Report to Congressional Requesters

United States Government Accountability Office

GAO

July 2004 MILITARY 

OPERATIONS 

DOD’s Extensive Use 

of Logistics Support 

Contracts Requires 

Strengthened 

Oversight 

GAO-04-854 
www.gao.gov/cgi-bin/getrpt?GAO 04-854.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Neal Curtin, 

757-552-8100, curtinn@gao.gov. 

Highlights of GAO-04-854, a report to the 

Ranking Minority Member, House 

Committee on Government Reform, and 

the Ranking Minority Member, House 

Committee on Energy and Commerce 

July 2004

MILITARY OPERATIONS 

DOD's Extensive Use of Logistics 

Support Contracts Requires 

Strengthened Oversight 

The effectiveness of DOD’s planning to use the logistics support contracts 

during contingency operations varies widely between the commands that 

use them and the contracts themselves. In many cases, planning was done 

effectively, in close coordination with the respective contractors. For 

LOGCAP, however, the Army Central Command did not develop plans to use 

the contract to support its military forces in Iraq until May 2003, even though 

Army’s LOGCAP guidance calls for early planning and early involvement of 

the contractor. Those plans, moreover, have undergone numerous changes 

since that initial planning. In Kuwait, as well, the Army has made frequent 

changes in its use of LOGCAP. 

DOD’s contract oversight processes were generally good, although there is 

room for improvement. DOD customers have not always ensured that 

contractors provide services in an economic and efficient manner, although 

they have a responsibility to do so. We have found that when the customer 

reviews the contractor’s work for economy and efficiency, savings are 

realized, as illustrated in the table below. Under the LOGCAP contract, 

months-long delays in definitizing contract task orders have frequently 

undermined the contractor’s cost-control incentives, and the absence of an 

Army award fee board to comprehensively evaluate the contractor’s 

performance has further limited DOD’s oversight. 

Savings Reported through DOD’s Review of Contract Activities 

Contract 

Percent 

savings Comments 

Balkans Support Contract 10 Savings of $200 million based on current 

contract ceiling price of $2.098 billion 

LOGCAP (Djibouti) 18 Savings of $8.6 million from estimated $48 

million in work 

LOGCAP (Kuwait) 43 Savings of $31 million annually based on change 

in food service contractor 

Sources: DOD (data); GAO (analysis). 

DOD did not have sufficient numbers of trained personnel in place to 

provide effective oversight of its logistics support contractors. The Army has 

deployed units responsible for supporting the LOGCAP contract, but some of 

the personnel have little knowledge of the contract. The Air Force did not 

consistently train evaluators to monitor its logistics support contractor’s 

performance. Military units across the services receiving contractor support 

have lacked a comprehensive understanding of their roles and 

responsibilities, which include establishing the work to be done by 

contractors and monitoring contractors’ performance. 

In its contingency operations since 

the early 1990s, the Department of 

Defense (DOD) has relied 

extensively on logistics support 

contractors to provide many of the 

supplies and services needed by 

deployed U.S. forces. As requested, 

GAO assessed DOD’s planning in 

its use of logistics support 

contracts in contingency 

operations; determined whether 

DOD has had contract oversight 

processes that are adequate to 

ensure that quality services were 

provided in an economical and 

efficient manner; and assessed the 

extent to which DOD provided 

trained personnel qualified to 

oversee its contractors. GAO 

focused its efforts on four logistics 

support contracts chosen because 

of their size and chosen to 

represent more than one military 

service—the Army’s Logistics Civil 

Augmentation Program (LOGCAP) 

and Balkans Support Contract, the 

Navy’s Construction Capabilities 

Augmentation Program, and the Air 

Force’s Contract Augmentation 

Program. 

GAO is making a number of 

recommendations to the Secretary 

of Defense to improve planning, 

establish procedures to assure that 

the contractors are performing as 

economically and efficiently as 

possible, and develop training 

programs for personnel responsible 

for using and managing logistics 

support contracts. DOD agreed 

with the report and all its 

recommendations. 
Page i GAO-04-854 Military Operations 

Letter 1

Results in Brief 2

Background 6

Planning for the Use of Contractor Support Varied Widely 14

Contract Oversight Processes Were Generally Good but Not 

Always Properly Implemented 20

The Military Services’ Efforts to Ensure That Contractors Perform 

in an Economical, Efficient, and Cost Conscious Manner Vary 

Widely 34

DOD Did Not Always Have Enough Personnel to Manage Its 

Logistics Support Contracts, and Available Personnel Often Lack 

the Training to Effectively Use and Monitor the Contract 42

Conclusions 48

Recommendations for Executive Action 49

Agency Comments and our Evaluation 50

Appendix I Scope and Methodology 53 

Appendix II Comments from the Department of Defense 59 

Appendix III Comments from Readiness Management Support 

L.C. 63 

Appendix IV GAO Contact and Staff Acknowledgments 68 

Tables 

Table 1: Contract Information on Logistics Support Contracts 8

Table 2: Key Contract Management Roles and Responsibilities 12

Table 3: Information on the 10 Oldest Undefinitized LOGCAP Task 

Orders 30

Contents 
Page ii GAO-04-854 Military Operations 

Figures 

Figure 1: Selected Countries and Possessions Where AFCAP, 

CONCAP, LOGCAP, and BSC Are Being Used As of May 

2004 6

Figure 2: Iraq In Relationship to the United States 9

Figure 3: Some Factors That Can Influence Costs of Logistics 

Support Contracts 11

Figure 4: Overview of the Task Order Process 13

Abbreviations 

AFCAP Air Force Contract Augmentation Program 

BSC (U.S. Army, Europe) Balkans Support Contract 

CJTF Combined Joint Task Force 

CONCAP (Navy) Construction Capabilities Contract 

DCMA Defense Contract Management Agency 

DOD Department of Defense 

GAO Government Accountability Office 

LOGCAP (Army) Logistics Civil Augmentation Program 

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Page 1 GAO-04-854 Military Operations 

July 19, 2004 

The Honorable Henry A. Waxman 

Ranking Minority Member 

Committee on Government Reform 

House of Representatives 

The Honorable John D. Dingell 

Ranking Minority Member 

Committee on Energy and Commerce 

House of Representatives 

The U.S. military has long used contractors to provide supplies and 

services to deployed U.S. forces. Since the early 1990s, much of this 

support has come from logistics support contracts—contracts that are 

awarded prior to the beginning of contingencies and are available to 

support the troops as needed. These contracts are currently being used by 

the services in more than half a dozen countries, including Iraq, to provide 

a wide array of support, such as food service and housing. The contract 

support in Iraq is the largest effort in the history of such contracts. While 

these contracts provide vital services, they are expensive. The estimated 

value of the work under the current contracts we examined is $12 billion, 

including $5.6 billion for work in Iraq as of May 2004. Some of the factors 

that affect costs are (1) the requirements that must be met from food 

service to housing, to name just a few; (2) the conditions under which the 

services must be provided, such as the security situation in Iraq; and 

(3) the adequacy of government oversight. 

You asked us to (1) assess the effectiveness of the Department of 

Defense’s (DOD) planning for the use of logistics support contracts in 

contingency operations; (2) assess the adequacy of DOD’s contract 

oversight processes; (3) determine if the contracts are being used in an 

economical, efficient, and cost-conscience manner; and (4) assess the 

extent to which DOD had qualified personnel in place with the training 

and skills necessary to provide effective contract oversight. As discussed 

with your offices, we focused our efforts on four contracts: (1) the Army 

Logistics Civil Augmentation Program (LOGCAP) Contract; (2) the Air 

Force Contract Augmentation Program (AFCAP) Contract; (3) the U.S. 

Army, Europe, Balkans Support Contract (BSC); and (4) the Navy 

Construction Capabilities (CONCAP) Contract. The Army’s LOGCAP 

contract is by far the largest of these contracts. The contractors for these 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-04-854 Military Operations 

contracts and the military services have, for the most part, worked 

together to meet the customers’ needs in sometimes hazardous or difficult 

circumstances. 

In conducting our work, we examined a wide range of contract documents 

and contracting guidance and met with contracting officers; contract 

customers; and the contractors to gain a comprehensive understanding of 

the contracts, the contract management process, and issues related to 

using the contracts. We visited U.S. military sites using the LOGCAP, 

CONCAP, and AFCAP contracts, including sites in Kuwait and Qatar, but 

did not visit sites in Iraq. However, to obtain information about the use of 

LOGCAP in Iraq, we interviewed personnel who were responsible for 

contract management in Iraq, reviewed Defense Contract Management 

Agency (DCMA) situation reports written by contracting officers in Iraq, 

and met with representatives of the 101st Airborne Division shortly after 

their return from Iraq to discuss their experiences with the LOGCAP 

contract. In addition, because we visited the Balkans during our previous 

reviews of the Balkans Support Contract, we did not visit the Balkans 

during this review but did meet with Army personnel in Germany 

administering the contract. We determined that the information and data 

discussed in this report were reliable for the purpose of the report. We 

conducted our review from August 2003 through June 2004 in accordance 

with generally accepted government auditing standards. We discuss our 

scope and methodology in more detail in appendix I. 

The effectiveness of DOD’s planning for the use of logistics support 

contracts in contingency operations varied widely between the commands 

that use the contracts. U.S. Army, Europe, followed LOGCAP guidance 

when it used the contractor to help develop its plans to support the 

anticipated movement of troops through Turkey into Iraq. Planning for the 

use of the Army’s BSC, the Navy’s CONCAP contract, and the Air Force’s 

AFCAP contract was generally successful and involved the contractor in 

the early phases of planning. On the other hand, the Army Central 

Command did not follow guidance when planning for Operation Iraqi 

Freedom. The plan to support its military forces in Iraq was developed in 

May 2003 even though Army guidance recommends that a comprehensive 

statement of work be developed during the early phases of contingency 

planning. Additionally, even as it became clear that U.S. forces would 

remain in Iraq longer than originally anticipated, LOGCAP planning was 

still often ineffective, partly because the Army often did not include the 

contractor in its planning, notwithstanding guidance to the contrary. 

Results in Brief 
Page 3 GAO-04-854 Military Operations 

Frequent revisions to the LOGCAP plans generated a significant amount of 

rework for both DOD and the contractor. 

DOD’s contract oversight processes were generally good, albeit, with room 

for improvement. DCMA’s (the agency that oversees contractor 

performance) oversight of these contracts has produced good results—for 

example, contracting officers eliminated unnecessary airfield services and 

have identified equipment and materials that can be reused to reduce 

contract costs. Nevertheless, we identified several areas where 

improvements could be made. For example, DCMA did not always appoint 

contracting officers’ technical representatives who could have assisted 

DCMA in its quality assurance responsibilities. Recurring contractor 

problems such as poor cost reporting, difficulties with producing and 

meeting schedules, and weaknesses in purchasing system controls also 

made the LOGCAP contract more difficult to administer. Furthermore, an 

important part of the contract oversight process is the definitizing of task 

orders; that is, reaching agreement with the contractor on the 

determination of contract terms, specifications, and cost. Delays in 

definitizing task orders make cost-control incentives under these award 

fee contracts less effective. While AFCAP and BSC task orders were 

definitized quickly, and CONCAP’s task orders do not require 

definitization, most of the LOGCAP task orders have remained 

undefinitized for months, and sometimes more than a year, after they were 

due to be completed and after billions of dollars of work has been 

completed. Furthermore, the Army has not held an award fee board, even 

though the contract requires that one be held every 6 months, and award 

fees are important as a contractor incentive. Specifically, award fees can 

serve as a valuable tool to help control program risk and encourage 

excellence in contract performance. It will be difficult for the Army to hold 

a board that comprehensively evaluates the contractor’s performance 

because the LOGCAP customers have not been evaluating and 

documenting the contractor’s performance. Finally, neither the services 

nor DOD has established programs to collect and share lessons learned 

from the use of logistics support contracts. 

Customers have not always ensured that contractors provide services in 

an economical and efficient manner and that contract costs are controlled, 

although they have a responsibility to do so. We recognize that cost 

control should not be the primary consideration for commanders when 

U.S. forces are involved in major combat operations or when the 

operational environment or security situation requires the presence of 

more troops or the relocation of forces. However, cost control did not 

become a priority in using LOGCAP in Iraq and Kuwait until late 2003, 
Page 4 GAO-04-854 Military Operations 

when the Army Central Command received guidance from Army 

headquarters to look for economies. We found that when the customer 

reviews the contractor’s work for economy and efficiency, savings are 

usually realized, but these reviews have not been routinely conducted by 

LOGCAP customers at all task order locations. Both the Marine Corps in 

Djibouti and Combined Joint Task Force (CJTF)-180 in Afghanistan 

periodically review the level and the type of services provided by the 

LOGCAP contract, but similar reviews are not being conducted in Kuwait 

or in Iraq. At times both the Army and the Air Force believed that they had 

no other option but to use their logistics support contracts to obtain goods 

and services even when they knew that other methods might have resulted 

in lower costs. For example, the Army had the contractor provide 

temporary housing for an Army division in Iraq although it was more 

costly than allowing the unit to build the housing itself because at the time 

the Army made the decision to use LOGCAP, it was the only means 

available to get the 101st Airborne Division into housing by November 15, 

2003. Similarly, the Air Force used the AFCAP contract to supply 

commodities for its heavy construction squadrons because it did not 

deploy with enough contracting and finance personnel to buy materials 

quickly or in large quantities. While using the contract to procure and 

deliver commodities is permitted under the contract, it is generally not a 

cost-effective use of this type of contract because the customer pays 

award fees to the contractor in addition to the procurement cost. 

Given the size and complexity of these contracts, DCMA often did not 

have sufficient numbers of personnel in place to provide effective 

oversight and so used a risk-based approach to sizing its oversight teams. 

We also found many indications that some of the personnel responsible for 

overseeing or monitoring the contractors had not been adequately trained. 

