.
78 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

nonrecurring or recurring. (Nonrecurring costs include 

expenditures for facilities and equipment purchased 

once—at the outset of operations. Recurring costs include pay for contractor personnel and the costs of purchased services, supplies, and materials that are incurred 

throughout the entire period of contingency operations.) 

CBO then analyzed those data to determine which of the 

contractor’s costs would also be incurred by the Army if it 

provided logistics services using its own support units.

Nonrecurring Costs 

At the start of a contingency operation, the contractor 

acquires—and bills the Army for—fixed assets such as 

buildings, living quarters, and other facilities. Those onetime costs include both the labor and materials for facilities construction and emplacement. CBO assumed that, 

with regular maintenance, those fixed assets would last 

for the duration of the operation (five years in this analysis). At the outset of the contingency operation the contractor also buys many durable goods, such as buses, 

computers, cranes, forklifts, fuel tanks, freight trucks, icemanufacturing plants, passenger vehicles, phones, water 

wells, and other equipment. By examining KBR’s roughorder-of-magnitude cost estimate, CBO identified $2.7 

billion (in 2005 dollars) in costs for those nonrecurring 

items.

All equipment purchased by the contractor becomes the 

property of the Army. CBO assumed that at the end of 

each five-year contingency operation, any equipment that 

was not available through the Department of Defense’s 

supply system would be donated to the host nation, left 

in that country as prepositioned stocks for use in future 

contingency operations, or otherwise disposed of and 

therefore not available for future contingency operations. 

(According to CBO’s estimates, nonrecurring equipment 

costs would account for less than 3 percent of total 

LOGCAP costs over the 20-year period considered in this 

analysis. If some of the equipment purchased for the first 

contingency operation was available for use in a second 

operation, the resulting reduction in nonrecurring costs 

relative to those estimated here would probably be very 

small.) CBO also assumed that the next contingency operation would occur in a different country and that facilities constructed for the first operation would not be of 

use in the next one. Because CBO’s scenario assumed two 

separate contingency operations, the contractor would 

incur those nonrecurring costs again at the start of the 

second operation—for a total cost of $5.4 billion over 20 

years.

Recurring Costs

Costs incurred to pay for contractor personnel and to 

purchase supplies and materials arise continuously 

throughout the one-year period covered by Kellogg, 

Brown & Root’s cost estimate. In some instances, KBR’s 

estimates for costs related to those recurring items covered a period of less than one year because the function 

could not be performed until the necessary facilities were 

constructed, the number of personnel being supported 

increased during the period of performance (reflected in a 

“change order” to the contract language, or the function 

was added to the statement of work after KBR had begun 

fulfilling the terms of the contract in June 2003. CBO extrapolated those costs to arrive at an annualized estimate.

Estimated Costs for 10 Selected Sites

Kellogg, Brown & Root estimated that it would cost $2.8 

billion (or $2.9 billion in 2005 dollars) to provide logistics support at the 10 sites CBO analyzed for this report 

for the period between June 2003 and June 2004. However, KBR’s cost estimate included certain functions that 

were provided for the full year, and other functions that 

were provided for only a portion of the year. CBO normalized KBR’s estimate to a full year for all services, 

bringing the total to $3.2 billion, or 11 percent more 

than KBR’s estimate. Nonrecurring costs accounted for 

$1.5 billion (about 46 percent) of the estimated costs, 

while recurring costs accounted for the remainder ($1.8 

billion). CBO estimated that of the $3.2 billion, $1.6 billion (48 percent) would be incurred by the Army if it 

provided logistics services using its own support units. 

Those costs cover such items as food and dining facility 

operations, construction materials, and billeting facilities, 

and are in addition to other costs estimated using traditional Army data sources and cost models. 

Estimated Costs Extrapolated to All 

of Task Order 59

Kellogg, Brown & Root estimated that the cost of providing logistics support to all 82 sites under Task Order 59 

would total $5.2 billion (or $5.3 billion in 2005 dollars) 

between June 2003 and June 2004. CBO increased that 

estimate by 11 percent—to $5.9 billion—to arrive at an 

annualized cost for the entire task order, assuming that 

the portion of logistics services that would be provided 

for less than a full year for the task order as a whole would 

be similar to that portion of work at the 10 selected sites. 

CBO assumed that the ratio of recurring to nonrecurring 

costs for the task order as a whole would be consistent 
APPENDIX C THE METHODOLOGY BEHIND THE COST ANALYSIS 79

with the 10 sites studied in detail. Thus, CBO estimated 

nonrecurring costs of $2.7 billion (or 46 percent) and 

recurring costs of $3.3 billion on an annualized basis for 

the entire task order. (See Appendix D for a discussion of 

how much the total cost estimate would vary if the ratio 

of recurring to nonrecurring costs was different from that 

assumed here.)

Because KBR’s estimates covered a period of one year (or 

less in some cases), they excluded the costs to replace vehicles and other durable goods that might wear out over 

the five-year contingency operation assumed in this analysis. Thus, CBO also estimated additional recurring costs 

for the periodic replacement of durable goods. (CBO 

recently completed a study of the impact on equipment 

life of increased usage during contingency operations. 

That study found that, on average, equipment that ordinarily would last 20 years during routine use would last 

only two to three years in demanding contingency operations such as Operation Iraqi Freedom.)2 On the basis of 

analysis of KBR’s data, CBO estimates that replacing 

such equipment would cost an average of $300 million 

each year over the five-year period—or approximately 

one-third of the cost of durable goods purchased at the 

outset of the contingency operation. (When calculating 

the cost of providing logistics support with Army units, 

CBO included a similar charge for the recurring costs to 

replace the Army’s equipment.)

The recurring costs described above total about $3.6 billion and would be incurred each year of the contingency 

operation but not during the intervening peacetime years. 

During those peacetime years, the contractor would incur 

expenses to maintain its ability to rapidly provide logistics 

support under the terms of the LOGCAP contract. The 

contractor would also have to update deployment plans 

and maintain lists of vendors needed for supplies and 

equipment. Those costs would be relatively small, however—on the order of a few million dollars each year or 

slightly less than $100 million over 20 years, CBO 

estimates.

