United States General Accounting Office

GAO Briefing Report to Congressional

Requesters

March 1996 BOSNIA

Costs Are Uncertain

but Seem Likely to

Exceed DOD’s

Estimate

G O A

years

1921 - 1996

GAO/NSIAD-96-120BR

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-271377 

March 14, 1996

The Honorable Robert Dole

Majority Leader

United States Senate

The Honorable Robert K. Dornan

Chairman

Subcommittee on Military Personnel

Committee on National Security

House of Representatives

The Department of Defense (DOD) has deployed almost 27,000 troops to

Bosnia and surrounding countries to assist in implementing the Dayton

Peace Accords. U.S. forces are part of a multilateral coalition under North

Atlantic Treaty Organization (NATO) command called the Implementation

Force (IFOR). DOD estimates that the incremental cost1

 of its participation

in IFOR and other operations involving the former Yugoslavia will be

$2.5 billion. In response to your request, we are providing information

about DOD’s cost estimate to assist you in assessing DOD’s requests for

funding. We plan to continue reviewing DOD’s costs and will provide

further reports.

Background The Dayton Peace Accords, signed on December 14, 1995, are designed to

end several years of conflict in the former Yugoslavia. One part of the

accords involves the deployment of a NATO-led coalition force to

Bosnia-Herzegovina, hereafter referred to as Bosnia, to implement the

peace agreement. The purpose of IFOR is to enforce the cessation of

hostilities and provide a secure environment for the other parts of the

peace plan to take place. The United States is a major force provider to

IFOR, and Americans occupy the key NATO military leadership positions that

control the operation. As of February 22, 1996, U.S. forces deployed in

support of IFOR, which included both active and reserve personnel, were

located in four countries and numbered almost 27,000. Of this total, 18,400

military personnel were deployed to Bosnia, 2,000 to Croatia, 5,500 to

Hungary, and almost 1,000 to Italy.

As of February 23, 1996, DOD’s estimate of the incremental cost of

operations in and around the former Yugoslavia was $2.5 billion. DOD’s

1

As used in this report, the term incremental costs are those costs that would not have been incurred

except for the operation. This is the same definition contained in the Omnibus Budget and

Reconciliation Act of 1990 (P.L. 101-508).

Page 1 GAO/NSIAD-96-120BR Bosnia
B-271377 

costs span 2 fiscal years—1996 and 1997. Fiscal year 1996 costs are

estimated at $2 billion and fiscal year 1997 costs are estimated at

$0.5 billion. DOD is currently reevaluating its cost estimate based on the

costs incurred to date.

DOD plans to finance the fiscal year 1996 portion of Bosnia operations in

three phases. The first phase is a request to reprogram $991 million of

previously appropriated funds. The second phase is a request for

supplemental appropriations that the President forwarded to Congress on

February 21, 1996. The President is seeking $820 million in this

request—$620 million for DOD peace operations costs and $200 million for

civilian implementation of the accords. The third phase is another

reprogramming action for the balance of fiscal year 1996 costs and the

costs of other contingency operations unrelated to Bosnia, such as the

U.N. mission in Haiti. DOD has included the fiscal year 1997 cost of the

operation in its fiscal year 1997 budget submission.

In fiscal year 1995, Congress provided DOD with supplemental funding of

$2.2 billion for the incremental costs of contingency operations. Some of

the military services ended fiscal year 1995 with costs in excess of their

share of the supplemental funding, which they had to absorb by reducing

planned activities. Other services ended the fiscal year with costs below

their share of the supplemental funding and used the remaining funds for a

variety of otherwise unfunded operational needs.

Results in Brief DOD’s cost for the Bosnia operation is uncertain at this time, but could very

well exceed DOD’s estimate. The Army’s costs, which are estimated to

represent about two-thirds of the cost of the operation, are likely to

exceed DOD’s estimate, and the Air Force’s costs are likely to be less than

the estimate. At present, deployment transportation and contractor costs

are running significantly above the estimate. DOD estimated that

deployment transportation would cost almost $73 million. Through the

end of January 1996, DOD had incurred about $157 million in deployment

transportation costs. DOD estimated the cost of contractor support at

$192 million. But, through February 1996, the Army, which manages

contractor support and pays the contractor, had obligated over

$247 million. U.S. Army, Europe, officials told us that they believed the

contractor cost could go as high as $500 million.