DCMA, the Defense Contract Audit Agency, and the military services have 

all deployed civilian and military personnel to assist with contract 

administration and oversee the performance of the logistics support 

contractors. However, DCMA has not always had enough personnel in 

theater to effectively administer the logistics support contracts. In 

addition, many service personnel with oversight responsibilities for the 

contracts have not received the necessary training to accomplish their 

missions. As a result, their ability to perform all their duties, such as 

preparing the independent government cost estimates used to judge the 

reasonableness of the contractor’s cost proposals, was limited. The Navy’s 

contract monitors were all technically qualified engineers or have had 

significant experience in the construction industry. However, the Army 

deployed units responsible for supporting its LOGCAP customers with 

personnel who had little knowledge of the contract, and the Air Force did 
Page 5 GAO-04-854 Military Operations 

not consistently train evaluators to monitor the performance of the AFCAP 

contractor. Overall, military units across the services receiving contractor 

support did not have a comprehensive understanding of their roles and 

responsibilities. 

We are making a number of recommendations to improve planning, 

economy and efficiency, and training at all levels of command. These 

recommendations include emphasizing the need to comply with applicable 

planning guidance, establishing teams of subject matter experts to 

periodically review contractor services to ensure that services are 

appropriate and being provided in an economic and efficient manner, and 

implementing a department-wide lessons learned program to draw upon 

past experience. 

In written comments on a draft of this report, DOD stated that it concurred 

with the report and all its recommendations. We also provided an 

opportunity for the contractors on the logistics support contracts we 

reviewed—Kellogg, Brown and Root for LOGCAP; BSC; and CONCAP and 

Readiness Management Support L.C. for AFCAP—to comment on a draft 

of this report. Readiness Management Support provided clarifying 

comments in a written response. A detailed discussion of DOD’s and 

Readiness Management Support’s comments is contained in the body of 

this report. 
Page 6 GAO-04-854 Military Operations 

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

services in support of contingency operations since the Revolutionary 

War. Since the early 1990s, DOD has used logistics support contracts to 

meet many of its logistical support needs during combat operations, 

peacekeeping missions, and humanitarian assistance missions, ranging 

from Somalia and Haiti to Afghanistan and Iraq. Today these contracts 

support contingency operations such as Operation Enduring Freedom and 

Operation Iraqi Freedom as a major part of America’s Global War on 

Terrorism. Figure 1 shows locations where contractors are being used to 

support deployed forces. 

Figure 1: Selected Countries and Possessions Where AFCAP, CONCAP, LOGCAP, and BSC Are Being Used As of May 2004 

Contracts such as AFCAP, LOGCAP, and BSC provide similar logistics and 

engineering services, such as food preparation, laundry, housing, and 

construction in support of contingency operations. The Navy’s CONCAP 

Background 

The Balkans 

BSC

Afghanistan 

AFCAP

LOGCAP 

Kuwait 

AFCAP

LOGCAP

Qatar 

AFCAP 

UAE

AFCAP 

Uzbekistan 

AFCAP

LOGCAP

Iraq 

AFCAP 

LOGCAP

Oman 

AFCAP

Guam 

CONCAP

Djibouti

LOGCAP

Cuba 

CONCAP 

Sources: DOD (data); GAO (presentation).

Kyrgyzstan

AFCAP
Page 7 GAO-04-854 Military Operations 

contract is a contingency construction contract designed to meet 

emergency requirements involving natural disaster recovery, humanitarian 

assistance, or conflicts. 

All of the contracts included in our review are cost-plus award fee 

contracts. Cost-plus contracts allow the contractor to be reimbursed for 

reasonable, allowable, and allocable costs incurred to the extent 

prescribed in the contract. A cost-plus award fee contract provides 

financial incentives on the basis of performance. These contracts allow the 

government to evaluate a contractor’s performance according to specified 

criteria and to grant an award amount within designated parameters. 

Award fees can serve as a valuable tool to help control program risk and 

encourage excellence in contract performance. To reap the advantages 

that cost-plus award fee contracts offer, the government must implement 

an effective award fee process. 

Table 1 provides additional contract information on the logistics support 

contracts we reviewed. As can be seen in table 1, LOGCAP is by far the 

largest of these contracts both in terms of funds obligated and of the 

estimated value of work under the contract. 
Page 8 GAO-04-854 Military Operations 

Table 1: Contract Information on Logistics Support Contracts 

Category LOGCAP AFCAP CONCAP BSC 

Contractor Kellogg, Brown and 

Root 

Readiness 

Management Support 

Kellogg, Brown and 

Root 

Kellogg, Brown and 

Root 

Award date Dec. 2001 Jan. 2002 June 2000 May 1999 

Type of contract Cost-plus award fee Cost-plus award fee Cost-plus award fee Cost-plus award fee 

Fee base/award 1 percent/2 percent 1 percent/6 percent 0 percent/2 percent 

CONUS 

0 percent/5.75 percent 

OCONUS 

1 percent/8 percent 

Length of contract 1 year plus 9 option 

years 

1 year plus 7 option 

years 

1 year plus 4 option 

years 

1 year plus 4 option 

years 

Obligations 

(as of Apr. 30, 2004) 

$4.9 billion $708 million $242 million $1.73 billion 

(as of Mar. 31 2004) 

Contract ceiling price No dollar value; 

operational requirement 

used to establish ceiling

$900 million $300 million $2.098 billion 

Estimated value of work under 

contract 

(as of May 2004) 

$9.1 billion $653 million $242 million $2.021 billion 

Sources: DOD (data); GAO (analysis). 

The use of LOGCAP to support U.S. troops in Iraq is the largest effort in 

the history of the LOGCAP program both in number of troops supported 

and in land mass. As of May 21, 2004, the estimated value of contract 

services in Iraq was $5.6 billion. Figure 2 illustrates the size of Iraq. As 

shown, when superimposed over a U.S. map, Iraq covers an area east to 

west that is comparable to that from Washington, D.C., to central Indiana, 

and from north to south comparable to Lansing, Michigan, to Raleigh, 

North Carolina. 
Page 9 GAO-04-854 Military Operations 

Figure 2: Iraq In Relationship to the United States 

The contractors and the services have, for the most part, worked together 

to meet the customers’ needs in sometimes hazardous or difficult 

circumstances. For example, the AFCAP contractor is providing air traffic 

management at air bases throughout central Asia, reducing the operations 

tempo of selected and scarce Air Force assets. In addition, AFCAP is 

providing housing and base support in Iraq. Through CONCAP the Navy 

has constructed detainee facilities (including a maximum security prison) 

at Guantanamo Bay on time and within budget. CONCAP’s projects at 

Guantanamo have increased the safety of both the detainees and the U.S. 

forces guarding them and will result in real savings in reduced personnel 

tempo. For example, CONCAP has increased detainee safety with the 

construction of more secure cells and guard safety by providing greater 

separation between guards and detainees. LOGCAP is providing life and 

logistics support for more than 166,500 soldiers and civilians under 

Lansing

Lexington

Pittsburgh

Raleigh

Buffalo

Canada

Source: "Central Intelligence Atlas of the Middle East, 1993."

Indianapolis

North 

Atlantic

 Ocean

WASHINGTON, D.C.
Page 10 GAO-04-854 Military Operations 

difficult circumstances in Iraq, Afghanistan, Kuwait, and Djibouti, and 

customers are generally pleased with the service the contractor is 

providing. Finally, BSC continues to provide troops in Kosovo and Bosnia 

with a myriad of high-quality services, and the customer works with the 

contractor to identify costs savings. 

Many factors can influence the overall cost of the logistics support 

contracts. As shown in figure 3, costs can be affected by the size and scope 

of requirements identified by customers and by the amount of time the 

customer gives the contractor to plan and execute the mission. 

Additionally, cost is influenced by the manner in which a unit chooses to 

fulfill a requirement. Other resources that are more cost-effective may be 

available to the units, such as military troop labor or host nation support. 

Cost may also be affected by the quality of documentation prepared by 

contract customers and program managers. Concise statements of work 

and comprehensive government cost estimates may reduce the likelihood 

of incurring additional costs. In addition, the appointment of government 

contract management personnel to monitor contractors’ performance 

ensures that contractor-provided services meet contract requirements. 

Lastly, operational concerns, such as the security situation in Iraq, can 

make providing services more costly. 
Page 11 GAO-04-854 Military Operations 

Figure 3: Some Factors That Can Influence Costs of Logistics Support Contracts 

The military services, as well as DCMA and the Defense Contract Audit 

Agency, perform contract management functions to ensure that the 

government is receiving quality services from the logistics support 

contractors at the best possible prices. The customer is responsible for 

identifying and validating requirements to be addressed by the logistics 

support contracts as well as evaluating the contractor’s performance and 

ensuring that the contract is used in an economical and efficient manner. 

The contracting officer is responsible for oversight and management of the 

Government oversight

Cost factors

Unit requirements

Requirement sourcing method

Quality of task order package

Time

Operational situation

Technical experts and 

performance evaluators 

monitoring contractor

Feedback with contractor to 

correct deficiencies

Mission requirements

Security

Limitations on contractor 

to provide services

Specific type of service to be 

provided

Level of service to be provided

Clarity of statements of work

Comprehensive government cost 

estimates

Agreed-upon assumptions

Military troop labor

Host nation support

Logistics support contract

Other contract resource

The need to fulfill requirements 

quickly increases costs

Sources: DOD (data); GAO (analysis).
Page 12 GAO-04-854 Military Operations 

contract. However, the contracting officer may delegate some of the 

oversight and management functions to DCMA. When management 

functions are delegated by the procuring contracting officer, DCMA may 

assign administrative contracting officers to provide on-site contract 

administration at deployed contingency locations. The Defense Contract 

Audit Agency ensures that costs claimed by the contractor are reasonable, 

allowable, and allocable. Table 2 provides additional information on the 

roles and responsibilities of contract management personnel. 

Table 2: Key Contract Management Roles and Responsibilities 

Customers: 

• Develop requirements. 

• Write statements of work. 

• Obtain funding. 

• Monitor contract performance. 

• Evaluate technical performance. 

• Provide the award fee board with input. 

Contracting officer: 

• Interpret the contract. 

• Obligate the government for work under 

the contract. 

• Delegate contract administration. 

procedures to administrative contracting 

officers. 

• Ensure that the contractor corrects cited 

deficiencies. 

• Provide the award fee board with input. 

Defense Contract Management Agency: 

• Provide daily contract oversight. 

• Review and approve purchase 

requisitions (LOGCAP and BSC). 

• Evaluate quality assurance. 

• Monitor government property. 

• Monitor contract performance. 

• Evaluate technical performance. 

• Provide the award fee board with input. 

Defense Contract Audit Agency: 

• Review contractors’ financial 

management systems. 

• Review cost proposals. 

• Approve payment vouchers (LOGCAP, 

BSC, and CONCAP). 

• Audit incurred costs. 

• By invitation, provide the award fee 

board with input. 

Sources: DOD (data); GAO (analysis). 

Work is done under each of the contracts through task orders. The task 

order process begins when the customer, or the unit that is requesting 

support from the contractor, identifies a requirement. The requirement is 

generally documented in the form of a task order statement of work, 

which establishes the specific tasks to be accomplished by the contractor 

and the time frames of performance. If the decision is made to use the 

logistics support contract to satisfy the requirement, the unit contacts the 

contract program management office. The program management office, in 

coordination with the contracting officer, determines whether the task is 

within the scope of the contract. The program management office obtains 

an approximate cost estimate from the contractor and provides the 

customer with the information. From this information, the customer 
Page 13 GAO-04-854 Military Operations 

decides if it will use the contractor to fulfill the requirement. If the 

government decides to use a logistical support contract, funding is 

obtained, the statement of work is finalized, and the contracting officer 

issues the contractor a notice to begin work. Significantly, if the customer 

identifies a change in the requirement, the process is initiated again. 

Figure 4 provides an illustration of the key steps in the task order process. 

Figure 4: Overview of the Task Order Process 

We have issued reports on the use of contractors to support deployed 

forces in 1997, 2000, and 2003. In 1997 we reported that there were 

opportunities to make the use of LOGCAP in Bosnia more efficient and 

effective, including developing doctrine and guidance, providing No

No

Yes

Yes

No

Customer Yes

identifies 

requirement

Contact program 

management 

office

Determine if 

task Is 

within scope

Contract not a 

viable option

Customer evaluates 

cost estimate

Obtain funding and

 finalize statement 

of work

Procuring contracting 

officer issues notice

 to proceed

Contractor 

begins work

Change in 

requirement

Contractor 

completes work

Request cost 

estimate from 

the contractor

Sources: DOD (data); GAO (presentation).
Page 14 GAO-04-854 Military Operations 

commanders with training, and providing commands with assistance when 

they are using LOGCAP.1

 In 2000 we reported that the Army should 

improve its management of BSC, the successor contract to LOGCAP in the 

Balkans, including examining the level and frequency of services and 

providing a more extensive predeployment training program for all 

contract oversight personnel.2

 In 2003 we reported that commanders had 

limited visibility and understanding of the extent and type of services 

being provided by contractors and those commanders and other personnel 

lacked training on their roles and responsibilities in dealing with 

contractors.3

 DOD generally agreed with the recommendations that we 

made in each of these reports, including the provision of more training. 

Planning for the Navy’s CONCAP contract, the Army’s BSC, and to a lesser 

degree, the Air Force’s AFCAP contract, included the contractor in task 

order planning, resulting in more-effective planning. However, while the 

Army has developed guidance to facilitate the use of LOGCAP that clearly 

recommends working with the contractor to develop comprehensive 

support plans and statements of work in the early stages of contingency 

planning, that guidance was not always followed. For example, the Army 

Central Command did not follow that guidance when planning for 

Operation Iraqi Freedom. Even as it became clear that U.S. forces would 

remain in Iraq longer than originally anticipated, LOGCAP planning 

continued to be mixed, partly because the Army often did not include the 

contractor in its planning and planning did not always take advantage of 

lead-time when it was available. However, U.S. Army, Europe, in planning 

for the anticipated movement of troops through Turkey into Iraq in 

support of Operation Iraqi Freedom, and the Marine Corps, in planning for 

the deployment of forces to Haiti, followed LOGCAP guidance, which 

proved beneficial. As noted earlier, the LOGCAP contract is the most 

expensive of the logistics support contracts we examined. 