Thus, under a scenario of 20 years—with alternating fiveyear periods of contingency operations separated by five 

years of routine peacetime operations—CBO estimates 

that it would cost the Army $41.4 billion to acquire services similar to those specified in Task Order 59 (see the 

final column of Table 3-4 on page 38).

Estimating the Costs for Logistics 

Support Using Army Units

CBO estimated the incremental costs of providing logistics services using Army units instead of a LOGCAP contract. Incremental costs are those that the Army would 

have to incur in excess of the amounts already budgeted 

for routine military operations of existing units. For example, training costs during peacetime and basic pay for 

personnel in Army units that already exist in the force 

structure would not be incremental and thus were not 

included in this cost estimate. 

CBO estimated that it would cost $78.4 billion over 20 

years to obtain logistics services using Army units. Units 

deployed to provide logistics services would account for 

$42.7 billion of those costs, while another $35.7 billion 

would be required to maintain a rotation base for contingency operations that extended beyond one year. Because 

the Army’s goal is to limit the frequency of deployments 

for active units to no more than one year out of three, 

CBO estimated that the Army would need a total of three 

active units for every unit deployed. During any year, 

there would be one unit deployed, a second unit preparing to deploy as a replacement, and a third unit recovering from a deployment that occurred the previous year. 

For reserve units, the Army’s goal is to mobilize them at 

most one-sixth of the time. However, a one-year deployment for them would probably be immediately preceded 

by a three-month training period, so a reserve logistics 

unit would be mobilized for a total of 15 months. To 

ensure that the 15-month mobilization occurred only 

one-sixth of the time over the long run, the reserve components would require 6.5 units in the rotation base for 

each unit deployed (see Figure 3-1 on page 31).

Costs of Army Units Needed to Perform the Mission

CBO divided its estimate of incremental costs into two 

parts: the costs for units already in existence and available 

to provide logistics support; and (because the Army does 

not currently have enough units to perform the entire 

mission) costs for creating and deploying the additional 

units that would be needed to fulfill the logistics mission. 

CBO estimates that the Army would require a total of 

177 active and reserve units to provide the same type of 

logistics services that Kellogg, Brown & Root now provides under Task Order 59. Of those units, 104 are cur2. Congressional Budget Office, The Potential Costs Resulting from 

Increased Usage of Military Equipment in Ongoing Operations

(March 18, 2005).
80 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

rently in the Army force structure and available for 

deployment. The remaining 73 units would need to be 

established and filled with personnel and equipment 

before they could be deployed.

Contingency Operations Costs for Existing Units. According to CBO’s estimates, the Army has 104 units of varying types—ranging from ammunition handlers to engineer detachments, medical teams, supply units, and truck 

companies, among others—that could perform the tasks 

currently assigned to the LOGCAP contractor (see 

Table C-1). The Army’s regular budget includes funding 

to pay for personnel and for routine operation of the 

units in the current force structure. However, that budget 

does not include the incremental costs of contingency 

operations. Over the 20-year scenario of this study, CBO 

estimates that contingency costs for the 104 units would 

total about $18.5 billion (this estimate appears in the 

final column of Table 3-4 on page 38). The $18.5 billion 

in costs would break down as follows:

B $2.6 billion for personnel;

B $450 million for personnel support;

B $14.3 billion for operating support, including $1.4 

billion for periodic expenses and $8.7 billion in recurring expenses taken from KBR’s cost estimate; and

B $1.2 billion for transportation to and from the area of 

operations.

Personnel Costs. Incremental personnel costs include pay 

and allowances for reserve-component service members 

called to active duty, as well as special pay and allowances 

(including imminent-danger pay, family separation allowance, and hardship duty pay) for both active-duty and 

reserve personnel who are deployed for contingency operations. (Pay and routine allowances for active-duty personnel are not considered incremental costs because they 

are funded in the Army’s regular budget and would be 

incurred regardless of whether those personnel deployed 

in a contingency operation or remained at their home 

station.) In CBO’s estimation, those costs, which would 

recur in each year of the contingency operation, would 

total $2.6 billion over 20 years.

To estimate those costs, CBO first quantified the incremental personnel costs of Army Reserve and National 

Guard service members called to active duty to support a 

contingency. This calculation involved multiplying the 

numbers of officers, warrant officers, and enlisted personnel in each Army Reserve and National Guard unit by the 

appropriate pay and allowance rates derived from Army 

pay tables and data provided by the Defense Manpower 

Data Center (DMDC). To complete the calculation, 

CBO subtracted the pay and allowances that service 

members would have received for performing routine 

reserve duty.

CBO assumed that during the contingency operations 

considered in this report, personnel would be deployed to 

a designated danger area, such as Iraq or Afghanistan, and 

would receive imminent-danger pay of $225 per month. 

Next, CBO estimated the incremental cost of the family 

separation allowance—currently $250 per month for deployed personnel who have spouses or children—by multiplying that figure by the number of personnel in all 104 

units and by the percentage of deployed personnel with 

families as reported by DMDC (approximately 60 percent). 

Finally, all personnel involved in contingency operations 

receive hardship duty pay. CBO estimated the cost of this 

special pay on the basis of average rates—about $55 per 

month—derived from the Army’s budget justification 

books for its military personnel appropriations.

Personnel Support Costs. Personnel support includes the 

cost of special clothing and equipment that soldiers need 

to operate in a particular area or climate; the cost of medical support to prepare soldiers for deployment; and the 

cost of other services, such as mail delivery to deployed 

troops, family support programs, and morale, welfare, 

and recreation programs. CBO calculated the costs for 

those items and services using per capita factors developed by the Institute for Defense Analyses (IDA) and by 

the Deputy Assistant Secretary of the Army, Financial 

Management and Comptroller, Cost and Economics. On 

the basis of those data, CBO determined that personnel 

support costs for existing Army units would total $450 

million over 20 years. 

Operating Support Costs. For Army units that would 

provide logistics services in place of the LOGCAP contractor, operating support costs would include costs for 

ammunition, the construction and maintenance of temporary facilities in the area of operations, fuel, replacement parts, and other supplies. The category would also 

include costs for essential services, such as medical sup-
APPENDIX C THE METHODOLOGY BEHIND THE COST ANALYSIS 81

Table C-1.

Existing Units Available to Provide Logistics Services

Table C-1. Existing Units Available to Provide Logistics Services

Source: Congressional Budget Office.