Several major cost areas remain uncertain. They involve the operating

tempo of forces in Bosnia, the cost of redeploying IFOR, and the cost of

Page 2 GAO/NSIAD-96-120BR Bosnia
B-271377 

reconstituting equipment used in the operation. Army officials stated that

they cannot predict what operating tempo costs will be for the entire

operation because many factors, such as the extent of cooperation of the

warring factions and the pace of operations when spring weather comes

are still unknown. These costs are not likely to come into clearer focus

until spring 1996. Redeployment costs are dependent on a number of

factors that have to be clarified, such as the arrangements for rail travel

originating in Hungary, for which the Army has no previous experience.

Reconstitution costs are also dependent on a number of factors that have

to be clarified, such as the condition of the equipment at the end of the

operation.

Matters for

Congressional

Consideration

Because of the uncertainty in the cost estimate, it is difficult to know how

much funding Congress should provide. Therefore, in considering this

matter, we have identified some guidelines Congress may wish to

consider. One is that any supplemental funding provided should only be

available for (1) expenses incurred in support of contingency operations

involving the former Yugoslavia and (2) the reimbursement of accounts

initially utilized to fund those operations. In fiscal year 1995, some of the

military services ended the year with contingency costs that were below

the amounts provided in supplemental appropriations and used the

remaining funds for other needs that otherwise would have gone

unfunded. A related guideline is that if initial funding proves to be

inadequate, but some services have costs that are below their funded level

while others have costs that are above it, the excess contingency funds

should be redistributed before providing additional funds. DOD’s funding

plan, which involves an initial reprogramming, followed by supplemental

appropriations, and then a second reprogramming for any remaining costs,

would lend itself to redistributing funds in the second reprogramming.

This second reprogramming would also lend itself to another funding

guideline—reevaluating the appropriation level as more experience and

actual cost data become available.

Scope and

Methodology

To assess DOD’s estimate of the cost of the Bosnia operation, we reviewed

detailed cost information at the Office of the Secretary of Defense,

Comptroller. We discussed the assumptions that were made to develop the

estimate with DOD Comptroller and service officials. To compare actual

experience and costs incurred to date with the estimate, we held

discussions and reviewed data at the U.S. Transportation Command, the

Air Mobility Command, the U.S. European Command, U.S. Army, Europe,

Page 3 GAO/NSIAD-96-120BR Bosnia
B-271377 

the Army’s Forces Command, U.S. Air Forces, Europe, and the Air Force’s

Air Combat Command. We were not able to assess Navy costs in the time

available and chose to examine those costs at a later date because they

represented less than 5 percent of the estimate.

To review the funding plan for the operation, we reviewed DOD’s request

for reprogramming funds. We also reviewed the President’s February 21,

1996, submission to Congress requesting supplemental appropriations.

We performed our review between December 1995 and February 1996 in

accordance with generally accepted government auditing standards. We

reviewed the information in this briefing report with DOD officials and

made changes where appropriate.

We are providing copies of this report to the Chairmen and Ranking

Minority Members of the House and Senate Committees on

Appropriations, the House Committee on National Security, and the

Senate Committee on Armed Services. We will also send copies to the

Secretaries of Defense, the Air Force, the Army, and the Navy and the

Director, Office of Management and Budget. Copies will also be made

available to others on request.

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

at (202) 512-3504. The major contributors to this report are listed in

appendix I.

Richard Davis

Director, National Security

 Analysis

Page 4 GAO/NSIAD-96-120BR Bosnia
Page 5 GAO/NSIAD-96-120BR Bosnia
Contents

Letter 1

Briefing Section I 

Background

8

United States Has Major Role in Bosnia Peace Implementation 8

Estimated Cost of Operations in and Around the Former

Yugoslavia

10

Cost Estimate by Service and Appropriation Account 12

Deployment Transportation 14

Briefing Section II 

Operation and

Maintenance Costs

16

LOGCAP 16

Joint STARS 18

Air Force Costs 20

Key Costs Remain Uncertain 22

Briefing Section III 

Military Personnel

Costs

24

Special Pays 24

Reserve Activation Salary Costs 26

Briefing Section IV 

Funding

28

Funding Implications 28

DOD’s Funding Plan 30

Matters for Congressional Consideration 32

Appendix I 

Major Contributors to

This Report

34

Abbreviations

DOD Department of Defense

IFOR Implementation Force

LOGCAP Logistics Civil Augmentation Plan

NATO North Atlantic Treaty Organization

O&M operation and maintenance

OPTEMPO operating tempo

STARS Surveillance Target Attack Radar System

Page 6 GAO/NSIAD-96-120BR Bosnia
Page 7 GAO/NSIAD-96-120BR Bosnia
Briefing Section I 

Background

GAO United States Has Major Role in Bosnia 

Peace Implementation

Dayton Peace Accords--Three-Part 

Strategy

NATO-led implementing military force

Major economic redevelopment 

program

Military stabilization effort

The Dayton Peace Accords, signed on December 14, 1995, are designed to

end several years of conflict in the former Yugoslavia. The accords contain

a three-part strategy.