 1

 U.S. General Accounting Office, Contingency Operations: Opportunities to Improve the 

Logistics Civil Augmentation Program, GAO/NSIAD-97-63 (Washington, D.C.: Feb. 11, 

1997). 

2

 U.S. General Accounting Office Contingency Operations: Army Should Do More to 

Control Contract Cost in the Balkans, GAO/NSIAD-00-225 (Washington, D.C.: 

Sept. 29, 2000). 

3

 U.S. General Accounting Office, Military Operations: Contractors Provide Vital Services 

to Deployed Forces but Are Not Adequately Addressed in DOD Plans, GAO-03-695

(Washington, D.C.: June 24, 2003). 

Planning for the Use 

of Contractor Support 

Varied Widely 
Page 15 GAO-04-854 Military Operations 

Planning for BSC, the CONCAP contract, and the AFCAP contract all 

follow similar processes, which rely on a collaboration between the 

customer and the contractor to develop comprehensive and clear 

statements of work in the early stages of planning. For example, we 

observed during our work that the following guidance and procedures 

were being followed: 

• Guidance issued by BSC’s contracting office, the Army Corps of 

Engineers—Transatlantic Program Center,4

 establishes the policy for 

developing statements of work for BSC. According to the guidance, after 

the customer identifies a requirement, the customer and the contractor 

work together to develop the statement of work. After the statement of 

work is agreed to, the contractor prepares an execution plan that 

describes how the contractor intends to meet the requirement. The 

government reviews the execution plan to ensure that the customer’s 

needs are met in the most economical and efficient manner possible. This 

process continues until U.S. Army, Europe, is satisfied that the statement 

of work accurately reflects the command’s requirements and the 

contracting officer issues a notice to proceed. 

• CONCAP planning is a cooperative effort between the Navy Facilities 

Command, the customer, and the contractor. Customers work closely with 

the command and the contractor to clearly define the requirements and 

develop a statement of work, which may vary from a brief description or 

sketch to a complete design. Depending on the project, the contractor may 

be given the responsibility to provide the initial statement of work, which 

the government team reviews and determines if it is acceptable before 

providing final approval. After the government and the contractor come to 

agreement on the work to be performed and the cost, the task order is 

incorporated into the contract. 

• The AFCAP planning process is detailed in AFCAP’s Concept of 

Operations document.5

 According to this guidance, customers 

• identify requirements, 

• obtain approval to use AFCAP from a Major Command, and 

• develop a statement of work. 

After the statement of work is developed, the contractor provides a cost 

estimate, and the government and the contractor work together to ensure 

 4

 U.S. Army, Army Corps of Engineers Transatlantic Program Center Standard Operating 

Procedures for Task Orders on the Balkans Support Contract” (Nov. 23, 1999). 

5

 U.S. Air Force Contract Augmentation Program, Concept of Operations (no date 

provided). 

U.S. Army, Europe; the 

Navy; and the Air Force 

Involve the Contractor in 

Planning 
Page 16 GAO-04-854 Military Operations 

that all parties understand the requirements, available options, and 

associated costs. Using information developed through this collaborative 

effort, the customer finalizes the statement of work and sends it to the 

procuring contracting officer, who issues a notice to proceed. 

Early planning that identifies requirements and decides which ones will be 

satisfied by contracting, and the involvement of the contractor in planning, 

are recurring themes in the Army’s doctrine and guidance for using 

contractor support, in general, and the LOGCAP contract, specifically. 

According to Army Field Manual 3-100.21—”Contractors on the 

Battlefield” 6

— integrated planning is a governing principle of contractor 

support, and for contractor support to be effective and responsive, its use 

must be considered and integrated into the planning process. Proper 

planning identifies the full extent of contractor involvement, how and 

where contractor support is provided, and any responsibilities the Army 

may have in supporting the contractor. This same emphasis on planning 

and the early identification of requirements is also discussed in Army 

Regulation 700-137—”Logistics Civil Augmentation Program”7

—which 

establishes the policies, responsibilities, and procedures for implementing 

LOGCAP. That regulation states that contractor responsiveness similar to 

that offered by military units can be achieved only through the careful 

drafting of contract requirements (statements of work), and that to 

increase proper planning and execution, the contractor should have a 

clear understanding of the statement of work. The regulation also urges 

commanders not to classify plans at a level where the contractor cannot 

have access and, if classification is necessary, commanders should write 

unclassified contract statements of work and put time frames, geographic 

areas, and other classified material in appendixes. An Army regulation on 

contractors accompanying the force similarly states that the most 

important factor in ensuring that support services are provided at the 

desired levels of quality and timeliness is the establishment of clear and 

concise contract requirements in a statement of work, 8

 and Army Materiel 

 6

 U.S. Army, “Contractors on the Battlefield,” Department of the Army Field Manual 

3-100.21 (Jan. 3, 2003). 

7

 U.S. Army, “Logistics Civil Augmentation Program,” Department of the Army Regulation 

700-137 (Dec. 16, 1985). 

8

 U.S. Army, “Contractors Accompanying the Force,” Department of the Army Regulation 

715-9 (Oct. 29, 1999). 

Army Guidance Highlights 

the Early Identification of 

Requirements as a Key to 

Maximizing the 

Effectiveness of 

Contractor Support 
Page 17 GAO-04-854 Military Operations 

Command Pamphlet 700-30—Logistics Civil Augmentation Program 9—

designed to help users obtain support through the LOGCAP process 

reiterates the point that a major consideration for maximizing LOGCAP 

potential is for the customer to be aware of its LOGCAP support 

requirements and convey those requirements in a timely manner to the 

appropriate personnel. This pamphlet also recommends the early 

involvement of the contractor in planning because it allows the contractor 

to develop more accurate cost estimates, gives the contractor time to bring 

on board reliable subcontractors, and can minimize costs. The guidance 

also recommends that the customer and the contractor develop a 

comprehensive statement of work in the early stages of contingency 

planning. 

Early decisions on how the contract is to be used facilitate a number of 

other actions that lead to enhanced contract management and oversight. 

Once government and contractor planners are notified of a customer’s 

requirements, they can begin developing statements of work. According to 

the Army’s LOGCAP guidance, statements of work specify the products 

and services required and are the most important documents provided to 

the contractor. The contractor uses statements of work to (1) plan how to 

satisfy the customer’s requirements in the most efficient and economical 

manner and (2) develop cost estimates. These estimates are provided to 

the customer and serve as an important decision tool for assessing 

contractors’ proposals and deciding between alternative support 

strategies. At the same time, representatives from the LOGCAP program 

management office use the statements of work to develop independent 

government cost estimates. An independent government cost estimate is 

the government’s estimate of the costs the contractor is expected to incur 

in performing the work. The more time the contractor and the government 

have to refine their estimates, the more useful they are to commanders. 

Following LOGCAP guidance proved beneficial for Army operations in 

Turkey and Marine Corps operations in Haiti (LOGCAP is available to all 

the military services). Specifically, involvement of the contractor as 

recommended in the LOGCAP guidance led to more informed decision 

making as follows: 

 9

 U.S. Army, “Logistics Civil Augmentation Program,” Army Materiel Command Pamphlet 

700-30 January 2002). 

Planners Followed Army 

Guidance with Positive 

Results in Turkey and Haiti 
Page 18 GAO-04-854 Military Operations 

• In planning for Operation Iraqi Freedom, U.S. Army, Europe, was tasked 

with supporting the anticipated movement of troops through Turkey into 

Iraq, and our review of that planning showed that the command followed 

Army guidance to good effect. In October 2002 the command brought 

contractor personnel to its headquarters in Europe to help plan and 

develop the statement of work. According to U.S. Army, Europe, 

contractor planners brought considerable knowledge of contractors’ 

capabilities, limitations, and operations, and their involvement early in the 

planning efforts increased their understanding of requirements and 

capabilities, facilitated communication regarding the statement of work, 

and enhanced the mission’s completion. 

• Recent planning for the deployment of U.S. forces to Haiti resulted in a 

similar outcome. U.S. Marine Forces Atlantic, U.S. Southern Command, 

Army Materiel Command, and contractor personnel visited Haiti to 

develop support plans. According to an Army Materiel Command official, 

the planning process was a success because it led to an informed decision 

by the Marines to use their own assets to support the forces in lieu of 

LOGCAP. 

The Army Central Command—the Army command responsible for 

LOGCAP planning in Kuwait and Iraq—did not follow the planning process 

described in Army regulations and guidance as it prepared for operations 

in southwest Asia. According to a former Army Materiel Command 

logistics planner, the Army Central Command used the standing LOGCAP 

plans to prepare for the mission but, after Army forces deployed, the plan 

changed significantly and Army Materiel Command’s involvement was 

diminished because of security concerns. The planner stated that Army 

Central Command raised the security classification for the plan above the 

clearance level of the planners and it took some time to resolve this issue. 

Thus, during a critical planning period, the planning personnel with the 

most experience in using the contract were not part of the planning 

process. The planner also said that the contractor was not involved in the 

planning because of security concerns. As a result, two key principles 

needed to maximize LOGCAP support and minimize cost—a 

comprehensive statement of work and early contractor involvement—

were not followed. Specifics follow: 

• The Army developed a plan to support the troops in Iraq (task order 59 of 

the LOGCAP contract) in May 2003, but the plan was not comprehensive 

because it did not include all of the dining facilities, troop housing, and 

other services that the Army has since added to the task order. According 

to an official from the 101st Airborne Division, there was a lack of detailed 

planning for the use of LOGCAP at the theater and division levels for the 

Planning for Operation 

Iraqi Freedom Was Not 

Comprehensive 
Page 19 GAO-04-854 Military Operations 

sustainment phase of the operation. He went on to add that Army planners 

should develop a closer working relationship with the divisions and the 

contractor. 

• Task orders were frequently revised. These revisions generated a 

significant amount of rework for the contractor and the contracting 

officers. Additionally, time spent reviewing revisions to the task orders is 

time that is not available for other oversight activities. While operational 

considerations might have driven some of these changes, we believe 

others were more likely the result of ineffective planning. For example, 

task order 59 was changed seven times in less than 1 year. Specifics 

follow: 

• Basic Statement of Work—May 30, 2003—provided limited services 

such as food services (except site A); pest control; laundry services; 

and morale, welfare, and recreation services at six base camp clusters 

known as sites A, B, C, D, E, and F. 

• Change 1 on June 7, 2003, added support for the coalition forces 

(site G). 

• Change 2 on June 20, 2003, added food service; pest control; laundry 

services; and morale, welfare, and recreation services for Site H (the 

101st Airborne Division). 

• Change 3 on June 24, 2003, added troop housing, transportation, and 

supply service activities at site A. 

• Change 4 on July 22, 2003, removed the coalition forces (Site G) from 

the task order and added food service for site A. A separate task order 

was developed for support for coalition forces. 

• Change 5 on August 27, 2003, added housing for sites B, C, D, F, and 

H. 

• Change 6 on November 3, 2003, made changes to the services being 

provided and added additional combat support activities. 

• Change 7 on November 14, 2003, added additional combat support 

services. 

Frequent revisions have not been limited to task order 59. Task order 27, 

which provides support for a significant number of U.S. troops in Kuwait 

(valued at $426 million as of May 2004), was changed 18 times from 

September 2002 through December 2003, including five changes in 1 

month, some on consecutive days. As of May 11, 2004, the contracting 

office, DCMA, and the contractor processed more than 176 modifications 

to LOGCAP task orders. As discussed above, frequent revisions to task 

orders generate a significant amount of rework for the contractor and the 

contracting officer. 
Page 20 GAO-04-854 Military Operations 

While we recognize the uncertainty inherent in wartime operations, 

planning for some LOGCAP tasks did not take advantage of lead-time 

when it was available. According to the LOGCAP program manager, early 

planning is a key to obtaining the best services at the best prices. The 

following are two examples of where the Army did not use the planning 

time available: 

• The Kuwaiti government gave the Army several months’ notice that it 

needed some Army facilities at the Kuwait International Airport moved 

because of planned construction. The Army did not inform the contractor, 

however, until 5 days before the scheduled deadline. Army officials stated 

that accomplishing the move in only 5 days increased the cost to the Army. 

• The Army in Kuwait did not always give acquisition review boards 

sufficient time or resources to consider alternatives to LOGCAP. 

Commanders create acquisition review boards to make recommendations 

about the validity of requirements and the best way to meet them. The 

boards generally consist of personnel from operations, logistics, legal 

services, resource management, and contracting that review requirements 

for contracting support against the priorities established by the 

commander. The boards screen requirements and determine whether or 

not they should be satisfied through contingency contract support, 

through host nation support, LOGCAP, or other sources. However, in 

December of 2003 in Kuwait, we observed that one board was not given 

sufficient time to consider alternatives to LOGCAP and that the resources 

to pursue contingency contracts other than LOGCAP were not available, 

largely defeating the purpose of the board. For example, several large, 

preexisting task orders that were to expire within a few weeks were 

presented with the admonition that it was imperative that the task orders 

continue. With only a few weeks to renew the task order, the board had no 

time to explore options to using the LOGCAP contract. Furthermore, the 

principal assistant responsible for contracting in Kuwait said that her 

office lacked the resources to explore contracting options to LOGCAP and 

the legal office lacked the resources to review new contracts. 

While oversight of a contract is the contracting officer’s responsibility, the 

contracting officer may delegate some oversight responsibilities to DCMA. 

The contracting officers for LOGCAP, AFCAP, and BSC have all delegated 

significant portions of contract oversight to DCMA, while the Navy retains 

all contract administration and oversight responsibilities for the CONCAP 

contract. While DCMA’s contract oversight generally resulted in cost 

savings, opportunities exist to improve oversight. For example, DCMA did 

not perform some of its delegated contract administration tasks under 

AFCAP, such as ensuring that the contractor maintained appropriate 

LOGCAP Planning Has Not 

Always Been Timely 

Contract Oversight 

Processes Were 

Generally Good but 

Not Always Properly 

Implemented 
Page 21 GAO-04-854 Military Operations 

controls of government property, and the Air Force did not always appoint 

contracting officers’ representatives (subject matter experts) to assist with 

oversight. Complicating oversight were recurring contractor problems 

such as poor cost reporting; difficulties with producing and meeting 

schedules; and inadequate controls over purchasing, which made the 

LOGCAP contract more difficult to administer. In addition, better 

government oversight might have avoided a billing disagreement between 

the government and the LOGCAP contractor involving millions of dollars 

in food service bills. Moreover, while the AFCAP and BSC task orders 

have been definitized within the time allowed by the Defense Federal 

Acquisition Regulation Supplement, most of the LOGCAP task orders have 

not. Because task orders have not been definitized, LOGCAP contracting 

personnel have not conducted an award fee board. We believe it will be 

difficult to comprehensively assess the contractor’s performance in an 

award fee board because customer evaluations of the contractor’s 

performance have not been uniformly documented. Finally, lessons 

learned are often not shared or are shared only informally, and there is no 

process in place to systematically collect knowledge and insights about 

the programs and to disseminate it to those who currently need it to 

provide oversight and management of the contracts. 