Note: HHC = headquarters and headquarters company; HHD = headquarters and Headquarters detachment.

115

31

65

63

52

49

114

101

75

132

16

11

10

220

123

140

32

175

1,314

190

60

348

170

28

800

21

150

774

108

114

336

272

104 6,209

Utilities Team Engineer Detachment 6

Water Purification and Distribution Company 2

All Functions

Total

Repair Parts Team 2

Subsistence Platoon 2

Preventive Medicine (Sanitation) Detachment 15

Prime Power Engineer Battalion 3

Nondivisional Ordnance Maintenance Company 4

Port Movement Control Team 1

Medium Truck Company (5,000 gal.) 1

Movement Control Regulating Team 1

Medical Detachment (Blood support) 2

Medium Truck Company (20 ft.) 2

Heavy Engineer Combat Battalion 2

Heavy Material Supply Company 1

Firefighting Team Headquarters 8

Force Provider Company 5

Field Service Company 1

Firefighting Team 20

Division Support Movement Control Team 1

Explosive Ordnance Disposal Company 10

Area Movement Control Team 1

Cargo Documentation Movement Control Team 1

Air Traffic Support Maintenance Company 1

Ammunition Ordnance Heavy Lift Platoon 3

HHD Supply and Service Battalion 2

Air Traffic Services Company 1

Logistics Functions

HHD Ordnance Battalion (Ammunition) 1

HHD Ordnance Maintenance Battalion 1

HHD Medical Logistics Battalion 1

HHD Movement Control Battalion 1

HHC Engineer Brigade 1

HHD Explosive Ordnance Disposal Battalion 1

Unit Type Number of Units Number of Troops

Command-and-Control Functions
82 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

port and communications, as well as costs for training 

conducted immediately prior to deployment or during 

the contingency operation to maintain proficiency. These 

costs would total $14.3 billion over the 20-year period, 

including $1.4 billion for periodic expenses and $8.7 

billion in recurring expenses taken from KBR’s cost 

estimate.

CBO estimated the costs for most supplies, medical support, unit training, facilities support, and communications services by multiplying the number of soldiers in 

each unit by per capita cost factors for those items (as 

developed by IDA). The costs for fuel, consumable supplies (for instance, filters, seals, lubricating oils), and 

spare parts were estimated on the basis of the type and 

quantity of equipment in each unit, the cost of operating 

that equipment for a given unit of measurement (such as 

hours or miles), and the frequency with which that 

equipment would be used in a contingency operation. 

Each unit’s Table of Organization and Equipment (TOE) 

lists the types and quantity of equipment assigned to it.3

The average costs for fuel, replacement parts, and consumable supplies for operating each item of equipment 

were taken from the Army’s Operating and Support Management Information System (OSMIS) database.4

 That 

database also includes information on the rate at which a 

particular unit uses an item of equipment during routine 

peacetime operations. CBO assumed that in contingency 

operations, the Army would use equipment at 7.5 times 

the peacetime rate, on average. (Most operating support 

costs are not sensitive to changes in the equipment usage 

rate alone. Applying usage rates of 2.5 times the peacetime rate rather than 7.5 times that rate would reduce the 

estimate of contingency costs by about 4 percent and that 

of total costs by about 2 percent.) 

The Army would also incur the incremental expenses of 

rebuilding or replacing equipment that had been degraded, damaged, or destroyed from more frequent and 

vigorous use than is typical for routine peacetime operations. To calculate that cost, CBO grouped the major 

equipment items in each unit into three categories: 

tracked vehicles, trucks and other vehicles, and all other 

support equipment. In an earlier study, CBO determined 

that tracked vehicles have a useful life of 30 years when 

operated at peacetime rates. During contingency operations in Southwest Asia, however, those tracked vehicles 

would be used at five times the peacetime rate.5 For 

trucks, CBO assumed a 20-year useful life and an operating tempo in contingency operations that would be equal 

to 10 times the routine usage. For all other equipment, 

CBO assumed a useful life of 20 years and an operating 

tempo of five times the routine rate during contingencies. 

Thus, tracked vehicles would need to be replaced every 

six years, trucks and other vehicles every two years, and 

all other equipment every four years. On average, equipment would be worn out at 7.5 times the rate experienced 

in peacetime use.

Using data provided by the Army, CBO multiplied the 

quantity of equipment in each unit’s TOE by equipment 

cost factors to calculate the total acquisition cost of 

equipment in each of those three categories.6

 CBO 

divided the resulting estimate by the expected useful life 

during contingency operations to estimate the annual 

cost to rebuild or replace a unit’s damaged or destroyed 

equipment. For the 104 existing units, that cost would 

amount to about $200 million a year. The 73 additional 

units would incur another $250 million a year to replace 

worn-out equipment—a total of $450 million, or 13 percent of the estimated annual contingency cost for all units 

that would provide logistics services. That amount is 

about one-third higher than the cost to replace equipment procured by the LOGCAP contractor. If the rate of 

wear and tear was different from that estimated here, the 

3. The Army monitors equipment use with different units of measurement depending on the type of equipment. Aircraft use is 

measured in hours, while the use of tanks, combat vehicles, and 

transport equipment is measured in miles. The use of some types 

of support equipment, such as mobile electrical generators, is 

tracked in hours. Costs for other items are measured as an average 

cost over a fixed period of time, such as months or years.

4. The OSMIS database reports actual equipment use, fuel consumption, and maintenance costs of equipment for all Army organizations. 

5. Congressional Budget Office, The Potential Costs Resulting from 

Increased Usage of Military Equipment in Ongoing Operations. 

Although tanks are the most expensive tracked vehicles in the 

Army’s inventory, tanks have a purely combat mission and are not 

operated by KBR. However, KBR does operate other equipment 

purchased with funds from the Army’s Weapons and Tracked 

Combat Vehicles appropriation. For example, KBR operates the 

Army’s M88 tank recovery vehicle, which is used to transport 

immobilized tanks back to a repair shop. The Army provides some 

M88s to KBR as government-furnished equipment, and other 

M88s are operated by Army units.

6. The current cost of Army equipment was derived from prices in 

Army Supply Bulletin 700-20, Official List of Army Adopted Items 

of Materiel and List of Reportable Items (December 2004).
APPENDIX C THE METHODOLOGY BEHIND THE COST ANALYSIS 83

costs of using either the LOGCAP contractor or Army 

support units would change by similar amounts.