One part is the deployment of a North Atlantic Treaty Organization

(NATO)-led coalition force to Bosnia-Herzegovina, hereafter referred to as

Bosnia, to implement the peace agreement. The purpose of this

Implementation Force (IFOR) is to enforce the cessation of hostilities and

Page 8 GAO/NSIAD-96-120BR Bosnia
Briefing Section I 

Background

provide a secure environment for the other parts of the peace plan to take

place. The accords call for IFOR to provide a secure environment for 1 year

in order to provide “breathing space” or a “cooling off period” after 

4 years of war.

Both NATO and non-NATO forces are participating in this action under U.N.

authorization. The United States is a major force provider to IFOR, and

Americans occupy the key NATO military leadership positions that are

responsible for the operation. As of February 22, 1996, U.S. forces

deployed in either direct or indirect support of IFOR were located in 4

countries and numbered 26,860. Of this total, 18,421 military personnel

were deployed to Bosnia, 2,035 to Croatia, 5,453 to Hungary, and 951 to

Italy.

The key military tasks in Bosnia are to mark and monitor a 4-kilometer

wide zone of separation between the three factions, patrol the zone of

separation, and oversee the withdrawal of forces and weapons away from

the zone and back to their cantonment areas.

A second part of the peace strategy is to establish a functioning

government and economy, which includes a major economic

redevelopment program, to be lead by the Europeans. This effort will

include supervising elections, resettling refugees, and overseeing

economic reconstruction.

The third part is a military stabilization effort in which forces will be

drawn down and an arms control program will be established. The

purpose of this effort is to ensure that the parties to the peace agreement

can assure their own safety when IFOR leaves. The U.S. military is assisting

in this effort by participating in activities such as the arms embargo.

However, establishing the military force balance is not a task of NATO or

U.S. forces. The United States has said that it is prepared to take actions in

concert with other nations to ensure that this balance is achieved.

Page 9 GAO/NSIAD-96-120BR Bosnia
Briefing Section I 

Background

GAO Estimated Cost of Operations in and 

Around the Former Yugoslavia

Operation 1996 1997

IFOR-Ops $1,536.5 $474.2 $2,010.7

Deny Flight 260.4 66.3 326.7

IFOR-Prep 113.8 0 113.8

Provide Promise 17.7 0 17.7

Sharp Guard 14.0 0 14.0

Able Sentry 4.5 1.2 5.7

United Nations in 

Croatia

 1.2 0 1.2 

Total $1,948.1 $541.7 $2,489.8

Dollars in millions Fiscal year

Source: DOD Comptroller.

Page 10 GAO/NSIAD-96-120BR Bosnia
Briefing Section I 

Background

The Department of Defense (DOD) has seven operations that support U.S.

and U.N. activities in and around the former Yugoslavia. These operations,

and their missions, are as follows.

• IFOR Operations, called Joint Endeavor by DOD, is the peace operation

implementing the accords.

• Deny Flight, now called Decisive Endeavor by DOD, involves air operations

maintaining the no-fly zone over Bosnia.

• IFOR Preparation involves preparing U.S. troops for IFOR deployment.

• Sharp Guard continues the enforcement of the arms embargo and U.N.

sanctions on Serbia-Montenegro, which is expected to end this summer.

• Able Sentry provides U.S. forces for U.N. peacekeeping activities in

Macedonia to deter against widening of the Balkan conflict.

• Provide Promise is the airlift and airdrop of humanitarian supplies into

Bosnia, and it is expected to end in March 1996.

• United Nations in Croatia provides U.S. military personnel and supplies for

the operation of the Zagreb hospital in support of the United Nations.

IFOR and the preparation for it are by far the largest operations,

representing about 85 percent of DOD’s estimated costs. The next largest

operation is the continuation of Deny Flight, representing about 13 percent

of estimated costs.

Page 11 GAO/NSIAD-96-120BR Bosnia
Briefing Section I 

Background

GAO Cost Estimate by Service and 

Appropriation Account

O&M

fiscal year 

1996

O&M

fiscal year 

1997

Military 

personnel 

fiscal year 

1996

Military 

personnel 

fiscal year 

1997

Total

Army $985.0 $340.4 $262.3 $48.1 $1,635.8

Navy 74.0 16.6 11.8 3.6 106.0

Marine 

Corps 1.1 .2 2.7 .8 4.8

Air Force 322.3 74.7 33.7 8.0 438.7

Other 229.2 49.3 0 0 278.5

Total $1,611.6 $481.2 $310.5 $60.5 $2,463.8

a

Dollars in millions

aDoes not include $26 million in fiscal year 1996 Air Force procurement.