The oversight of contracts ultimately rests with the contracting officer, 

who is responsible for ensuring that contractors meet the requirements set 

forth in the contract. However, most contracting officers are not located at 

deployed locations. As a result, contracting officers appoint monitors, who 

represent the contracting officer and are responsible for monitoring 

contractors’ performance. Contracting officers for AFCAP, LOGCAP, and 

BSC have chosen to have personnel from DCMA oversee contractors’ 

performance. DCMA is an independent combat support agency within 

DOD that serves as the department’s contract manager, responsible for 

ensuring that federal acquisition programs, supplies, and services are 

delivered on time, delivered within cost, and meet performance 

requirements. 

We met with DCMA officials in Kuwait and Qatar and discussed contract 

oversight activities for the LOGCAP and AFCAP contracts; reviewed Army 

Audit Agency audits of contract oversight activities in Afghanistan, 

Uzbekistan, and Turkey; and found that, overall, DCMA is doing a good job 

of administering the contract. From December 2002 through February 

2004, the Army Audit Agency reviewed the Army’s use of LOGCAP in 

Turkey, Uzbekistan, and Afghanistan and found that the contract was 

being effectively managed. While these audits did not specifically assess 

DCMA’s Oversight of 

Logistics Support 

Contracts Has Produced 

Good Results 
Page 22 GAO-04-854 Military Operations 

DCMA’s oversight of the contract, the audits’ included the oversight 

responsibilities delegated to DCMA. In Turkey, the Army Audit Agency 

reported that appropriate actions to control costs and ensure effective 

stewardship of resources were in place; in Uzbekistan, it reported that key 

management controls had been identified, were in place, and were 

working; and in Afghanistan, the audit agency reported that adequate 

procedures were in place to control costs but that the government could 

improve the management of government-furnished equipment provided to 

the contractor. 

The Army Audit Agency’s conclusions are similar to our observations of 

DCMA’s activities in Kuwait, where DCMA’s oversight is resulting in 

contract improvements and cost savings. For example, at one location we 

visited in Kuwait that included the use of LOGCAP for helicopter airfield 

operations, the DCMA administrative contracting officer had an aviation 

background and observed that the contract called for more aviation 

refueling points than necessary and that the number of sweepers available 

for cleaning the runways and parking ramps was excessive. He was able to 

reduce the number of refueling points by half, saving the Army money, and 

the number of sweepers from five to three. In addition, after conducting a 

lease/buy analysis, the administrative contracting officer directed the 

contractor to buy the sweepers instead of leasing them because buying 

saved the government money. Situation reports filed periodically by 

DCMA administrative contracting officers also detail a concerted effort to 

reduce contract costs by conducting lease or buy analyses for nontactical 

vehicles10 and generators, critiquing the contractor’s proposed cost 

estimates, and monitoring the disposition of government property. These 

reports also document DCMA’s quality assurance personnel enforcing 

health and safety standards to ensure, for example, that food served to 

U.S. military personnel had met all health requirements. Additionally, 

DCMA officials, along with contractor and service officials in Qatar, the 

Balkans, and Kuwait were instrumental in transferring excess material and 

equipment from AFCAP and BSC to LOGCAP. DCMA estimated savings to 

the LOGCAP contract from the equipment transfer at $17 million to 

$22 million. 

 10 Nontactical vehicles are motor vehicles used to support general transportation services 

and facility maintenance functions not directly connected with combat or tactical 

operations. 
Page 23 GAO-04-854 Military Operations 

While, as discussed above, we believe overall that DCMA provided good 

oversight, it failed to perform some of its delegated contract 

administration tasks for the AFCAP task orders in southwest Asia. DCMA 

failed to ensure that the contractor maintained appropriate controls of 

government property. The Federal Acquisition Regulation11 states that a 

government contractor is required to establish and maintain a property 

system to control, protect, preserve, and maintain all government 

property. The Federal Acquisition Regulation goes on to say that the 

government’s contracting officer or the designated representative assigned 

the property administration responsibility should review the contractor’s 

property control systems to ensure compliance with the property clauses 

of the contract. 

On task orders executed in southwest Asia, the AFCAP procuring 

contracting officer delegated the property administration responsibility to 

DCMA’s administrative contracting officers. However, contract 

administrators in southwest Asia did not ensure that the contractor had 

established and maintained a property control system to track items 

acquired under the contract. In addition, DCMA’s contracting officers in 

southwest Asia did not have a system in place to document what the 

contractor was procuring in support of AFCAP task orders and what was 

being turned over to the Air Force. As a result, as of April 2004, neither 

DCMA nor the Air Force could account for approximately $2 million worth 

of tools and construction equipment purchased through the AFCAP 

contract. 

In July 2004 DCMA told us that the AFCAP contracting officer provided 

DCMA with additional direction regarding the administration of property 

acquired under the contract. According to DCMA, its Middle East office 

identified a joint accountability problem for the Air Force engineering 

squadrons. The AFCAP contracting officer has since clarified that the tools 

and construction equipment purchased for the Air Force engineering 

squadrons were to go directly to the Air Force. As a result, DCMA believes 

that neither it nor the contractor are responsible for the accountability of 

the property. However, at the time of our visit to the theater in December 

2003, and in subsequent conversations with DCMA contracting officers, we 

observed and were told that at that time DCMA was responsible for 

property administration but did not have a system in place to document 

the property that was purchased under these task orders and that DCMA 

 11 Federal Acquisition Regulation, Part 45, “Government Property.” 

DCMA Failed to Perform 

Its Property 

Administration Function 

on Some Task Orders 
Page 24 GAO-04-854 Military Operations 

contracting officers should have been performing this responsibility. 

Notwithstanding the additional guidance that has since been provided by 

the AFCAP contracting officer, DCMA was delegated the property 

administration responsibility and either should have documented all 

property purchased for the Air Force engineering squadrons or sought 

clarifying guidance earlier from the AFCAP contracting officer. However, 

at the time of our review, neither the Air Force nor DCMA could account 

for approximately $2 million worth of tools and equipment purchased 

under the contract. 

As mentioned, the LOGCAP contract is being used to meet a wide range of 

military requirements, such as running supply operations for food, water, 

fuel, construction materials, and repair parts and providing services such 

as laundry, clothing repair, food service, sanitation, recreation, 

maintenance, transportation, medical waste disposal, and construction. 

Effective oversight of this diverse body of work requires personnel with 

knowledge and expertise in these particular areas. DCMA administrative 

contracting officers are contracting professionals but may have limited 

knowledge of field operations. In these situations, DCMA normally uses 

contracting officers’ technical representatives. Contracting officers’ 

technical representatives are individuals who have been designated by 

their unit and appointed and trained by the administrative contracting 

officer. They provide technical oversight of the contractor’s performance, 

but they cannot direct the contractor by making commitments or changes 

that affect any terms of the contract. 

In March 2000, the U.S. Army, Europe, audit cell located in Kosovo 

recommended that the command use the Army’s subject matter experts to 

provide oversight of routine day-to-day services provided by the Balkans 

Support Contract.12 The audit cell recommended that the task force 

designate these experts as contracting officers’ representatives, which, 

according to the audit cell, would improve contract oversight and 

management and ensure that the command received quality service from 

the contractor. In October 2002, during a visit to Kosovo, we confirmed 

that the command had designated subject matter experts from the Area 

Support Group’s Department of Logistics as contracting officers’ 

representatives for BSC. 

 12 Draft Memorandum for the Commanding General, Task Force Falcon (Forward), 

(Mar. 31, 2000) Task Force Falcon Audit Cell. 

DCMA Did Not Always 

Appoint and Use 

Contracting Officers’ 

Technical Representatives 

to Monitor the Contract in 

Iraq 
Page 25 GAO-04-854 Military Operations 

According to a DCMA official in Iraq, it was the agency’s goal to have a 

contracting officer’s technical representative for each functional area (e.g., 

food service and maintenance) at each division and camp. While 

representatives were appointed at some locations, they were not at others. 

For example, 101st Airborne Division officials told us that they had not 

been asked to provide representatives and had played no role in 

overseeing the contract. We believe that having contracting officers’ 

technical representatives for each functional area at each division and 

camp would improve government oversight. 

DCMA prepares periodic situation reports that report the status of 

contractor activities, successes, and problems. Our review of the reports 

prepared by DCMA from September 2003 through May 2004, which we did 

not validate but did discuss with the LOGCAP contractor, highlights a 

pattern of contractor management problems. Some of the problems 

mentioned in these reports follow: 

• Adequate cost reporting and cost management are important because they 

affect the government’s ability to monitor contract spending. Several 

administrative contracting officers believe that the contractor’s cost 

reports are inadequate and make it difficult to know how much the 

contractor has actually spent on the individual task orders. For example, 

in the November 13, 2003, report for Iraq, the administrative contracting 

officer reported that the contractor was refusing to perform work because 

of its contention that no funding remained available, while the cost report 

for the previous reporting period showed that the contractor had 

expended only 45 percent of the available funds. Furthermore, some 

administrative contracting officers have noted that the contractor’s 

managers at individual sites have no knowledge of the costs associated 

with their task orders. 

• Difficulties with producing and meeting schedules affect the government’s 

ability to know when contracted support will be provided. The situation 

reports frequently mention that the contractor has not been able to 

produce task order schedules as required by the contract. In addition, the 

reports often note that the contractor is behind schedule on both big and 

small projects. Additionally, officials from the 101st Airborne Division 

noted that the contractor did not meet the required schedule for providing 

housing. They also noted that the contractor did not provide some of the 

services required by task order 59, specifically pest control and water 

production. 

• Inadequate controls over purchasing and subcontractors hinder 

government oversight. Several administrative contracting officers have 

noted that the contractor had inadequate controls over its purchasing 

LOGCAP Contract 

Management Is Made More 

Difficult by Recurring 

Contractor Problems 
Page 26 GAO-04-854 Military Operations 

system. For example, administrative contracting officers have observed 

that requisitions 

• are not always provided to the administrative contracting officers as 

required by the contract, 

• frequently lack sufficient documentation to justify the lease or 

purchase, and 

• do not provide an accurate estimate of the cost of the item. 

Also, administrative contracting officers have noted that they are unable to 

gain accurate status about materiel being purchased through the 

contractor, which increases customers’ frustration. In addition, the 

contractor does not have good control over its subcontractors. One DCMA 

official reported that the contractor let a subcontract expire without a 

transition plan, thus disrupting services. 

The LOGCAP contractor has acknowledged some of these problems and 

has been working with DCMA to establish systems and procedures that 

will be more responsive to the government’s needs. For example, in late 

2003 the contractor sent a large team of auditors to Kuwait to review its 

operations in Kuwait and Iraq and develop processes and procedures to 

help resolve some of the purchasing problems. The situation reports also 

document that the contractor is working with DCMA to resolve other 

problems mentioned above, such as issues related to scheduling. However, 

situation reports from Iraq and Kuwait indicated that scheduling and cost 

reporting continue to be a problem at some locations while improvements 

have been noted at others. 

A disagreement between the LOGCAP contractor and the Defense 

Contract Audit Agency involving at least $88 million in food services 

charges to feed soldiers in Iraq might have been avoided had there been 

more careful government oversight. The statement of work prepared by 

the Army required that the LOGCAP contractor provide food service and 

food service facilities at bases throughout Iraq. It directed that the 

contractor build, equip, and operate the dining facilities at the base camps 

and provide four meals a day for the base camp populations. The 

populations were specified in the statement of work. The contractor 

subcontracted with six food service companies, which were responsible 

for building and operating the dining facilities as well as providing food 

service workers and food. The contractor instructed the subcontractors to 

do a head count at each meal. A military representative, a contractor 

representative, and a subcontractor representative signed daily head-count 

sheets. The statement of work did not specify whether the government 

Better Oversight of Food 

Service Might Have 

Avoided a Contract 

Disagreement 
Page 27 GAO-04-854 Military Operations 

should be billed on the camp populations specified in the statement of 

work or on the actual head count. Generally, the subcontractors billed the 

contractor for the base camp population although there were some 

differences in the subcontractors’ billing procedures. 

During our review of subcontractors’ files, we noted that on many 

occasions the number of personnel eating in the dining facilities 

throughout Iraq was less than the base camp population indicated in the 

statement of work. In response to a Defense Contract Audit Agency audit 

of dining facility billings, the contractor analyzed selected invoices from a 

number of dining facilities throughout Iraq for a 4-month period and found 

that by billing the government for the base camp population instead of the 

actual personnel served, it had billed the government for food service for 

more than 15.9 million soldiers13 when only 12.5 million—more than 3.4 

million fewer—had passed through the dining facilities. The contractor 

estimated the cost of serving the additional personnel who did not use the 

dining facilities at approximately $88 million. 

The contractor and the Defense Contract Audit Agency disagree over the 

appropriate billing procedures for this service. The Defense Contract 

Audit Agency’s interpretation requires billings based on actual head counts 

while the contractor’s interpretation authorizes billings based on the 

number of soldiers at each base camp as established in the task order 

statement of work. The parties are currently discussing the issue. We 

believe that this disagreement could have been avoided through better 

contract oversight. As discussed above, daily head counts sheets were 

being prepared at each facility. However, neither the government nor the 

contractor apparently acted on the disparity between the camp population 

and the head counts. According to representatives of the 101st Airborne 

Division, they were not aware of the cost implications of the disparity. 