In addition to the costs discussed above, CBO determined that some of the costs incurred by Kellogg, Brown 

& Root for work performed under the LOGCAP contract would also be incurred by the Army. For example, 

the cost of construction materials was not included in the 

annual operating cost data that CBO used to estimate 

costs for Army construction units. KBR also hired foreign 

nationals to perform many tasks, and CBO believes the 

Army would also hire foreign nationals for some of that 

work (for instance, groundskeeping and housecleaning) 

rather than assign soldiers to perform these tasks. In other 

cases, CBO added KBR’s costs to the estimate of Army 

costs in an attempt to eliminate possible differences in 

quality between the goods and services provided by 

KBR and those provided with Army equipment and

personnel.

Some of KBR’s periodic expenses—those incurred in the 

first year of each contingency operation—would also be 

incurred by the Army. For example, KBR purchased airconditioned living shelters similar to mobile homes to 

house many of the troops in Iraq, while the Army would 

typically house its deployed soldiers in tents reinforced 

with plywood and lumber if it provided logistics support. 

Thus, CBO added the acquisition cost of the KBRpurchased shelters to the estimate of Army costs to create 

a more “apples-to-apples” comparison of quality, and removed the cost of Army personnel, equipment, and supplies that would normally be used to perform that service. 

Certain items that KBR purchased at the outset of the 

contingency operation would not routinely be allotted to 

Army units providing logistics support to the combat 

forces. CBO allowed for those items by including additional costs in the estimate of the Army’s costs for periodic expenses. Examples of such expenses include the 

costs for commercial buses to move personnel around and 

between camps, high-capacity ice-making plants, wastewater treatment equipment, waste incinerators, and gymnasium equipment. CBO also added the costs to construct permanent or temporary facilities because the 

Army would probably need to undertake similar military 

construction projects when providing logistics services. In 

total, CBO added about $1.4 billion to the periodic costs 

of the 104 existing units over the 20-year period, or $700 

million for each contingency operation. 

CBO also included in its estimate of costs for existing 

Army units some $8.7 billion in recurring costs from 

KBR’s estimate. Approximately 80 percent of those additional recurring costs were for food and food services. 

The remaining costs were for consumable supplies

and labor services (such as groundskeeping and housecleaning).7

When CBO added KBR’s costs to provide some logistics 

services, it removed the costs for Army personnel, equipment, and supplies normally used to perform that service 

organically. For example, the Army’s force provider companies provide billeting, food services, showers and 

latrines, laundry services, and recreation facilities for 

deployed forces. According to Army documents, each of 

those units would have 435 soldiers if fully manned. 

However, they are routinely manned with as few as 35 

enlisted soldiers, filling the remaining positions with U.S. 

civilians or foreign nationals during a deployment. CBO 

assumed that the Army would adopt KBR’s methods of 

delivering the services that would normally be assigned to 

force provider companies and excluded from the cost estimate the additional personnel and equipment that a force 

provider company would need to perform those services. 

In other words, CBO assumed that the force provider 

companies would deploy with only 8 percent of their personnel and 20 percent of their equipment, and that 

KBR’s costs would be a surrogate for the remaining U.S. 

civilians and foreign nationals. The contingency costs for 

the 10 force provider companies in the Army’s logistics 

force would total $600 million per year if those companies were fully manned but only $100 million per year at 

the reduced strength assumed by CBO.

Transportation Costs. Using the number of personnel in 

each unit, the weight of equipment assigned to that unit, 

and the prices for moving personnel and equipment by 

air and sea in cost schedules published by the U.S. Transportation Command, CBO estimated costs to move each 

unit approximately 6,000 miles from the United States to 

Iraq. CBO assumed that all personnel and 20 percent of 

equipment would be sent to the theater by air and that 

the remaining equipment would be transported by sea to 

a port in Iraq and then transported by trucks or otherwise 

driven to the final destination in-country. CBO assumed 

7. For all of the services specified in Task Order 59, CBO added a 

total of $18.7 billion to its estimate of Army costs over 20 years on 

the basis of costs estimated by KBR. Food and food services 

accounted for approximately $12 billion of this total.
84 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

that all personnel would return to the United States after 

one year but that the unit’s equipment would remain 

behind for use by personnel deployed to replace them. 

CBO also assumed that after the fifth year of each contingency operation, all personnel and equipment would 

return to the United States. (Transportation costs in the 

fifth year would be less than estimated for this study if 

some equipment was left in the theater of operations, 

either as a donation to the host country or because the 

expense to transport it home would exceed its value.) 

Transportation costs for existing units would total $1.2 

billion over the 20-year period, according to CBO’s 

estimates.

Acquisition Costs for Additional Units. CBO estimates 

that the Army would need to man and equip 73 additional transportation, supply, medical, engineering, and 

other support units to perform the tasks required in the 

statement of work for Task Order 59 (see Table C-2). 

Because the Army’s budget includes funding only for 

those units that are currently in the force, all costs for 

new units would be incremental in this analysis. The cost 

to fill new units with the required personnel and equipment—estimated at $700 million—would be incurred 

once, at the time the units were created (see Table 3-4 on 

page 38). 

Although the Army would probably need more than a 

year to acquire all of the equipment and to recruit and 

train all of the personnel needed to field those additional 

units, for this analysis CBO assumed that all of the additional units would be fielded in time to provide logistics 

services at the start of the 20-year scenario. 

Personnel Acquisition Costs. CBO estimates that the cost 

to recruit and train new personnel to staff the additional 

units needed to provide logistics services would total 

$110 million and would be incurred in the first year of 

the 20-year period considered for this study. CBO 

assumed that the Army would recruit and train enough 

personnel to staff every position in the newly created 

units but that current Army personnel would be transferred from other assignments to staff the senior positions 

in the new units. Personnel in existing units would be 

promoted or transferred to fill out the vacancies in the 

upper ranks, and the new recruits would fill vacancies 

created at the lower echelons. CBO estimated recruiting 

costs using per capita costs derived from the Army’s recruiting budget request for 2005. Training costs were calculated on the basis of the number of personnel assigned 

to each military occupational specialty (MOS) in a unit 

and the cost for basic training and for additional training 

needed to qualify personnel for their MOS. CBO derived 

other costs, such as those for recruits to travel from their 

homes to training centers and from their training base to 

their first duty station, using per capita costs provided by 

the Army.