Source: DOD Comptroller.

Page 12 GAO/NSIAD-96-120BR Bosnia
Briefing Section I 

Background

As of February 23, 1996, DOD’s estimate of the incremental cost of

operations in and around the former Yugoslavia was $2.5 billion. DOD’s

costs span 2 fiscal years—1996 and 1997. Fiscal year 1996 costs are

estimated at $2 billion and fiscal year 1997 costs are estimated at

$0.5 billion.

Fiscal year 1996 costs include training for troops designated to deploy in

and around Bosnia; deployment of forces; sustainment of those forces,

including contractor support; operating tempo; and military pay costs such

as imminent danger pay and reserve activation. Fiscal year 1997 costs

include continuation of operations underway in 1996; redeployment of

U.S. forces and reserve deactivation at the conclusion of the operation;

and reconstitution of equipment used in the operation.

The Army, which is deploying and logistically supporting ground troops in

and around Bosnia, is estimated to incur the majority of the costs—

$1.6 billion, or two-thirds of all estimated costs. Of this amount, $1.2

billion is for fiscal year 1996 and $0.4 billion for fiscal year 1997. The Air

Force has the next largest share of costs—almost one-fifth, or

$465 million, most of it in fiscal year 1996. Together the Navy and the

Marine Corps have the smallest share, less than 5 percent, or $111 million.

The other estimated costs are spread over a number of defensewide

agencies, such as the U.S. Special Operations Command and the Defense

Health Program.

Most of the estimated cost—84 percent—is in the operation and

maintenance (O&M) appropriations account. This account pays for items

such as transportation, per diem, supplies, fuel, communications,

contractual services, equipment maintenance, and other mission-related

expenses. Most of the remaining 16 percent is in the military personnel

appropriations account. This account funds incremental military pay, such

as imminent danger pay, family separation allowance, certain places pay

(formerly called foreign duty pay), and basic allowance for subsistence for

enlisted personnel as well as the military pay for activated reservists.

Page 13 GAO/NSIAD-96-120BR Bosnia
Briefing Section I 

Background

GAO Deployment Transportation 

DOD's deployment estimate $ 73

Costs through January 157

Costs in excess of DOD's 

estimate 84

Dollars in millions

Transportation costs for deploying U.S. military forces participating in IFOR

are exceeding DOD’s estimate. DOD estimated that deployment

transportation would cost $73 million, with the largest

portion—$58 million—for the Army. Through the end of January 1996, DOD

had incurred at least $157 million in deployment transportation costs,

$84 million more than estimated.

Page 14 GAO/NSIAD-96-120BR Bosnia
Briefing Section I 

Background

Both the costs of ground transportation and airlift are significantly higher

than estimated. The Army assumed that the IFOR deployment would be a

major ground one with heavy use of rail transportation and limited airlift

support. Through January, the Army had incurred ground deployment

transportation costs of $75 million, or $17 million more than the DOD

estimate. Airlift costs, which DOD and the Army had assumed would be

several million dollars, are almost equaling ground transportation costs.

According to Air Mobility Command data collected through January 1996,

the Command had flown about 1,486 missions, or 12,668 hours, in support

of IFOR at an estimated cost of $82 million. The majority of this airlift was

in support of the Army. Since the original estimate assumed limited airlift,

a major portion of the $84 million difference between the DOD estimate and

the incurred costs represents airlift support.

As noted above, DOD originally assumed primary reliance on ground

transportation. However, DOD officials told us that to oversee the strict

time lines contained in the accords, which call for the factions in the

former Yugoslavia to cease various military activities within a specified

number of days after the accords were signed, beginning with actions on

the first day of the signing, deployment had to proceed rapidly. Rapid

deployment requirements and unexpected problems with ground

transportation caused the Army to rely more heavily on airlift.

Some of the ground transportation problems included the impact of

weather conditions, the fact that the deployment began around the

Christmas holiday, and the French rail strike. Weather conditions, for

example, affected construction of a bridge over the Sava River to conduct

the deployment operation. An unexpected winter thaw resulted in major

flooding and this bridge project became much larger than originally

envisioned. The Army had to use construction material intended to build

two spans over the Sava River to build the first span. Because of the

holiday time of the year, the European rail system was heavily involved in

holiday passenger and commercial traffic and rail employees were taking

holiday vacations. European rail did not respond to the IFOR deployment,

which it did not view as a wartime operation, with the sense of urgency it

would have for a wartime operation. A rail strike in France further

complicated ground transportation because many large rail cars needed

for the deployment could not be moved from France to Germany.