They also said that CJTF-7, the next higher headquarters for the 101st, was 

not interested in the numbers of people that were using the dining facility 

unless the number exceeded the number contracted for in the statement of 

work. 

 13 This figure is the number of soldiers in Iraq multiplied by the number of days in a month 

multiplied by the number of months included in the invoice analysis. 
Page 28 GAO-04-854 Military Operations 

Unlike the other contracts we reviewed, the Navy has retained all of the 

contract administration and oversight responsibilities for the CONCAP 

contract. The Naval Facilities Engineering Command uses frequent 

communication and technically qualified staff for overseeing CONCAP 

projects. For example, at Guantanamo Bay, the site of CONCAP’s largest 

project, the contractor’s on-site project managers provide the Naval 

Facilities Engineering Command, Atlantic Division Headquarters in 

Norfolk, Virginia, with daily situation reports. In addition, Facilities 

Command engineers and engineering technicians located at Guantanamo 

Bay provide on-site quality control for the CONCAP projects and 

document their findings in quality control reports. Partnering sessions 

with customers, contractors, and subcontractors are held monthly, and 

project management officials from the command frequently visit the sites 

to inspect the projects. A command official stated that in contracting one 

must have people with the technical expertise to provide oversight of the 

job. According to officials, a minimum of at least one technically qualified 

person should be on site at each task order location. 

The Defense Federal Acquisition Regulation Supplement requires that 

undefinitized contracting actions, such as the task orders used in the 

LOGCAP program, be definitized within 180 days of beginning work or 

before 50 percent of the work is completed. While AFCAP and BSC 

complete the definitization process well within the 180-day time limit, 

many of the LOGCAP task orders have not been definitized despite the fact 

that work has been completed on some of the task orders. In addition, the 

Army has yet to hold an award fee board despite the contract requirement 

to hold a board every 6 months. The award fee board is a mechanism for 

the government to evaluate the contractor’s overall performance and 

recommend an amount of award fee. Furthermore, it is unclear if the 

award fee board, when it is held, will be able to conduct a comprehensive 

evaluation of the contractor’s performance because many LOGCAP 

customers have not been evaluating and documenting the contractor’s 

performance. 

The LOGCAP, AFCAP, and Balkans Support Contracts comprise a series 

of task orders that commit the contractor to provide services and the 

government to pay for them. The task orders are considered undefinitized 

contracting actions because the terms, specifications, and price of the task 

orders are not agreed upon before performance begins. Undefinitized 

contract actions are used when government interests demand that the 

contractor be given a binding commitment so that work can begin 

The Navy Provides 

Oversight for the CONCAP 

Contract 

The Army Has Not 

Definitized the Majority of 

LOGCAP Task Orders nor 

Has It Held an Award Fee 

Board 

Most LOGCAP Task Orders 

Have Not Been Definitized 
Page 29 GAO-04-854 Military Operations 

immediately and negotiating a definitive contract is not possible in 

sufficient time to meet the requirement. 

The Defense Federal Acquisition Regulation Supplement requires that 

undefinitized contract actions include a not-to-exceed cost and a 

definitization schedule. It also requires that the contract be definitized 

within 180 days or before 50 percent of the work to be performed is 

completed, whichever occurs first. The head of an agency may waive the 

limitations. 

While the AFCAP and BSC task orders have generally been definitized 

within the time allowed by the Defense Federal Acquisition Regulation 

Supplement, and CONCAP task orders do not require definitization,14 most 

of the LOGCAP task orders have not been definitized in the required time 

even though work began on some of the task orders in 2002. For example, 

Air Force contract administrators definitized contract terms, on average, 

in 23 days after issuing a notice to proceed. However, as of June 4, 2004, 

the Army had issued 78 task orders for the LOGCAP contract, of which 54 

require definitization. (The 24 task orders that do not require definitization 

are cost reimbursable or firm fixed-price task orders.) The Army and the 

contractor have definitized 13 of the 54 task orders, and 30 task orders are 

in the process of being definitized. In addition, the Army and the 

contractor have also agreed to a schedule for submitting qualified 

proposals for the remaining 11 task orders. Table 3 shows the task order 

award date; the contractually required definitization date; the currently 

scheduled definitization date; and the value of the task order for the 10 

oldest undefinitized task orders, which total $1.402 billion. 

 14CONCAP task orders do not require definitization since the terms, specifications, and 

price are agreed to before work begins. 
Page 30 GAO-04-854 Military Operations 

Table 3: Information on the 10 Oldest Undefinitized LOGCAP Task Orders 

Task order 

number Description Award date 

Required 

definitization date 

Scheduled 

definitization date 

Estimated value of 

the task order

13 Base camp support in 

Afghanistan 

Aug. 19, 2002 Feb. 15, 2003 July 12, 2004 $216,263,785

14 Base camp support in 

Afghanistan 

Sept. 29, 2002 Mar. 26, 2003 July 12, 2004 144,864,959

15 Base camp support in 

Djibouti 

Aug. 23, 2002 Feb. 19, 2003 Sep. 3, 2004 107,399,369

27 Base camp support in 

Kuwait 

Oct. 10, 2002 Apr. 6, 2003 July 28, 2004 425,986,448

28 Georgia Oct. 18, 2002 Apr. 16, 2003 June 28, 2004 14,088,123

31 Secretary of Defense 

Plan 

Nov. 8, 2002 May 7, 2003 June 7, 2004 1,883,681

33 Base camp support in 

Afghanistan 

Dec. 29, 2002 June 27, 2003 July 4, 2004 68,511,111

34 Seaport logistics 

support in Kuwait 

Dec. 30, 2002 June 28, 2003 July 5, 2004 136,548,891

35 Base camp support in 

Kuwait 

Jan. 8, 2003 July 7, 2003 June 21, 2004 51,912,923

36 Airport logistics 

support in Kuwait 

Jan. 4, 2003 July 3, 2003 July 19, 2004 234,100,634

Total $1,401,559,925

Sources: U.S. Army (data); GAO (analysis). 

The table does not include task order 59, which is the LOGCAP contract’s 

largest task order, with an estimated value of $3.894 billion, as it is not 

among the 10 oldest undefinitized task orders. Work began on this task 

order in June 2003 and according to the contract, it was to be definitized 

by December 2003. According to the Army Field Support Command, the 

definitization process for task order 59 began on May 6, 2004. 

According to the Commanding General of the Army Materiel Command, 

the Army and the contractor have agreed to a schedule for definitizing the 

remaining task orders, and as of May 2004 the contractor has been meeting 

that schedule. Furthermore, if the contractor does not adhere to the 

schedule, the general said that the Army intends to unilaterally definitize 

the contract. Agency officials attribute much of the delay in definitizing the 

task orders to the growing number of task orders, the frequent revisions to 

the task orders, contractor staffing problems, and the contractor’s 

antiquated accounting system. 
Page 31 GAO-04-854 Military Operations 

Timely definitization of LOGCAP task orders has been a long-standing 

problem. In 1997 we reported that the LOGCAP contracting officer (then 

the Army Corps of Engineers) and the contractor had not definitized the 

LOGCAP task orders in a timely fashion. 15 We noted that because the task 

orders had not been definitized, contract provisions that give the 

contractor major incentives to control costs were not effective. Seven 

years later, we continue to have those same concerns. In June 2004, we 

again reported that delays in defining contract terms increase the risk to 

the government by making cost control incentives in award fee contracts 

less effective. 16 We have also noted that DOD is required to ensure that the 

profit allowed on an undefinitized contract for which the final price is 

negotiated after a substantial portion of the work is completed reflects the 

possible reduced risk to the contractor.17

The LOGCAP contract requires an award fee board every 6 months, but 

the Army has yet to hold one even though work under the contract began 

in 2002. The award fee board is a mechanism for the government to 

evaluate the contractor’s overall performance and recommend an amount 

of award fee. Award fees can serve as a valuable tool to control program 

risk and encourage contractors’ performance. According to LOGCAP 

officials, several issues have delayed the award fee boards. First, the 

LOGCAP award fee plan has not been finalized; second, no one has been 

appointed to the award fee board; and third, as we noted above, many 

LOGCAP task orders have not been definitized. Definitization is an 

essential step in the award fee process because it establishes the amount 

of money available for the award fee. 

We believe that the Army will find it difficult to hold a board that 

comprehensively evaluates the contractor’s performance to date because 

some customers have not been documenting their LOGCAP experience as 

required. According to the Army’s LOGCAP guidance, DCMA and LOGCAP 

customers, as part of “Team LOGCAP,” should evaluate and document 

contractors’ performance and participate in the award fee boards.18 DCMA 

 15GAO/NSIAD-97-63. At that time, LOGCAP was being used to provide logistics support in 

the Balkans. 

16 U.S. General Accounting Office, Rebuilding Iraq: Fiscal Year 2003 Contract Award 

Procedures and Management Challenges, GAO-04-605 (Washington, D.C.: June 1, 2004). 

17 10 U.S.C. § 2326(e). 

18 Army Materiel Command Pamphlet 700-30. 

The Army Has Not Held an 

Award Fee Board for the 

LOGCAP Contract 
Page 32 GAO-04-854 Military Operations 

documents contractor performance in the periodic situation reports it 

provides the contracting officer and through site-specific performance 

evaluation boards discussed below. On the other hand, customers have 

not been asked by the contracting officer to document their experiences 

or their evaluations of the contractor’s performance, and as a result, some 

have not done so. The contracting officer told us that it is important to 

have customers’ input. However, many customers with direct knowledge 

of the LOGCAP contractor’s performance have left their unit, and 

capturing this information may be difficult. For example, at the 101st 

Airborne Division, the four key officials involved with LOGCAP—the 

Assistant Division Commander for Support, the division’s logistics officer, 

the LOGCAP focal point, and the housing officer—are all in the process of 

moving to their next posts. 

DCMA has documented customer-performance evaluations in site-specific 

performance evaluation boards at some locations. In Djibouti, the Marine 

Corps and DCMA hold performance evaluation boards every 2 months to 

evaluate the contractor’s performance and provide the contractor with 

feedback. During these meetings, key command officials and DCMA meet 

to evaluate the contractor’s performance using the evaluation criteria 

established in the LOGCAP contract. While no fee is awarded, scores are 

tabulated and provided to the contracting officer. Performance evaluation 

boards have also been held for some of the Afghanistan and Iraq task 

orders. 

Despite over 10 years of experience in using logistics support contracts, 

the Army continues to experience the same types of problems it 

experienced during earlier deployments that used LOGCAP for support. 

For example, in our previously cited 1997 report on the Army’s use of 

LOGCAP in Bosnia, we cited inadequate training as a cause of many of the 

Army’s problems in controlling contract costs.19 In that report we 

recommended that the Army provide commanders with training on the 

fundamentals of using the LOGCAP contract. In our 2000 report on U.S. 

Army, Europe’s, use of BSC we again cited the need for better training. 20

In 2004 Army officials told us again that LOGCAP training needs to be 

improved. In addition to training concerns, we also reported in 1997 that 

U.S. Army, Europe, officials felt the contractor’s cost-reporting system 

 19 GAO/NSIAD-97-63. 

20 GAO/NSIAD-00-225. 

Lessons Learned Have Not 

Been Systematically 

Collected, Shared, or 

Implemented 
Page 33 GAO-04-854 Military Operations 

used in Bosnia was not sufficient to track the cost of the operation or 

report on how LOGCAP funds were spent. As we noted above, from 

September 2003 through May 2004, DCMA expressed similar concerns 

about the LOGCAP contractor’s current cost reports. 

The Army requires that lessons learned be captured. Army Regulation 700-

137, which establishes the LOGCAP program, makes customers that 

receive services under the LOGCAP contract responsible for collecting 

lessons learned. 21 However, there are no procedures in place to ensure 

that lessons learned are collected and shared and, as we noted above, 

LOGCAP customers are generally not documenting their experiences. In 

the Army, a primary organization responsible for collecting lessons 

learned is the Army Center for Lessons Learned. The center collects and 

analyzes data from a variety of current and historical sources, including 

Army operations and training events, and produces lessons for military 

commanders, staff, and students. The Center for Army Lessons Learned 

database contains numerous articles on using logistics support contracts, 

but our review found little information on the challenges and problems 

commanders have faced in using these contracts or what commanders 

should plan for and anticipate when using them. For example, we found 

nothing on the challenges that commanders’ face in controlling costs. 

While U.S. Army, Europe, which has had the most experience in using 

logistics support contracts, has periodically advised us of the steps it has 

taken to improve its management of BSC, it has not consolidated these 

lessons learned and made them available for others. U.S. Army, Europe, 

does maintain a lessons learned database that captures the experiences of 

soldiers in Bosnia and Kosovo, including the use of LOGCAP and BSC; 

however, it might be difficult to access the database as it is not mentioned 

on the U.S. Army, Europe, Web site. In a meeting with the commanding 

general of the Army Materiel Command, he agreed that there was a need 

for a lessons-learned system, which would “push” lessons and best 

practices down to the organizations using the contract. 

The LOGCAP and the Balkans Support contracts both require that the 

contractor collect lessons learned and provide the government with them. 

Generally, these lessons learned are collected at the small task level (e.g., 

how to prevent slipping in the shower) rather than at the macro-level. 

While useful, these types of lessons-learned do not address systemic 

contract management problems or help improve contract management. In 

 21 Army Regulation 700-137. 
Page 34 GAO-04-854 Military Operations 

addition, the contractor does not have an internal lessons learned 

program. Instead, contractor personnel take lessons they have learned as 

they move from deployment to deployment, and contract to contract. 