Equipment Acquisition Costs. According to CBO’s estimates, it would cost $590 million to purchase vehicles, 

weapons, communications equipment, and other support 

equipment; to provide clothing and individual equipment for each soldier; and to provide initial inventories of 

ammunition, spare parts, and supplies. CBO estimated 

the cost of unit equipment listed in each TOE using 

prices from Selected Acquisition Reports prepared by the 

Department of Defense, from Army supply and logistics 

publications, and from Army budget justification materials. Similarly, CBO used per capita and per-unit factors 

provided by the Army to estimate the cost of ammunition, spare parts, supplies, clothing, and equipment.

Routine Operations Costs for Additional Units. The 

Army’s budget includes funding for the day-to-day operations of only those existing units that CBO believes could 

be assigned to provide most of the logistics services currently being furnished by Kellogg, Brown & Root. The 

routine operating expenses for additional units are thus 

incremental costs in this analysis. CBO estimates that the 

annual recurring costs of maintaining those additional 

units would total about $300 million per year, or $5.9 

billion over 20 years (see Table 3-4 on page 38). Once 

fielded, those units would remain in the force structure, 

even when they were not deployed to contingency 

operations to provide logistics support. Therefore, their 

operating expenses would recur each year in this analysis. 

Annual personnel costs ($3.9 billion over 20 years) would 

include all pay and allowances. CBO estimated those 

costs on the basis of the number of personnel authorized 

to each unit and data from Army pay tables. Costs would 

also include those that arose from recruiting and training 

new personnel to replace soldiers who transferred to other 

units or who separated from the service. The estimate of 

recruiting and training costs was determined on the basis 

of per capita factors similar to those that would be incurred to initially man a unit. Also considered was the 

frequency with which officers and enlisted personnel
APPENDIX C THE METHODOLOGY BEHIND THE COST ANALYSIS 85

Table C-2.

Additional Units Needed to Provide Logistics Services Table C-2. Additional Units Needed to Provide Logistics Services

Source: Congressional Budget Office.

Note: HHC = headquarters and headquarters company; HHD = headquarters and headquarters detachment.

leave units as a result of either separation or rotation to 

new duty assignments.

Routine costs for training and for operating and maintaining unit equipment would include direct expenses for 

fuel, consumable supplies, repair parts, and ammunition. 

CBO estimated those costs using data from the OSMIS 

database. Other routine costs would include indirect expenses, such as base operations costs, facilities maintenance costs, utilities, civilian salaries, contracted services, 

administrative and overhead functions, and other logistics services. CBO estimated those costs using per capita 

cost factors developed by the Army for indirect expenses. 

Combined, those operation and maintenance costs would 

total $1.5 billion over 20 years, CBO estimates. 

While equipment would be purchased for new units at 

the time they were created, over the subsequent 20 years 

the Army would need to replace that equipment on a 

periodic basis to ensure that the unit remained capable of 

performing its mission. On the basis of the same assumptions previously outlined for normal peacetime operations—assigning tracked vehicles a useful life of 30 years 

but trucks and other support equipment a life of only 20 

years—CBO estimated it would cost $500 million over 

20 years to replace equipment on a periodic basis.

Contingency Operations Costs for Additional Units. 

When participating in contingency operations, the additional units would incur incremental costs for personnel, 

personnel support, operating support, and transportation 

at the same rate that existing units would. Those costs 

would total $17.6 billion over 20 years (see Table 3-4 on 

page 38). Those costs would break down as follows: 

B $3.0 billion for personnel;

B $400 million for personnel support;

B $12.8 billion for operating support, including $1.2 

billion for periodic expenses and $7.4 billion in recurring expenses taken from KBR’s cost estimate; and

B $1.4 billion for transportation.

1 60

1 57

1 280

1 299

11 1,353

28 196

5 175

3 90

2 338

1 186

7 1,806

2 108

5 625

5 285

73 5,858

Number of Units Number of Troops

HHC Air Traffic Services Battalion

HHD Supply and Service Battalion

Command-and-Control Functions

Repair Parts Team

Field Service Company

Firefighting Team

Force Provider Company

Medical Detachment (Blood support)

Unit Type

Medium Truck Company (40 ft.)

Petroleum Pipeline and Terminal Company

Prime Power Engineer Battalion

Logistics Functions

Cargo Transfer Company

Combat Heavy Equipment Transport Company

All Functions

Total

Supply Company

Subsistence Platoon
86 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Costs to Provide a Rotation Base

In addition to the units that the Army would need to provide its own logistics support, the Army would need to 

create enough units to regularly replace those deployed to 

the theater of operations if contingency operations continued beyond one year. According to CBO’s estimates, 

in order for the Army to meet its deployment goal for 

active units and its mobilization goal for reserve units, it 

would need a rotation base of 875 units to keep 177 units 

continuously deployed in contingency operations—a 

total of 1,052 units in all. Because there are now only 81 

units available to fill a portion of the rotation base, the 

Army would need to man and equip another 794 units to 

satisfy the requirement. 

The Army is not currently meeting its rotation goals and 

is deploying many active-component units more frequently than once every three years. Some active units are 

being deployed as soon as one year after returning from 

their most recent deployment. If CBO assumed that the 

Army intended to deploy logistics support units as frequently as it now deploys other units, fewer units would 

be needed for the rotation base and costs would be less 

than estimated here. However, in estimating the number 

of units required for the rotation base, CBO assumed the 

Army would meet its minimum goals for deployment 

frequency. 