Page 15 GAO/NSIAD-96-120BR Bosnia
Briefing Section II 

Operation and Maintenance Costs

GAO LOGCAP

DOD estimate $192

Costs through 

February

247

Contractor estimate as 

of mid-February

422

 Army projection 500

Dollars in millions

The Logistics Civil Augmentation Program (LOGCAP) uses a civilian

contractor to perform selected engineering and logistics services during

contingency operations to augment U.S. forces. In Bosnia, Croatia, and

Hungary, the contractor is providing many of the basic services to support

the military personnel, including troop housing and facilities, food service,

and laundry operations. The contractor is also providing base camp and

equipment maintenance, shuttle bus services within camps, and freight

transport throughout the area of operations.

Page 16 GAO/NSIAD-96-120BR Bosnia
Briefing Section II 

Operation and Maintenance Costs

DOD estimated the cost of LOGCAP at $191.6 million—$167 million in fiscal

year 1996 and $24.6 million in fiscal year 1997. The contractor had

originally estimated the LOGCAP cost at $350 million, but DOD reduced the

estimate to $191.6 million because it believed that there was duplication

between the services the contractor would provide and the services

military personnel would provide. Through February 1996, the Army,

which manages LOGCAP and pays the contractor, had obligated

$247.3 million for LOGCAP, or $55.7 million more than DOD estimated for the

entire IFOR operation.

Estimated LOGCAP costs have been rising rapidly. The original contractor

estimate of $350 million was developed before U.S. personnel were

allowed into Bosnia. At the end of January 1996, the contractor was

estimating that total LOGCAP costs would be $371 million, whereas by the

week ending February 10, 1996, the contractor’s cost estimate was

$422 million. Army officials in Europe told us that they thought the cost

could be as high as $500 million.1

Since U.S. personnel were not allowed into Bosnia before the operation

started, the conditions on the ground were unknown. According to Army

officials in Europe, actual ground conditions have increased contractor

requirements. The geography of the U.S. sector in Bosnia and force

protection concerns did not allow for the 10 to 12 large base camps

originally planned and so the number of camps has increased to 23. The

number of feeding locations also increased from the 12 originally planned

to 24. Muddy ground conditions and the increased number of camps

required more extensive site preparation and construction, which cost

more than originally anticipated.

The Army is working to control LOGCAP costs. It is instituting a procedure

to ensure that tasks being performed by the contractor are within the

statement of work and that no additional LOGCAP requirements are tasked

to the contractor until costs are determined and potential trade-offs are

identified.

1

We have not had the opportunity to independently evaluate the reasonableness of these estimates.

Page 17 GAO/NSIAD-96-120BR Bosnia
Briefing Section II 

Operation and Maintenance Costs

GAO Joint STARS

DOD's estimate $20

Services' estimate 59

Shortfall 39

Dollars in millions

Page 18 GAO/NSIAD-96-120BR Bosnia
Briefing Section II 

Operation and Maintenance Costs

The Joint Surveillance Target Attack Radar System (Joint STARS) is a joint

Army and Air Force program that provides near-real-time surveillance and

targeting information on moving and stationary ground targets, slow

moving aircraft, and rotation antennas. The system consists of aircraft, for

which the Air Force is responsible, and ground station modules, for which

the Army is responsible.

The DOD estimate of $20 million for Joint STARS is $39 million below the

latest Air Force and Army cost estimates. In its estimate, DOD included

$20 million for the Air Force to deploy Joint STARS for 60 days, but it did

not include any Joint STARS costs for the Army. As of February 1996, the

Joint STARS deployment had been extended another 60 days, and the

current Air Force and Army estimates for Joint STARS now total $59 million.

Air Force costs are estimated to increase by $29 million. Due to the

deployment extension, the Air Force estimates that Joint STARS

deployment will cost an additional $17 million. In addition, post

deployment and refurbishment activities costs, which were not included in

the DOD estimate, are estimated to be $12 million.

The Army estimates that it will have $10 million in costs for the ground

station modules, Joint STARS contract, and all logistics support for Joint

STARS.

Page 19 GAO/NSIAD-96-120BR Bosnia
Briefing Section II 

Operation and Maintenance Costs

GAO Air Force Costs

Costs much less than estimated

Per diem costs overestimated

Flying hours reduced

Aircraft returned to home stations

Page 20 GAO/NSIAD-96-120BR Bosnia
Briefing Section II 

Operation and Maintenance Costs

Air Force costs to support Bosnia operations may be significantly less than

originally estimated. Per diem costs are less than planned, the estimated

number of flying hours has decreased, and aircraft are being redeployed to

their home stations.