OMB circular A-123 requires all managers of federal funds to ensure that 

cost-effective controls be implemented for the expenditure of 

appropriated funds, and the Army’s senior leadership has recognized the 

Army’s responsibility to be good stewards of the taxpayers’ dollars. While 

contract oversight is the responsibility of the contracting officer, as 

indicated in the OMB circular, all managers have a responsibility to ensure 

that agency programs operate in an economical and efficient manner and 

that costs are controlled. Efforts to control costs vary widely both across 

and within logistics support contracts. The Army and the Army Central 

Command did not make the need to control LOGCAP spending for 

activities in Iraq and Kuwait a high priority until late 2003. However, CJTF180 made controlling LOGCAP costs in Uzbekistan an important goal 

during the early days of Operation Enduring Freedom. Managers for BSC, 

CONCAP, and AFCAP recognized the need to be good stewards of the 

taxpayers’ dollars and have taken steps to control costs. We have noted 

that when the customer reviews the contractor’s work for economy and 

efficiency, savings are realized. However, steps to conduct these reviews 

have not been taken by LOGCAP customers at all task order locations. In 

addition, both the Army and the Air Force believed that at times they had 

no other option but to use their logistics support contracts to obtain goods 

and services even when they knew that other methods might have resulted 

in lower costs. For example, the Army had the contractor provide housing 

for an Army division although it was more costly than allowing the unit to 

build the housing itself because at the time the Army decided to use 

LOGCAP, it was the only means available to get the 101st Airborne 

Division into housing by a November 15, 2003, deadline. Similarly, the Air 

Force used the AFCAP contract to supply commodities for its heavyconstruction squadrons because it did not deploy with enough contracting 

and finance personnel to buy materials quickly or in large quantities 

although the use of the contract to procure and deliver commodity 

supplies required that the Air Force pay the contractor’s costs plus an 

additional award fee. 

We recognize that cost control should not be the primary consideration for 

commanders when U.S. forces are involved in major combat operations or 

when the operational environment or security situation requires the 

presence of more troops or the relocation of forces. However, cost 

The Military Services’ 

Efforts to Ensure That 

Contractors Perform 

in an Economical, 

Efficient, and Cost 

Conscious Manner 

Vary Widely 

Efforts to Control Costs 

Vary across Logistics 

Support Contracts 
Page 35 GAO-04-854 Military Operations 

constraint did not become a factor in using LOGCAP in Iraq and Kuwait 

until almost a year into the operations in Iraq. The Army Central 

Command, the Army command responsible for paying for LOGCAP, had 

no spending limits for LOGCAP until spring 2004, when a $6.5 billion limit 

was placed on the amount that could be spent in fiscal year 2004 on the 

basis of the estimated cost of required work. The spending limit followed a 

December 2003 message from the Army Vice Chief of Staff that asked units 

to control costs and look for alternatives to the LOGCAP contract and the 

realization that LOGCAP costs were growing rapidly. According to a study 

commissioned by the Army Budget Office, from September 2003 through 

January 2004, projected LOGCAP costs for services in Kuwait, Iraq, and 

Afghanistan grew from $5.8 billion to $8.6 billion. In late 2003, the Army 

Central Command requested that “Team LOGCAP” review the cost 

estimates for the task orders being used in Kuwait, Iraq, and Afghanistan 

to determine if the cost estimates could be reduced. According to the 

Army Budget Office, this review reduced the estimated cost of using 

LOGCAP in the Army Central Command’s area of responsibility from 

$8.6 billion to $6.5 billion, although most of the reduction came from the 

use of more accurate cost data rather than a reduction in requirements or 

more economical approaches. According to the Army Central Command, 

commanders in the area of operations have established additional review 

procedures. For example, all requests for services greater than $50,000 

must be approved by a general officer before the requests can be 

considered for approval by the local acquisition review board. 

Additionally, all requests that would add services to the LOGCAP contract 

valued at more than $10 million must be reviewed by a LOGCAP and 

service contract review board. Members of the review board include the 

deputy commanding general for support and other high-ranking members 

of the command staff. 

As we noted earlier, the Army Audit Agency examined the use of LOGCAP 

in Turkey,22 Afghanistan,23 and Uzbekistan.24 They reported that 

commanders in each location had adequate procedures in place to control 

costs. In particular, the Army Audit Agency reported that program 

 22 U.S. Army Audit Agency, Management of Resources-Army Forces Turkey, Army Audit 

Agency, A-2004-0033-IMU (Oct. 23, 2003). 

23 U.S. Army Audit Agency, Logistics Civil Augmentation Program-Camp Stronghold 

Freedom, Uzbekistan, Army Audit Agency, A-2003-0110-IMU (Dec. 21, 2002). 

24 U.S. Army Audit Agency, Operation Enduring Freedom-Logistics Civil Augmentation 

Program, Army Audit Agency, A-2004-0156-IMU (Feb. 27, 2004). 
Page 36 GAO-04-854 Military Operations 

managers in Uzbekistan and Turkey had made cost control a priority and 

in Afghanistan had taken appropriate action to control costs and ensure 

effective stewardship. 

Cost control has long been a matter of importance for contract 

administration officials for CONCAP, AFCAP, and BSC. Navy and Air 

Force officials believe that using the CONCAP and AFCAP contracts to 

fulfill a requirement is often the most expensive option available; 

consequently, they have taken steps to control costs. For example, to 

control costs, CONCAP establishes a budget for each project and works 

closely with the contractor and customer to agree on requirements and 

costs before the project gets under way. 

The AFCAP contracting officer and program managers have retained costcontrol responsibilities and review and substantiate the contractor’s cost 

estimate at the beginning of each task order. At the initiation of each task 

order, AFCAP contract administrators negotiated costs proposed by the 

contractor in order to receive advantageous pricing for the government. 

Additionally, the government’s review of proposed costs allows it to better 

define its requirements for the contractor. We reviewed several examples 

of the memoranda detailing these negotiations and found that the 

government developed cost estimates that were significantly less than the 

contractor’s original proposal. For example, the government achieved 

reductions that ranged from 6 percent to 97 percent on the basis of the 

review and substantiation of the contractor’s cost proposals. Regarding 

the largest proportionate reduction, the AFCAP contractor estimated that 

it would cost $23.1 million to provide and maintain equipment for Air 

Force construction units However, in reviewing this proposal, the AFCAP 

contract administrator determined that the government had overstated its 

requirements, resulting in a 97 percent, or $22.3 million reduction. 

U.S. Army, Europe’s, focus on cost control has increased since BSC was 

first awarded. Beginning in the fall of 2001, U.S. Army, Europe, has taken a 

number of steps to control the costs of BSC, as shown below: 

• In fiscal year 2003, resource managers established a cost reduction goal 

for the contract. 

• Command leadership issued guidance on the need to be cost conscious. 

• Cost control became the most important criterion for determining the 

contractor’s award fee. 

• The command sets cost-control goals for the contractor at every award fee 

board. 
Page 37 GAO-04-854 Military Operations 

Customers who use the logistics support contracts have a role in ensuring 

that the contracts are used in an economical and efficient manner, and our 

previous work has shown that when government officials (including 

customers) review the contractor’s work for economy and efficiency, 

savings are generated. For example, in part as a result of our previously 

cited 2000 report on managing BSC, U.S. Army, Europe, has developed a 

proactive approach to managing BSC and ensuring that the contractor 

provides services in an economic and efficient manner. U.S. Army, Europe, 

reported savings of approximately $200 million by reducing services and 

labor costs, and by closing or downsizing camps that were no longer 

needed. The $200 million in savings is about 10 percent of the current 

contract ceiling price of $2.098 billion. In addition to these savings, U.S. 

Army, Europe, routinely sends in teams of auditors from its internal 

review group to review practices and to make recommendations to 

improve economy and efficiency. Examples of the audit results are as 

follows: 

• In March 2001, U.S. Army, Europe, auditors reported that shuttle bus 

services within Task Force Falcon (Kosovo) were not well utilized and 

that the services should be reduced.25 The auditors estimated that reducing 

bus service would result in a savings of more than $700,000 during the 

remaining 3 years of BSC. 

• In September 2001Army auditors recommended that the Army provide the 

contractor with gravel and sand as government-furnished equipment partly 

because the contractor was maintaining excessive inventories of these 

materials.26 Auditors estimated that by providing sand and gravel as 

government-furnished materiel, the Army could save approximately 

$365,000 over the remaining 3 years of the contract. 

The Marines have also taken actions to ensure that the contractor is 

working in a cost-efficient and economical manner. When Marine Corps 

forces replaced Army forces in Djibouti in December 2002 (to provide 

humanitarian assistance and fight the Global War on Terrorism), they also 

took over responsibility for funding LOGCAP services. Marine 

commanders immediately undertook a complete review of the statement 

of work and were able to reduce the $48 million task order by an 

 25 U.S. Army, Memorandum for the Chief of Staff, Task Force Falcon, Review of Shuttle Bus 

Service in Task Force Falcon, Audit Report TFF-056 (Mar. 22, 2001)(unpublished). 

26 U.S. Army, Memorandum for the Chief of Staff, Task Force Falcon, Cost of New and 

Recurring Gravel and/or Sand Requirement, Audit Report TFF-068 (Sep.17, 

2001)(unpublished). 

Steps to Ensure That the 

Contractors Provide 

Service in an Economical 

and Efficient Manner Have 

Not Been Taken at All Task 

Order Locations 
Page 38 GAO-04-854 Military Operations 

estimated $8.6 million, or 18 percent.27 The savings came by eliminating or 

reducing services in the following areas: 

• building and construction projects—$2.8 million, 

• equipment—$2.9 million, 

• labor hours—$2.0 million, and 

• materials and miscellaneous items—$0.892 million. 

Marine Forces Central Command deploys teams of subject matter experts 

to Djibouti semiannually to identify services that could be eliminated, 

reduced, or changed. Since its initial review, the Marines have identified 

potential additional savings totaling more than $2 million, including 

$75,000 a year as a result of having the contractor switch from a popular 

commercial laundry detergent to a detergent available through the Marine 

Corps’ supply system. 

In the Balkans and in Afghanistan, command policy requires a periodic 

review of all services being provided by contractors to determine if the 

appropriate services as well as the appropriate level of services are being 

provided. During our visit to Bosnia in October 2002, commanders 

reported that these reviews resulted in a yearly cost savings of 

approximately $120,000.28 Among the services reduced were cleaning and 

janitorial services and operating hours for wash racks and fuel service 

facilities. U.S. Army, Europe, requires that these reviews be conducted 

three times a year prior to the award fee boards. In Afghanistan CJTF-180 

guidance requires that the reviews be held monthly; however, the Army 

Audit Agency noted that these reviews were not taking place. In response 

to the Army Audit Agency report, the command revised its guidance to 

include procedures for the reviews. 

On the basis of our visit to Kuwait in December 2003 and a review of 

CJTF–7 policies, it appears that neither the Army Central Command in 

Kuwait nor CJTF–7 in Iraq have established similar policies mandating 

regularly scheduled reviews of services. However, some reviews of 

services have been undertaken since January 2004, as shown below: 

 27 Since the Marines assumed this mission, they have added requirements to the task order. 

As a result the May 2004 estimated value of the task order is $107 million. This amount 

would have been higher if not for the Marine Corps’ efforts to control costs. 

28 The $120,000 is in addition to the U.S. Army, Europe, estimated cost savings of $200 

million mentioned above. 
Page 39 GAO-04-854 Military Operations 

• On the basis of the Army Central Command estimate that $2.6 million 

could have been saved in March 2004 if it removed food service from the 

LOGCAP contract and contracted directly for food service at six locations 

in Kuwait, we calculated that this could save almost $31 million a year. 

The transition has been directed to take place in June 2004, and a schedule 

has been established setting out the dates on which each location is to 

transition. By eliminating the use of LOGCAP and making the LOGCAP 

subcontractor the prime contractor, the command reduced meal costs by 

43 percent without a loss of service or quality. 

• During a review of task order 59, change 7, CJTF-7 was able to reduce the 

estimated cost of the task order by over $108 million by eliminating 

services and an extra dining and laundry facility. 

Circumstances did not always allow the Army and the Air Force to use a 

more economical and efficient means to obtain services. Both the Army 

and the Air Force believed they had no other options but to use their 

logistics support contracts to obtain goods and services even when they 

knew that other methods would have resulted in lower costs. For example, 

as discussed below, CJTF-7 concluded that it had no choice but to use the 

LOGCAP contract to provide housing for the 101st Airborne Division 

despite the fact that CJTF-7’s own cost estimate showed that having the 

contractor provide the housing would cost the Army tens of millions of 

dollars more than having the 101st Airborne Division build its own 

housing. Air Force engineering squadrons used the AFCAP contract to 

provide supplies for construction projects because they were not able to 

deploy with sufficient assets to obtain the needed supplies. However, by 

using the contractor, the Air Force paid an award fee on task orders with 

limited risk. 

In July 2003, a decision was made to extend the deployment of the 101st 

Airborne Division through February 2004. As a result, getting the division’s 

soldiers out of tents before the onset of winter in northern Iraq became a 

priority for division leadership. To achieve the division’s goal of getting its 

soldiers out of tents by November 15, 2003, the division, in conjunction 

with CJTF-7, considered three courses of action as follows: 

• Allow the division to build its own housing, purchasing the necessary 

material and using the division’s engineer brigades to do the construction. 

This was the division’s preferred option, as division leadership felt it 

would get the troops “out of tents” by November 15, 2003, and also provide 

a valuable training opportunity for its engineers. However, CJTF-7 

concluded that this was not a viable option, since it would require the use 

Circumstances Did Not 

Always Allow the Army 

and Air Force to Select a 

More Economical and 

Efficient Method to Obtain 

Services 

The Need for Housing Made 

Using LOGCAP the Only Viable 

Choice for the Army 
Page 40 GAO-04-854 Military Operations 

of military construction funds, which CJTF-7 believed were no longer 

available. According to an official with CJTF-7, the task force did not 

believe that military construction funds would be available until November 

2003 at the earliest, so work would not start until December 2003 and 

possibly as late as February 2004.29

• Divide the division’s entire housing requirement into 33 individual projects 

so that the individual projects could be built with operation and 

maintenance funds, allowing the division to build its own housing.30 CJTF7 concluded that this was not a legally sound option, as it would involve 

dividing one project into several projects. 

• Obtain the housing under the LOGCAP contract. The Army determined 

that CJTF-7 could use operation and maintenance funds to buy movable 

buildings, since the buildings could be moved as necessary for mission 

requirements unlike nonmovable buildings, which would require military 

construction funds. This was the course of action ultimately accepted, and 

in early October 2003, the administrative contracting officer directed the 

LOGCAP contractor to provide the housing for the 101st Airborne 

Division. The statement of work required that the housing be provided by 

November 15, 2003. However, according to officials from both CJTF-7 and 

the 101st Airborne Division, the contractor did not meet the scheduled 

delivery date. 