Although the units in the rotation base would not incur 

the incremental costs associated with contingency operations, they would have routine operating costs for personnel and equipment. CBO estimated that the costs to 

recruit and train new personnel and acquire equipment, 

supplies, and ammunition for the 794 additional units 

needed for the rotation base would total $5 billion. Over 

20 years, the costs of routine operations for the new units 

would total $30.7 billion (see Table 3-4). Those costs 

would break down as follows:

B $18.3 billion for personnel;

B $2.5 billion for training, operations, and maintenance;

B $6.3 billion for indirect costs; and

B $3.6 billion to replace equipment worn out as a result 

of normal wear and tear. 
D

Assessing the Sensitivity of Results to 

Certain Assumptions Appendix D: Assessing the Sensitivity of Results to Certain Assumptions

Extrapolating Cost Factors from 

10 Selected Sites

In the main text of this study, the Congressional Budget 

Office (CBO) estimated the cost of providing logistics 

support to deployed Army units using two different approaches—a private contractor hired under the Logistics 

Civil Augmentation Program (LOGCAP), or the Army’s 

own logistics units. The current LOGCAP contractor, 

Kellogg, Brown & Root, provided CBO with summary 

cost data that capture its activities under LOGCAP Task 

Order 59 throughout the entire Iraqi theater, as well as a 

detailed breakdown of the estimated costs incurred at 10 

particular sites within the theater. CBO used a weighted 

average of data from the 10 selected sites to estimate the 

values of two key cost factors used in the analysis: recurring costs as a percentage of total costs, and the percentage of contractor costs that should be added to the estimate of Army costs. CBO applied those weighted 

averages when estimating the total costs of having the 

Army perform the logistics functions specified in Task 

Order 59. If the work at those 10 sites is representative of 

the total costs of implementing Task Order 59, then extrapolation should produce a fairly accurate estimate of 

total costs. However, if the distribution of costs within 

various categories (such as equipment, facilities, labor, 

and food services) differs between the selected sites and 

the remaining sites, CBO’s sample of sites may not be 

representative of all sites served under the task order. 

Therefore, costs for the work required under the task order as a whole could differ from those estimated here.

For the first cost factor, CBO estimated that recurring 

costs for the contractor accounted for 54 percent of total 

costs at the 10 selected sites, with nonrecurring costs accounting for the other 46 percent. If the Army provided 

services at those sites, CBO estimated, its costs would 

break down as 56 percent recurring costs and 44 percent 

nonrecurring costs.1

 For the second cost factor, CBO 

added an average of 48 percent of the contractor’s costs at 

the 10 sites to the estimate of Army costs. Although those 

amounts were averages, the variation across the 10 sites 

suggested that, for the task order as a whole, recurring 

costs for both the contractor and the Army could be as 

high as 80 percent or as low as 40 percent of total costs, 

depending on which of the 10 sites is most representative 

of the whole. Similarly, the percentage of contractor costs 

that should be added to the Army estimate could be as 

high as 70 percent or as low as 35 percent.

Given estimates of the contractor’s or the Army’s costs at 

any one site, a reclassification of costs that increases recurring costs by 1 percentage point must necessarily decrease 

nonrecurring costs by 1 percentage point (because the total must remain at 100 percent). Looking across the 10 

sites, however, the ones that would require a larger-thanaverage investment in nonrecurring costs by the contractor would typically still require a larger-than-average investment if the Army took over the logistics function. 

This positive correlation arises because the factors that 

necessitate a larger-than-average investment—such as a 

large troop population that must be supported at a site 

containing few existing habitable structures—would be 

the same regardless of which organization was responsible 

for providing the logistics support. Thus, in the sensitivity analysis, CBO assumes a common percentage of recurring costs for the contractor and the Army, although it 

varies that common factor in the range between 40 percent and 80 percent. CBO independently varied the 

APPENDIX

1. Because existing Army units would already possess much of the 

equipment they would need for the logistics mission, their nonrecurring costs would be slightly lower than those for the LOGCAP 

contractor.
88 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table D-1.

Alternative Assumptions for Key Cost Parameters

Table D-1. Alternative Assumptions for Key Cost Parameters

Source: Congressional Budget Office.

a. The contractor provided summary cost data that capture the activities under Logistics Civil Augmentation Program (LOGCAP) Task 

Order 59 throughout the entire Iraqi theater, as well as a detailed breakdown of the estimated costs incurred at 10 particular sites within 

the theater. For the 10 selected sites, recurring costs for the LOGCAP contractor were 54 percent of total costs. CBO estimated that recurring costs for the Army were 56 percent of total costs.

b. For the 10 selected sites, nonrecurring costs for the LOGCAP contractor were 46 percent of total costs. CBO estimated that nonrecurring 

costs for the Army were 44 percent of total costs.

percentage of contractor costs that should be added to the 

estimate of Army costs, in the range between 35 percent 

and 70 percent (see Table D-1). However, CBO observed 

that among the 10 sites, those with high recurring costs 

tended to also have a high percentage of contractor costs 

that should be added to the Army estimate. Thus, the 

eight sensitivity cases in Table D-1 are not all equally 

likely.

The results for most of the sensitivity cases were consistent with the results produced using the weighted averages for the 10 sites. In all of the alternative combinations, the total cost of using Army units, including the 

cost of units in the rotation base, was higher than the 

costs incurred under the LOGCAP contract. In five of 

the eight alternative cases, the direct cost (that is, excluding the rotation base) of providing logistics support with 

Army units was also greater than the cost of the 

LOGCAP contract (see Table D-2).

In only one case—when recurring costs were a high percentage of total costs, and the costs added to the Army 

were a low percentage of total costs—was the direct cost 

of providing logistics support using Army units significantly less than the cost of the LOGCAP contract. In that 

case, the Army’s direct cost to provide logistics support 

would be $12.2 billion less than the cost of the LOGCAP 

contract, CBO estimated. However, in light of the positive correlation already noted between the percentage of 

recurring costs and the percentage of additive costs, this 

particular case is among the least likely. The implausibility of this case becomes apparent by considering that food 

and food services for supported Army units would be the 

single largest recurring cost and would also be fully additive to the Army costs. Thus, when recurring costs were 

high as a result of food and food services costs, additive 

costs for the Army would also be high—as distinct from 

this case.

CBO concluded that the overall result of this analysis—

that total costs for acquiring logistics support from the 

LOGCAP contractor would be lower than the costs of 

providing those services using Army units—would be unlikely to change if the split between recurring and nonrecurring costs differed from the weighted average for the 

10 sites. Nor would the result change if the percentage of 

Kellogg, Brown & Root’s costs added to CBO’s estimate 

for Army units differed from the weighted average.