DOD’s per diem and transportation cost estimates for Air Force personnel

assigned to Bosnia operations for fiscal year 1996 were originally

estimated to be $128 million. The Air Force currently estimates that those

costs will be $89 million, or $39 million less than the DOD estimate.

Because security conditions in Bosnia have been more stable than

originally anticipated, the number of flying hours needed to support

operations has been reduced. For example, U.S. Air Force, Europe,

reduced its estimate of flying hours for Deny Flight by 1,900 hours. In

addition, some aircraft deployed to support Bosnia operations have

redeployed to their home stations.

Page 21 GAO/NSIAD-96-120BR Bosnia
Briefing Section II 

Operation and Maintenance Costs

GAO Key Costs Remain Uncertain

OPTEMPO costs will not become clear 

until spring 1996

Planning for redeployment just beginning 

More reliable estimates of reconstitution 

costs may not be available for several 

months

Several major cost areas remain uncertain. They involve the operating

tempo of forces in Bosnia, the cost of redeployment at IFOR’s conclusion,

and the cost of reconstituting equipment used in the operation.

In its estimate, DOD assumed Army operating tempo (OPTEMPO) would cost

$217 million, based on 1.5 times greater than normal operations for ground

forces and 2 times higher for aviation forces. According to Army officials,

units reported through January that their OPTEMPO was running ahead of

Page 22 GAO/NSIAD-96-120BR Bosnia
Briefing Section II 

Operation and Maintenance Costs

the estimate; however, they stated that this higher rate may simply reflect

early initial activity. They said that they cannot predict what the OPTEMPO

costs will be for the entire operation because many factors could affect

these costs. These factors include the extent of cooperation of the warring

factions in Bosnia; changes in OPTEMPO as the operation reached a “steady

state” in February; changes with the advent of spring weather; and cost

offsets resulting from lower usage of equipment that was left in Germany.

More reliable OPTEMPO cost estimates will not be available until the spring

of 1996.

In developing its cost estimate, DOD assumed that redeployment would

occur in November and December 1996, which is in the first quarter of

fiscal year 1997. It estimated that redeployment and reserve deactivation

costs would total $61 million, with the bulk being redeployment costs. The

Army is just beginning redeployment planning and assumes that

redeployment will begin this summer. While earlier redeployment could

decrease the overall operation cost, it would shift costs planned for fiscal

year 1997 into fiscal year 1996, affecting 1996 funding needs.

Redeployment costs are dependent on a number of factors that have to be

clarified. For the IFOR deployment, which originated in Germany, all rail

arrangements were handled by the German railway. For redeployment, rail

movement will originate outside Germany, for example in Hungary, and

pass through several other countries, such as Austria. The Army has no

experience with rail movements beginning in Hungary and no rate

agreements. Hungary and Austria also have much higher rail rates than

does Germany—as much as 250 percent higher. The United States is

engaged in negotiations to obtain more favorable rates. On the other hand,

the Army is exploring the use of barges for redeployment, which would be

significantly cheaper albeit slower than rail. The waterways in the former

Yugoslavia at the time of the deployment had not been dredged for several

years and contained war debris, not permitting barge movement.

DOD estimated that the cost of reconstituting equipment would be

$70 million. It based this estimate on experience in earlier contingency

operations. These operations occurred in different climates, and the

OPTEMPO in Bosnia may differ significantly from earlier operations. As in

the case of the OPTEMPO estimate, it may be several months before

reconstitution costs are better defined. Army officials stated that they have

not attempted to reevaluate the reconstitution cost estimate.

Page 23 GAO/NSIAD-96-120BR Bosnia
Briefing Section III 

Military Personnel Costs

GAO Special Pays

DOD's estimate may be overstated by almost 

$43 million because

DOD overestimated number of personnel to 

receive all special pays,

up to 7,000 personnel are not eligible for 

imminent danger pay,

40 percent of enlisted personnel are not eligible 

for family separation allowance, and

officers are not eligible for certain places pay.

Page 24 GAO/NSIAD-96-120BR Bosnia
Briefing Section III 

Military Personnel Costs

Military personnel deployed to support the Bosnia operation are eligible to

receive certain special pays—imminent danger pay, certain places pay,

and family separation pay—if specific criteria are met. Enlisted personnel,

if they do not receive basic allowance for subsistence when at their home

station, are eligible to receive it when they deploy. DOD estimated that

special pays would total $109 million. Actual eligibility for special pays has

differed from DOD’s assumptions about eligibility, which could result in an

overstatement of DOD’s estimate by about $43 million.