The decision to use the LOGCAP contract carried a substantial cost 

premium. The division estimated that it would cost about $25 million to 

build its own housing. The $25 million included building material for the 

housing, as well as showers, power generation and heating and air 

conditioning. Latrines were not included in the cost estimate and were to 

be provided by a contractor. The government’s cost estimate to use 

LOGCAP to provide housing, showers and power generation, was about 

$65 million plus over $8 million in administrative costs and potential 

award fee. The $65 million included the purchase of (1) reusable 

containers for housing and showers, (2) maintaining the containers, 

(3) installing the units at locations around northern Iraq, and (4) procuring 

and installing power. In discussions with CJTF-7 on how housing was 

obtained, we were told that using the LOGCAP contract was more costly 

 29 This timeline is based on the CJTF-7 official’s assumption that the fiscal year 2004 

Supplemental Appropriation for the global war on terrorism would be passed by November 

2003. 

30 Congress allows the services to use funds from its operations and maintenance 

appropriation to build construction projects with an estimated cost of less than $750,000. 

Projects costing over $750,000 generally need congressional notice. 
Page 41 GAO-04-854 Military Operations 

then having the 101st Airborne Division build the housing units 

themselves; however, at the time they made the decision to use LOGCAP, 

they concluded that it was the only legal means available to get the 101st 

into housing by the November 15 deadline. 

Although buying the trailers was more expensive than allowing the 

division to build its own housing, the cost of the two options is not directly 

comparable because the trailers are reusable and moveable whereas the 

housing built by the division is not. 31 Should the trailers ultimately be 

reused elsewhere, thus reducing future housing costs, the disparity 

between the options could be reduced in the long term. At this time, how 

well the trailers will hold up in the Iraqi climate and the extent to which 

the trailers will be reused once they are no longer needed in northern Iraq 

is unknown, so a full cost comparison cannot be done. 

The Air Force has used the AFCAP contract to supply commodities such 

as building materials, tools, and equipment for its heavy construction 

squadrons. According to Air Force officials, engineering squadrons use the 

AFCAP contract for commodities because they do not deploy with enough 

contracting and finance personnel to buy materials quickly or in large 

quantities. Additionally, the U.S. Agency for International Development 

has used the contract to provide disaster relief and humanitarian 

assistance supplies. In many instances, the contractor provided a service 

for the customer, such as equipment maintenance, in addition to the 

procurement of the supplies. In other cases, however, the contractor 

simply bought the supplies and delivered them to the customer. The 

contractor received more than $2 million in award fees since February 

2002 for these commodity supply task orders. While contractually 

permitted, the use of a cost-plus award fee contract as a supply contract 

may not be cost-effective. In these instances, the government reimburses 

the contractor’s costs and pays additional award fees for task orders with 

little risk. 

The Air Force and other federal agencies that use the contract to procure 

and deliver commodity supplies are required to pay the contractor’s costs 

plus an additional award fee—a 1 percent base fee and up to 6 percent 

award fee—on each task order performed. Air Force program managers 

have recognized that the use of a cost-plus award fee contract to buy 

commodities may not be cost-effective. According to these officials, the 

 31 The building material might have been reused, however, as it was in the Balkans. 

The Air Force and Others Have 

Used AFCAP to Purchase 

Supplies Despite the Fact That 

It May Not Be a Cost-Effective 

Use of the Contract 
Page 42 GAO-04-854 Military Operations 

next version of the contract may allow for either firm-fixed prices or costplus fixed fee procurements on these types of task orders. Firm-fixed price 

or cost-plus fixed fee contracts will reduce the potential amount of fees 

paid to the contractor, thereby providing the government with a more 

cost-effective alternative. 

Given the scope and complexity of logistics support contracts, there were 

not always enough personnel responsible for contract oversight and 

monitoring the performance of the contractor, and oversight personnel 

have not always been adequately trained. DOD deploys civilian and 

military personnel to provide contract administration and oversight of its 

logistics support contractors. For example, DCMA has deployed 

administrative contracting officers to several countries throughout 

southwest and central Asia and the Balkans to provide on-site contract 

administration. The Defense Contract Audit Agency has provided audit 

assistance in contingency locations to ensure that the costs claimed by the 

logistical support contractors are appropriate. The military services have 

also deployed personnel to assist unit commanders that are receiving 

contract services and to monitor the performance of the contractor. 

We could find no guidelines on the appropriate number of DCMA oversight 

personnel and hence relied on the judgments expressed in DCMA’s 

situation reports and the views of oversight personnel with whom we 

spoke as to the adequacy of staffing. A DCMA official told us there are no 

specific criteria for determining the size of a deployed contract 

administration team. Each request for assistance is reviewed, and the team 

size is based on the risk associated with the contract. DCMA has 

recognized its human capital challenges, including its staffing challenges, 

and has developed a strategic plan to address them. 

DCMA officials believe that additional resources are needed to effectively 

support the LOGCAP and AFCAP contracts. Administrative contracting 

officers in Iraq, for example, have been overwhelmed with their duties as a 

result of the expanding scope of some of the task orders. Additionally, 

some Army and Air Force personnel with oversight responsibilities did not 

receive the training necessary to effectively accomplish their jobs. On the 

other hand, the Navy has provided contract monitors that are qualified and 

trained for their responsibilities under the contract. In addition, military 

units receiving services from the contracts generally lacked a 

comprehensive understanding of their roles and responsibilities. For 

example, officers do not understand their role in establishing LOGCAP 

requirements. 

DOD Did Not Always 

Have Enough 

Personnel to Manage 

Its Logistics Support 

Contracts, and 

Available Personnel 

Often Lack the 

Training to Effectively 

Use and Monitor the 

Contract 
Page 43 GAO-04-854 Military Operations 

Several defense agencies and the military services deploy civilian and 

military personnel to assist with contract administration and oversight. 

For example, as of April 14, 2004, DCMA had approximately 65 personnel 

deployed to locations in southwest and central Asia to provide on-site 

contract administration. The agency has contracting officers in Iraq, 

Kuwait, Qatar, Afghanistan, Uzbekistan, and Djibouti in support of the 

LOGCAP and AFCAP contracts, as well as other contracts. In addition, 

three DCMA personnel in Bosnia and three in Kosovo have been deployed 

to support the Balkans Support Contract and other contracts. 

The Defense Contract Audit Agency provides contract oversight and audit 

assistance for the military at deployed locations. The agency planned to 

have 31 auditors in its Iraq branch office by May 31, 2004, to oversee the 

LOGCAP contract as well as other contracts. Defense Audit Agency offices 

located at contractor facilities in the United States also provide contract 

oversight. The agency oversees the Balkans Support contractor on request 

from the Corps of Engineers–Transatlantic Programs Center. 

The Army has also deployed military personnel to assist unit commanders 

in implementing services provided by its logistics support contractor. As 

of April 14, 2004, 19 members of the 66-person support units were 

deployed in the Persian Gulf and central Asia. Members of the units are 

not contracting officers and cannot direct the contractor nor make 

changes to the contract. Members advise commanders on LOGCAP and 

help customers develop statements of work. Members also develop 

independent government cost estimates. Frequently, the unit members are 

responsible for several task orders concurrently. 

While the defense agencies have effectively supported the military in these 

locations, DCMA administrative contracting officers in Iraq believe that 

they need an increase in the number of qualified staff to fully meet their 

oversight mission. DCMA not only provides contract administration for the 

LOGCAP and AFCAP contracts, it also supports other large contracts in 

Iraq. The Army requires that DCMA review and approve purchase 

requisitions valued at more than $2,500 for LOGCAP task orders. A DCMA 

official who served in Iraq estimated that the six administrative 

contracting officers in his command reviewed from 200 to 500 requisitions 

a week. Another DCMA official indicated a need to hire contracting and 

procurement technicians to improve the operations of DCMA in Iraq. 

Moreover, Marine Forces, Central Command officials we spoke to believe 

that the number of DCMA personnel providing contract oversight in 

Djibouti is insufficient. As we noted above, DCMA has approximately 

65 contracting officials deployed to support the LOGCAP and AFCAP 

Limited Number of 

Personnel Support the 

Oversight of the Logistics 

Support Contracts 
Page 44 GAO-04-854 Military Operations 

contracts in the Central Command’s area of responsibility having an 

estimated value of more than $6.5 billion. In contrast, DCMA deployed a 

30-member team to administer the LOGCAP contract in Bosnia in 1996. At 

that time, the value of the work in Bosnia was approximately 

$461.5 million. Essentially, in the Central Command’s area of 

responsibility, including Iraq, DCMA had slightly more than twice the 

number of people it had in the Balkans and an estimated value of work 

that is almost 15 times more than in the Balkans. 

DCMA officials in southwest Asia told us that they need an additional 

administrative contracting officer and property administrator to account 

for $2 million worth of construction tools and equipment that are currently 

unaccounted for in the AFCAP contract. Under AFCAP task orders in 

southwest and central Asia, the procuring contracting officer delegated 

certain administrative responsibilities to the contracting officers, to 

include property administration. However, DCMA did not assign a 

property administrator for the AFCAP contract. According to officials, 

DCMA deployed one property administrator who was responsible for all 

property in the theater. An additional administrative contracting officer 

and a property administrator would assist the Air Force to close out the 

approximately 80 completed task orders in southwest Asia. The Air Force 

cannot close out completed task orders until the property is accounted 

for. 

According to DCMA, it has limited resources to support the military at 

deployed locations because staffing has been reduced by 55 percent over 

the last 11 years. DCMA uses its in-plant personnel, who oversee the 

acquisition of major weapon systems, such as aircraft, to support its 

contingency contract administration services. Increasing the number of 

deployed DCMA personnel means reducing the number of DCMA 

personnel at defense plants. One possible approach to overcome staffing 

shortages is being tried in the Balkans. DCMA has reduced its presence 

there and has replaced some U.S. citizens with contracted host country 

nationals that assist the administrative contracting officers and quality 

assurance personnel. This has allowed DCMA to adjust its limited pool of 

personnel. 
Page 45 GAO-04-854 Military Operations 

The personnel deployed by the military services to monitor the 

performance of the logistical support contractors have not always 

received the training necessary to accomplish their missions. Army 

guidance on the use of the LOGCAP contract describes the logistics 

support unit as a significant player in LOGCAP event execution. 32

Logistics support unit members may be called upon to write statements of 

work, prepare independent government cost estimates, review the 

contractor’s cost estimates and technical plans, and act as an interface 

between the customer and the contractor. According to LOGCAP officials, 

the original members of this unit were deployed in the early stages of 

Operation Iraqi Freedom. When the original members returned home, the 

unit was staffed with individuals with no prior LOGCAP or contracting 

experience. For example, most of the replacement support unit members 

we met during our December 2003 trip to Kuwait had received only a 2-

week training session before deploying and had little experience or 

training in developing independent government cost estimates. These cost 

estimates are used to judge the reasonableness of the contractor’s cost 

proposal and to determine if sufficient resources are available to fund the 

statement of work. In a 2004 report on the use of LOGCAP in Afghanistan, 

the Army Audit Agency also noted that members of the logistics support 

unit needed better training, particularly when it came to developing 

independent government cost estimates.33

The Air Force has not consistently provided training for its personnel 

overseeing the performance of the AFCAP contractor. The Air Force 

appoints quality assurance evaluators (who are subject matter experts) to 

ensure that the contractor is performing in accordance with the task order 

statement of work. Air Force guidance requires quality assurance 

personnel to be appointed and trained prior to assuming quality assurance 

responsibilities.34 However, the Air Force quality assurance evaluators 

assigned in southwest and central Asia were not consistently appointed, 

trained, or performing their responsibilities. Specifically, AFCAP contract 

administrators have not consistently provided Air Force quality assurance 

evaluators with appointments and training. For example, while a quality 

assurance evaluator had been appointed for a major construction project 

 32 Army Materiel Command Pamphlet 700-30. 

33 Army Audit Agency A-2004-0156-IMU (Feb. 27, 2004). 

34 U.S. Air Force, Performance Based Service Contracts, Air Force Instruction 63-124 

(Apr. 1, 1999). 

Military Members with Key 

Oversight and 

Management Roles Either 

Had No Training or 

Insufficient Training to Do 

Their Jobs 
Page 46 GAO-04-854 Military Operations 

in Qatar, the evaluator told us that he had received no training on the 

AFCAP contract or on his duties and responsibilities as an evaluator. 

Quality assurance evaluators have also not been effectively documenting 

the performance of the contractor. Without comprehensive performance 

evaluations conducted regularly by quality assurance evaluators, the 

government has had difficulty in determining the amount of fee to award 

the contractor. 

Conversely, the CONCAP contract administrator has technically qualified 

staff providing day-to-day oversight at specific job sites. During our visit to 

Guantanamo Bay, Cuba, we observed that the Navy Facilities Engineering 

Command has the basic construction contract administration functions 

performed by personnel in one of the three following general categories: 

• Engineers, including degreed engineers or architects, with many licensed 

by one or more states. In addition to formal education and licensure, 

engineers receive Navy-specific training in safety, quality management, 

and other construction-related areas. Typically, engineers serve in 

contracting officers’ technical representative positions and Navy technical 

representative positions. 

• Engineer technicians that are generally trade-specific individuals with 

extensive construction-related background. Their positions are often titled 

as “quality assurance representative.” As with engineers, they receive 

Navy-specific training as part of their position. In certain instances, 

technicians may serve as Navy technical representatives, usually when the 

work is of limited scope. In those cases where an engineer serves as the 

Navy technical representative or contracting officer’s technical 

representative, it is common practice to have one or more technicians 

working under the technical supervision of the engineer in the 

management and oversight of contract work. 

• Contract specialists and contracting officers that have extensive education 

and training requirements. All Navy Facilities Engineering Command 

personnel in this category are appropriately trained, certified, and 

warranted at the appropriate level. 