Recurring Costs Nonrecurring Costs Army Additive Costs

as a Percentage of as a Percentage of as a Percentage of

Total Costs Total Costs Total Costs

Average Recurring Costs/Average Additive Costs 54/56a 46/44b 48

High Recurring Costs/Average Additive Costs 80 20 48

Low Recurring Costs/Average Additive Costs 40 60 48

Average Recurring Costs/High Additive Costs 54 46 70

Average Recurring Costs/Low Additive Costs 54 46 35

High Recurring Costs/High Additive Costs 80 20 70

Low Recurring Costs/High Additive Costs 40 60 70

High Recurring Costs/Low Additive Costs 80 20 35

Low Recurring Costs/Low Additive Costs 40 60 35
APPENDIX D ASSESSING THE SENSITIVITY OF RESULTS TO CERTAIN ASSUMPTIONS 89

Table D-2.

Sensitivity of Incremental Costs to Changes in Assumptions

(Billions of 2005 dollars)

Table D-2. Sensitivity of Incremental Costs to Changes in Assumptions

Source: Congressional Budget Office.

Note: LOGCAP = Logistics Civil Augmentation Program.

a. Direct costs are those to provide logistics services excluding incremental costs of the Army’s rotation base.

b. Total costs are those to provide logistics services including the incremental costs of the Army’s rotation base.

Providing Logistics Support 

Exclusively with Active Army Units

Another assumption that CBO used in its analysis was 

that the Army would deploy both active-component and 

reserve-component units to provide logistics support—as 

it does for current contingency operations. Alternatively, 

if the Army anticipated frequent and lengthy contingency 

operations in the future, it could decide to use only active-component units to provide that support. More new 

units would be required to perform the logistics functions—130 instead of 73—but fewer units would be 

needed for the rotation base because active units are assumed to be deployed for a much larger percentage of the 

time than are reserve units. The Army would need to 

maintain only 324 units for the rotation base, instead of 

the 875 required under the base case of this analysis. Acquisition costs would be lower because less equipment 

and fewer personnel would be required for the smaller 

number of active units, but routine operating costs for active units would be higher because those units spend 

more time training than reserve units do and because 

active-duty personnel are paid full time.

CBO estimates that over the 20-year period considered in 

this analysis, it would cost the Army about $1.1 billion 

less to use only active-component units to provide logistics services in contingency operations, compared with 

the cost of providing those services using a mix of activeand reserve-component units (see Table D-3). Onetime 

and periodic costs for an all-active-component force 

would be $2.3 billion less than for a mixed force. Recurring contingency costs would be $4.3 billion lower, but 

recurring routine costs would be $5.5 billion higher.

Additive Costs 41.4 42.7 78.4 1.3 37.0

Additive Costs 53.7 48.1 83.8 -5.6 30.1

Additive Costs 34.7 38.9 74.6 4.2 39.9

Additive Costs 41.4 51.0 86.8 9.6 45.4

Additive Costs 41.4 37.5 73.3 -3.9 31.9

Additive Costs 53.7 58.9 94.7 5.2 41.0

Additive Costs 34.7 45.7 81.4 11.0 46.7

Additive Costs 53.7 41.5 77.2 -12.2 23.5

Additive Costs 34.7 34.8 70.5 0.1 35.8

Army Costs

to Provide

Logistics Services

Total Army

Costs, Including

Rotation Base

Difference in

Direct Costsa

Difference in

Total Costsb

Average Recurring Costs/Average 

High Recurring Costs/Average 

LOGCAP 

Costs

Low Recurring Costs/High 

High Recurring Costs/Low 

Low Recurring Costs/Low 

Low Recurring Costs/Average 

Average Recurring Costs/High 

Average Recurring Costs/Low 

High Recurring Costs/High 
90 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table D-3.

Comparison of Incremental Costs Over 20 Years for Providing Logistics Support 

Using Only Active-Component Army Units

(Billions of 2005 dollars)

Table D-3. Comparison of Incremental Costs Over 20 Years for Providing Logistics Support Using Only Active-Component Army Units

Source: Congressional Budget Office.

Note: n.a.=not applicable.

a. Onetime costs include the hiring and training of personnel and the acquisition of equipment for additional Army units. Those costs would 

be incurred only in the first year, when the Army decided to provide logistics services in-house.

b. Periodic contingency costs occur in the first year of each contingency operation and include the costs to procure equipment and construct 

facilities needed specifically for that operation.

c. Recurring contingency costs for two five-year contingency periods.

d. Costs for 20 years of routine operations. For existing units, those costs would be included in the Army’s peacetime budget and would not 

be incremental to bringing the logistics functions in-house. For new units, half of those costs would be incurred during contingency 

operations.

In this analysis, CBO assumed that the Army would 

spend 10 years out of the 20-year period deployed in contingency operations. If contingency operations took place 

for more than 10 years, savings from using only activecomponent units would be greater than $1.1 billion. 

CBO estimates that in the alternative scenario in which 

four consecutive five-year contingency operations 

occurred, providing logistics services only with activecomponent units would cost about $4 billion less over 20 

years than using a combination of active- and reservecomponent units.

3.2 33.6 5.9 42.7

3.4 29.3 11.1 43.8

0.2 -4.3 5.2 1.1

5.0 n.a. 30.7 35.7

2.5 n.a. 31.1 33.6

Difference -2.5 n.a. 0.3 -2.2

Total Difference -2.3 -4.3 5.5 -1.1

Mix of active and reserve units

All active-component units

Costs to provide rotation base

Logistics Support Provided by Army Units

Costs to perform mission

Difference

Mix of active and reserve units

All active-component units

Recurring

Costsc

Contingency 

Onetimea

 and 

Periodic

Contingency Costsb

20-Year 

Total

Recurring

Routine Costsd
E

Routine Costs for Existing Army Units Appendix E: Routine Costs for Existing Army Units

The costs considered throughout this study are incremental budgetary costs—that is, the change in the Army’s 

budget that would result from a decision to obtain logistics support using Army units rather than a Logistics 

Civil Augmentation Program (LOGCAP) contractor. 

The Army’s current budget includes funding for the routine operating costs of existing units (such as pay for 

active-duty military personnel, peacetime training exercises, and regular equipment maintenance). Basic pay and 

peacetime allowances for active-duty personnel would 

already be funded if those units were deployed for contingency operations. However, additional funding would be 

required for types of special pay and allowances for which 

soldiers would qualify if deployed to a wartime theater—

including hostile-fire pay and imminent-danger pay—

and pay for reserve personnel called to active duty.