In calculating the special pays amount, DOD used a composite figure of

$322 a month a troop and assumed that all deployed personnel would

receive this amount. This amount included $150 for imminent danger pay,

$75 for family separation pay, and an average figure of $20 for certain

places pay. It also included $77 per month to reflect the amount those

eligible for additional basic allowance for subsistence would receive.

Not all personnel, however, are eligible for all of these special pays. Only

those personnel deployed to, traveling into, or flying over Bosnia, Croatia,

Serbia, Montenegro, and Macedonia are eligible to receive imminent

danger pay. This excludes most of the 7,000 personnel scheduled to be

deployed to Hungary and Italy. In addition, only enlisted personnel

deployed to the countries eligible for imminent danger pay and Hungary

are eligible to receive certain places pay, which excludes all officers and

those enlisted personnel deployed to places other than these countries,

such as Italy. Furthermore, only those personnel with dependents are

eligible to receive family separation pay, which excludes at least an

estimated 40 percent of enlisted personnel who have no dependents.

Page 25 GAO/NSIAD-96-120BR Bosnia
Briefing Section III 

Military Personnel Costs

GAO Reserve Activation Salary Costs

DOD's estimate of $196 million may be overstated 

by over $20 million because

reserve callup is less than planned,

volunteers exceed estimate, and

total reserves are less than estimate.

Activation costs may be offset if reservists called to 

active duty do not attend annual training.

Page 26 GAO/NSIAD-96-120BR Bosnia
Briefing Section III 

Military Personnel Costs

The President, using his Selected Reserve Callup authority, authorized the

activation of up to 4,300 reservists to support operations in Bosnia. The

4,300 reservists and an additional estimated 300 volunteers were used to

calculate the incremental military personnel salary cost of $196 million

estimated for the Bosnia operation. Based on the deployment to date, this

amount appears to be overstated by over $20 million. In developing its cost

estimate, DOD expected that all reservists would attend their annual

training exercises, which may not be the case. If all reservists do not

attend their annual training, reserve military personnel accounts will not

incur as much as another $8.5 million in costs.

As of February 22, 1996, 3,475 reservists had been mobilized, and

according to DOD Reserve Affairs officials, the first reserve rotation is in

place. Additionally, about 960 volunteers have been deployed, which is

significantly above the 300 included in the estimate. While DOD Reserve

Affairs officials say this number probably will not be sustained over the

long term, there may be as many as 785 reserve volunteers deployed for

the length of the operation.

Fewer reservists have been called up than were authorized, but more

reservists have volunteered for active duty. It appears that between 165

and 340 fewer reservists will be on active duty than was assumed. Using

DOD assumptions and actual deployment figures, we estimate that the

salary costs for the reserve activation, including volunteers, could be over

$20 million less than DOD estimated.

DOD officials expect that all reservists will attend their 2-week annual

training because they will need to receive the planned skill and unit

training. However, this may be unrealistic, given that reservists who have

been deployed for up to 270 days may find it difficult to be absent from

their regular employment for another 2 weeks or they may be deployed

during their unit’s annual training time. The decision to allow a reservist to

miss annual training rests with the individuals and their commanders. We

estimate that if all reservists are excused from their annual training, the

estimated cost of reserve activation could be offset by as much as

$8.5 million. Since annual training is funded by the reserves’ military

personnel accounts, if funds set aside for their annual training are not

transferred to other service accounts, reserve accounts will have as much

as $8.5 million available for other expenditures.

Page 27 GAO/NSIAD-96-120BR Bosnia
Briefing Section IV 

Funding

GAO Funding Implications

Services initially shift funds budgeted for 

later in the year.

Army estimates that it will run out of 

discretionary OPTEMPO funds in June.

Page 28 GAO/NSIAD-96-120BR Bosnia
Briefing Section IV 

Funding

Through fiscal year 1996, DOD has not budgeted for the cost of contingency

operations such as the one in Bosnia.1

 It has budgeted to be ready to

conduct such operations. When the services conduct such operations they

initially have had to shift funds within existing appropriations. This is

primarily done by using funds available for the same purpose but

scheduled for obligation later in the fiscal year. Subsequently, DOD has

often sought supplemental appropriations or reprogramming of already

appropriated funds to cover its costs.

DOD is currently financing its Bosnia operation by using funds expected to

be used later in the fiscal year. The Army, which has the highest costs,

projects that it will run out of discretionary OPTEMPO funds in June 1996 if

it does not receive additional funding. According to Army officials, if this

happens some units will have to suspend training among other activities.

Army officials further stated that if additional funding is not provided soon

they will have to curtail training beginning in April.

1

The Air Force has included funds in its military personnel appropriation account for the payroll cost

of reserve volunteers participating in contingency operations.

Page 29 GAO/NSIAD-96-120BR Bosnia
Briefing Section IV 

Funding

GAO DOD's Funding Plan

Three-phase plan

$991 million in reprogramming

$620 million supplemental

Second reprogramming for balance of 

funding needs

Page 30 GAO/NSIAD-96-120BR Bosnia
Briefing Section IV 

Funding

DOD is planning to finance the fiscal year 1996 portion of Bosnia operations

using a three-phase plan. The first phase is a request to reprogram

$991 million of appropriated funds. DOD also proposes to use its fiscal year

1996 general transfer authority under section 8005 of the fiscal year 1996

DOD Appropriations Act (P.L. 104-61). The reprogramming request was

submitted to the relevant congressional committees on January 21, 1996.

DOD proposes to use savings from lower than estimated economic

assumptions regarding inflation.

The second phase is a request for supplemental appropriations that the

President forwarded to Congress on February 21, 1996. The President is

seeking $820 million in this request—$620 million for DOD peace

operations costs and $200 million for civilian implementation of the

Dayton Peace Accords. The President proposes to fully offset the

requested increases in appropriations by rescissions from funds previously

appropriated to DOD for a classified program with funds that are in excess

of DOD’s requirements. Most of the $200 million for civilian purposes would

be available to the U.S. Agency for International Development for

economic revitalization, police monitors and training, and demining

assistance. The remainder would go to the Department of State, the U.S.

Agency for International Development, and the U.S. Information Agency

for administrative costs. On March 7, 1996, the House of Representatives

approved legislation providing $820 million in supplemental funding for

DOD operations in Bosnia and an additional $197 million for civilian

implementation of the accords. On March 13, 1996, similar legislation was

before the Senate.

The third phase is an expected second reprogramming action for the

balance of fiscal year 1996 Bosnia operation costs and the costs of other

contingency operations unrelated to Bosnia, such as the U.N. mission in

Haiti. This second request is estimated to be for $560 million. DOD has

included the fiscal year 1997 portion of the operation in its fiscal year 1997

budget submission.

Page 31 GAO/NSIAD-96-120BR Bosnia
Briefing Section IV 

Funding

GAO Matters for Congressional 

Consideration

Funding requirements unclear

Possible funding guidelines are

restrict supplemental funding to contingency 

operations,

reallocate funds across services if possible, and

reevaluate funding as more experience and actual 

data become available.

Page 32 GAO/NSIAD-96-120BR Bosnia
Briefing Section IV 

Funding

As stated previously, DOD is planning to finance the Bosnia operation using

a three-phase plan. Because of the uncertainty in the cost estimate it is

difficult to know how much funding Congress should provide. Therefore,

in considering this matter, we have identified the following guidelines

Congress may wish to consider.

• Any supplemental funding provided should only be available for

(1) expenses incurred in support of contingency operations involving the

former Yugoslavia and (2) the reimbursement of accounts initially utilized

to fund those operations. In fiscal year 1995, some of the military services

ended the year with contingency costs below the amounts appropriated by

Congress for contingency operations in that year, while other services had

costs that exceeded those appropriations. Because the supplemental

appropriations were not earmarked for contingency operations, those

services with excess funds used the funds for other needs that otherwise

would have gone unfunded.

• If initial contingency operation funding proves to be inadequate, but some

services have costs below their funded level while others have costs above

it, excesses earmarked for contingencies should be redistributed by

transfer before Congress provides additional funds. DOD’s funding plan,

which involves an initial reprogramming, followed by supplemental

appropriations, and then a second reprogramming for any remaining costs,

would lend itself to transferring funds at the time of the second

reprogramming.2

• Appropriation levels should be reevaluated as more experience and actual

cost data become available. The second reprogramming in DOD’s Bosnia

funding plan would lend itself to such a reevaluation.

2

Section 8005 of the fiscal year 1996 DOD Appropriations Act provides transfer authority of up to

$2.4 billion in case it is necessary to move funds between accounts.

Page 33 GAO/NSIAD-96-120BR Bosnia
Appendix I 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Steven H. Sternlieb, Assistant Director

Ann Borseth, Evaluator

Lisa M. Quinn, Evaluator

James F. Reid, Evaluator

Office of the General

Counsel

Margaret L. Armen, Attorney-Adviser

Norfolk Field Office Suzanne Wren, Evaluator

Kansas City Field

Office

John G. Wiethop, Evaluator

David J. Henry, Evaluator

(701080) Page 34 GAO/NSIAD-96-120BR Bosnia
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 6015

Gaithersburg, MD 20884-6015

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (301) 258-4066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100