When units participate in contingency operations, they 

no longer need funds to pay for routine operations and 

maintenance activities. Thus, the funds budgeted for 

those activities become available to pay for a portion of 

the costs associated with the contingency operations. For 

existing units, the incremental costs in this study are the 

“above and beyond” costs—that is, the full costs of the 

operation, minus the costs of routine operations that are 

already funded in the Army’s budget.

Those recurring routine costs are significant: for existing 

units assigned to provide logistics services, they would 

total $8.3 billion over 20 years (see Table E-1). During 

10 of the 20 years in the Congressional Budget Office’s 

(CBO’s) base-case scenario, existing units would participate in contingency operations instead of routine peacetime operations. Thus, half of the budgeted $8.3 billion 

would not actually be spent on routine operations but 

could be diverted to pay a portion of the cost of contingency operations. In effect, $4.2 billion in budgeted costs 

could be used to partially pay for contingency operations 

that are not funded in the Army’s peacetime budget. 

Existing units that would be part of the rotation base 

have routine costs of $6.3 billion over the 20-year period, 

but those costs would continue to accrue during either 

wartime or peacetime, so they would not be available to 

fund contingency operations.

If this analysis considered full costs rather than incremental costs, the Army’s costs would exceed those of the contractor by a much larger margin. Even without a rotation 

base, the Army units providing logistics services would 

cost $9.6 billion more than the LOGCAP contractor over 

20 years, compared with just $1.3 billion when only 

incremental costs are considered. Total costs for providing logistics support with Army units, including the full 

cost of the rotation base, would exceed the cost of the 

LOGCAP contractor by nearly $52 billion, compared 

with the incremental-cost estimate of $37 billion. 

Evaluating the full cost of alternative approaches for providing logistics support is informative, but for policymaking, the analysis of incremental costs is more useful. Because routine operating costs for existing units would not 

change as a result of a decision to obtain logistics services 

from Army units, those costs should not be considered in 

the decisionmaking process. While those costs are not 

fixed—the Army could decide to eliminate those units to 

avoid their costs if military planners decided the units 

were no longer needed—CBO assumed that the decision 

to change current Army force structure would be independent from a decision on how to obtain logistics services. Because the Army is currently planning to increase 

the number of personnel on active duty even as it relies 

on the LOGCAP contract, CBO believes the Army 

would not change end strength as a result of any decision 

regarding the source of logistics support. 

APPENDIX
92 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

Table E-1.

Comparison of Total Costs Over 20 Years

(Billions of 2005 dollars)

Table E-1. Comparison of Total Costs Over 20 Years

Source: Congressional Budget Office.

Note: LOGCAP = Logistics Civil Augmentation Program; n.a. = not applicable.

a. Onetime costs include the hiring and training of personnel and the acquisition of equipment for additional Army units. Those costs would 

be incurred only in the first year, when the Army decided to provide logistics services in-house.

b. Periodic contingency costs occur in the first year of each contingency operation and include the costs to procure equipment and construct 

facilities needed specifically for that operation.

c. Recurring contingency costs for two five-year contingency periods.

d. Costs for 20 years of routine operations. For existing units, those costs would be included in the Army’s peacetime budget and would not 

be incremental to bringing the logistics functions in-house. For new units, half of those costs would be incurred during contingency 

operations.

e. Not included in the comparison of incremental costs shown in Table 3-5 on page 39.

f. Direct costs are those to provide logistics services excluding the incremental costs of the Army's rotation base.

g. Total costs are those to provide logistics services including the incremental costs of the Army's rotation base.

5.4 35.9 0.1 41.4

1.4 17.1 8.3 e 26.8

1.8 16.5 5.9 24.2 ___ ___ ___ ___

3.2 33.6 14.2 51.0

Costs to provide rotation base

n.a. n.a. 6.3 e 6.3

5.0 n.a. 30.7 35.7 ___ ___ ___ ___

5.0 n.a. 37.0 42.0

Total Army Costs 8.2 33.6 51.2 93.0

-2.2 -2.3 14.1 9.6

2.8 -2.3 51.1 51.6

20-Year

Total

Subtotal, rotation base

Difference in Total Costsg

Difference in Direct Costsf

Existing units

New units

Costs to perform mission

Logistics Support Provided by Army Units

Recurring

Routine

Costsd

Onetimea and

Periodic

Subtotal, direct costs

Recurring

Contingency

Costsc Contingency Costsb

Existing units

New units

Logistics Support Provided by LOGCAP Contractor
Glossary of Abbreviations

AMC: Army Materiel Command

BSC: Balkans Support Contract

C4ISR: command, control, communications, 

computers, intelligence, sensors, and reconnaissance

CENTCOM: U.S. Central Command

C.F.R.: Code of Federal Regulations

CINC: commander in chief

CLS: contractor logistics support

CS: combat support

CSS: combat service support

DBA: Defense Base Act

DMDC: Defense Manpower Data Center

DoD: Department of Defense

FORMIS: Forces, Readiness, and Manpower 

Information System

FRA: Forward Repair Activity (team)

GS: General Schedule

HHC: headquarters and headquarters company

HHD: headquarters and headquarters detachment

IDA: Institute for Defense Analyses

IILS: integrated logistics support

IRR: Individual Ready Reserve

KBR: Kellogg, Brown & Root

LOAC: laws of armed conflict

LOGCAP: Logistics Civil Augmentation Program

MoD: Ministry of Defense (British)

MOS: military occupational specialty
94 LOGISTICS SUPPORT FOR DEPLOYED MILITARY FORCES

NSPS: National Security Personnel System

OEF: Operation Enduring Freedom (Afghanistan)

OIF: Operation Iraqi Freedom

OSMIS: Operating and Support Management 

Information System

PEO: program executive officer

PM: program manager

POM: Program Objective Memorandum

ROM: rough order of magnitude

SBCT: Stryker brigade combat team

SOFA: Status of Forces Agreement

SRC: Standard Requirements Code

TAA: Total Army Analysis

TDA: Table of Distribution and Allowances

TOE: Table of Organization and Equipment

TSA: Transportation Security Administration

TTHS: transients, trainees, holdees, and students

UCMJ: Uniform Code of Military Justice

USAREUR: United States Army Europe