Customers using the logistics support contracts also have a role in 

ensuring that the contracts are used in an economical and efficient 

manner, yet many are unaware that they have any role in the contract 

management or oversight process. We found that officers and 

noncommissioned officers using the LOGCAP and AFCAP contracts had 

little understanding of these contracts and did not fully understand their 

contract management responsibilities because they had had little or no 

DOD Personnel Often 

Lacked the Training to 

Effectively Use the 

Contract 
Page 47 GAO-04-854 Military Operations 

training on using contractors, including the LOGCAP contractor, on the 

battlefield. In interviews, Army customers told us that they knew nothing 

about LOGCAP before they deployed and had received no training 

regarding their roles and responsibilities as a LOGCAP customer. For 

example, a senior logistics officer in the 101st Airborne Division told us 

that the Army does not educate its battalion and brigade commanders on 

LOGCAP or on the Army regulation governing the contract. Furthermore, 

he noted that information about the LOGCAP contract was not included in 

any of his precommand training courses. 

In our 2003 report on DOD’s use of contractors to support deployed 

forces, 35 we noted a lack of training or education for commanders or 

senior personnel on the use of contractors, and we recommended that 

DOD develop training courses for commanding officers and other senior 

leaders who are deploying to locations with contractor support. DOD 

agreed with our recommendation. We also noted in our 2003 report that 

U.S. Army, Europe, had responded to our earlier concerns regarding the 

lack of training for commanders and now includes contract familiarization 

during mission rehearsal exercises for the Balkans deployments. 

The Commanding General of the Army Materiel Command has also 

expressed his concerns about the lack of training regarding LOGCAP for 

soldiers. In an e-mail message to the Army Deputy Chief of Staff for 

Logistics discussing reasons why the LOGCAP contractor is slow to 

respond to the Army’s needs, the general said: 

“The first is the lack of preparation our officers have for dealing with LOGCAP: we don’t 

train this as a capability that our officers consider during deliberate planning. This 

unfamiliarity with LOGCAP in general contributes to considerable delay up front, as we 

rely on the requesting unit to generate the statements of work that are the catalyst for the 

entire process . . . .” 

In our previously cited 2000 report on BSC, we highlighted the problem of 

poorly written statements of work. For example, we noted that the Army 

did not provide the contractor with guidance regarding the level of power 

generation redundancy (i.e., backup power) needed in Kosovo. As a result, 

the contractor bought and leased generators to provide 100 percent power 

redundancy. Army officials later told us that much less redundancy was 

needed and by reducing the redundancy and shifting from leased to 

 35 GAO-03-695. 
Page 48 GAO-04-854 Military Operations 

purchased generators, the Army was able to save approximately $85 

million over 5 years. The problem of poorly written statements of work 

continues with the current LOGCAP contract. For example, task order 59 

requires the contractor to provide water for units within 100 kilometers of 

designated points. However, the statement of work does not indicate how 

much water needs to be delivered to each unit or how many units will 

need water. The statement of work also requires that the contractor 

maintain the capability to recover vehicles. According to the contractor’s 

deputy project manager, problems with this requirement include the 

following: (1) there is no indication if the contractor will provide the 

primary vehicle recovery support or be the backup to the Army, (2) the 

time frame for recovery is not specified, and (3) whether the contractor is 

supposed to recover vehicles both on and off road is not specified. 

Without this information, the contractor cannot determine how to meet 

the needs of the Army and may take excessive steps to ensure customers’ 

satisfaction. According to LOGCAP guidance, statements of work must be 

specific in detail and to the point. 

AFCAP program managers expressed frustration that Air Force customers 

lacked institutional knowledge of the contract. AFCAP program managers 

stated that they have attempted to institutionalize training for the Air 

Force’s major commands but have been unsuccessful to date in 

convincing the commands to send representatives for training. According 

to the program managers, the Air Force’s major commands are not 

interested in the AFCAP contract until its services are needed; whereupon 

the program managers are required to train the command personnel. 

Over the past few years, DOD and the Army have developed doctrine and 

guidance for using logistics contracts to support operations, which include 

the early identification of requirements, and involving the contractor in 

developing comprehensive statements of work as recurring themes. These 

principles support a concept that when the contractor has adequate time 

to plan and prepare to accomplish its mission, service quality improves 

and costs are lowered. However, planning for the use of the LOGCAP 

contract to support the troops in Iraq did not begin until after the fall of 

Baghdad, was not comprehensive, and did not include the contractor. 

Instead, a piecemeal approach to planning occurred and resulted in 

constant changes to the statement of work and forced the contractor to 

scramble to meet contract requirements, resulting in unmet expectations, 

lower-quality services, and unnecessary costs. Even considering the 

inherent uncertainty of wartime planning, a more deliberate approach 

Conclusions 
Page 49 GAO-04-854 Military Operations 

involving the contractor, as discussed in the doctrine and guidance, would, 

in our opinion, have resulted in a better product at a lower cost. 

Our previous and current work has repeatedly shown that when 

customers of logistics support contracts review the types and level of 

services provided by contractors for both economy and efficiency, savings 

can be realized. While some customers have developed procedures for 

periodic reviews of recurring services using subject matter experts, others 

have not. Until all customers develop review programs, DOD will have 

limited assurance that it is paying only for services it truly needs. 

DOD, particularly the Army, has had more than 10 years of experience 

using logistics support contracts such as LOGCAP and the Balkans 

Support Contract, yet it often makes the same mistakes in new 

deployments. Unless it establishes a lessons learned program, DOD is 

likely to repeat the same costly mistakes it has made since first using 

logistics support contracts to support deployed forces. 

The lack of contract training for operational commanders, customers, and 

others with responsibilities to use, manage, and oversee logistics support 

contracts has adversely affected the use of such contracts to support 

deployed forces in contingency operations. Commanders and other senior 

leaders must understand that they have a key role in identifying 

requirements, ensuring that the contractor works in a cost-effective 

manner, and evaluating contractors’ performance. Without such an 

understanding, the government’s ability to control contract costs and 

ensure quality service at the best possible price is severely limited. 

To promote better planning, improve oversight, and improve efficiency 

when using logistics support contracts to support military operations, we 

recommend that the Secretary of Defense ensure that the four following 

actions be taken: 

• Emphasize to the heads of DOD components the need to comply with 

guidance to identify operational requirements that are to be provided by 

contractors early in the planning process and involve the contractor in the 

planning, where practicable. If security concerns prevent the involvement 

of the contractor, direct that unclassified statements of work be developed 

and provided to the contractor. 

• Direct the service secretaries to establish teams of subject matter experts 

who will periodically travel to locations where contractor services are 

being provided by logistics support contracts to evaluate and make 

Recommendations for 

Executive Action 
Page 50 GAO-04-854 Military Operations 

recommendations on (1) the appropriateness of the services being 

provided, (2) the level of services being provided, and (3) the economy 

and efficiency with which the services are being provided. 

• Implement a department-wide lessons learned program that will capture 

the experiences of others who have used logistics support contracts. This 

system should include lessons learned from operations as well as lessons 

learned and best practices documented by DOD’s audit agencies. 

• Develop and implement training courses for commanding officers and 

other senior leaders who are deploying to locations with contractor 

support. Such training should provide information on the role of 

commanders and others in the contracting process. Specifically, the 

training should provide instruction on (1) developing and documenting 

requirements, (2) ensuring that contractors perform in a cost-effective 

manner, and (3) assessing contractors’ performance. The training should 

also include information on the limits of commanders’ authority vis-à-vis 

contractors and include information on the roles and responsibilities of 

DCMA and other oversight agencies. 

In written comments on a draft of this report the Acting Deputy Secretary 

of Defense for Logistics and Materiel Readiness stated that the department 

concurred with the report and all its recommendations. The department’s 

comments are reprinted in appendix II. 

In its comments, DOD described the steps it plans to take to implement 

our recommendations. Regarding our recommendations on emphasizing 

the need to comply with guidance on planning for the use of contractors 

and the establishment of teams of subject matter experts to evaluate and 

make recommendations where appropriate on the appropriateness and 

level of services being provided and the economy and efficiency with 

which they are being provided, DOD noted the discussion in the draft 

report on the existing guidance and efforts to review services. The 

department stated that it will reiterate this guidance and the need for 

subject matter experts to make periodic visits in policy memoranda and in 

such issuances as a draft DOD instruction on procedures for the 

management of contractor personnel during contingency operations. 

Regarding our recommendation to implement a department-wide lessons 

learned program that will capture the experiences of others who have 

used logistics support contracts, DOD stated that it will investigate how 

best to capture lessons learned. DOD said it initially will explore the 

possibility of establishing such a database as part of the Logistics 

Community of Practice at the Defense Acquisition University. Regarding 

our recommendation for training for commanding officers and other 

Agency Comments 

and our Evaluation 
Page 51 GAO-04-854 Military Operations 

senior leaders who are deploying to locations with contractor support, 

DOD stated that it will begin discussions with the Defense Acquisition 

University, the services, and the Defense Contract Management Agency on 

how best to unify current disparate training and create a training 

capability that will be applicable and available to all. DOD said that an 

initial proposal would be to establish a continuous learning-type training 

module that could be utilized by each of the mid- and senior- level service 

schools, including staff and war colleges. DOD will aim to get such a 

module into the Defense Acquisition University’s plans for fiscal year 2005 

development. 

We also provided an opportunity for the contractors on the logistics 

support contracts we reviewed— Kellogg Brown and Root for LOGCAP, 

BSC, and CONCAP and Readiness Management Support L.C. for AFCAP— 

to comment on a draft of this report and Readiness Management Support 

provided written comments. In its comments Readiness Management 

Support stated that it concurred with many statements in the report and 

provided several comments to clarify its position regarding the costs 

associated with logistics support contracts and the role of the contractor 

in property administration under the AFCAP contract. The company’s 

comments and our response are contained in appendix III. 

We plan no further distribution of this report until 10 days after its 

issuance unless you publicly disclose its contents earlier. At that time we 

will send copies to the Chairman, House Committee on Government 

Reform; the Chairman, House Committee on Energy and Commerce; the 

Chairman and Ranking Minority Member, Senate Committee on 

Governmental Affairs; the Chairmen and Ranking Minority Members, 

House and Senate Committees on Armed Services, and other interested 

congressional committees. We are also sending a copy to the Secretary of 

Defense and the Director, Office of Management and Budget, and will 

make copies available to others upon request. In addition, the report will 

be available at no charge on the GAO Web site at http://www.gao.gov.
Page 52 GAO-04-854 Military Operations 

If you or your staff have any questions, please contact me on 

(757) 552-8100 or by e-mail at curtinn@gao.gov. Major contributors to this 

report are included in appendix IV. 

Neal P. Curtin 

Director, Defense Capabilities and Management 
Appendix I: Scope and Methodology 

Page 53 GAO-04-854 Military Operations 

We focused our efforts on four contracts: (1) the Army’s Logistics Civil 

Augmentation Program (LOGCAP) Contract; (2) the Air Force’s Contract 

Augmentation Program (AFCAP) Contract; (3) the U.S. Army, Europe’s 

Balkans Support Contract (BSC); and (4) the Navy’s Construction 

Capabilities (CONCAP) Contract. We selected these contracts (1) on the 

basis of their size and scope and (2) to include more than one of the 

military services. 

We took a number of actions to assess the effectiveness of the Department 

of Defense’s (DOD) planning for the use of these logistics support 

contracts. We reviewed the guidance prepared by the Chairman, Joint 

Chiefs of Staff; the Army’s regulations and guidance related to planning for 

contractor support to deployed forces; and an array of additional guidance 

specific to each of the logistics support contracts as follows: 

• the Army Materiel Command’s LOGCAP battle book, 

• U.S. Army, Europe, Users’ Guide to the Balkans Support Contract and 

operating procedures written by the Balkans Support Contract 

procurement contracting office on task order development, 

• the Air Force’s guide for using the Air Force’s AFCAP contract—the 

AFCAP Concept of Operations, and 

• the Navy’s CONCAP Users’ Guide. 

We met with representatives of the Army Materiel Command’s LOGCAP 

program management office to discuss LOGCAP planning and met with 

the Army Materiel Command’s LOGCAP planners for Europe and 

southwest Asia to determine their roles in planning to use LOGCAP to 

support Operation Iraqi Freedom. Additionally, we met with 

representatives of U.S. Army, Europe, to discuss planning for both BSC 

and the command’s use of the LOGCAP contract and with representatives 

of the Army Central Command to discuss their role in planning for 

Operation Iraqi Freedom. We also met with the contracting officers for 

both the Balkans Support Contract and the LOGCAP contract to obtain 

their perspective on planning. To gain a comprehensive understanding of 

AFCAP and CONCAP planning, we met with the program managers for 

both the AFCAP and CONCAP contracts as well as the procuring 

contracting officers for both contracts. We also talked to customers of the 

four contracts to gain a better understanding of the customer’s role in 

planning and the customer’s views of the planning process. Finally, we 

spoke with representatives of Kellogg, Brown, and Root—the CONCAP, 

LOGCAP, and BSC contractor—and Readiness Management Support, the 

AFCAP contractor, to obtain their views on the planning process. 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 54 GAO-04-854 Military Operations 

To determine the adequacy of the contract oversight process, we 

undertook a number of actions. We reviewed a wide array of documents, 

including 

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

instructions that relate to the use of contractors to support deployed 

forces; 

• documents specific to the AFCAP, CONCAP, LOGCAP, and Balkans 

Support Contracts; 

• audit reports prepared by DOD agencies on these contracts, including the 

Defense Contract Audit Agency, the Air Force Audit Agency, the Army 

Audit Agency, and the Army Materiel Command Inspector General, and we 

met with representatives of these organizations as well to discuss their 

findings; and 

• the Defense Contract Management Agency’s (DCMA) situation reports for 

September 2003 through May 2004 for Iraq, Kuwait, Afghanistan, and 

Djibouti to get a better understanding of the types of oversight actions that 

administrative contracting officers and quality assurance representatives 

were taking. 

During our visits to Kuwait and Qatar, we met with DCMA representatives 

to discuss oversight issues and observe some of their oversight practices 

and procedures. In Germany we met with the DCMA administrative 

contracting officers assigned to monitor BSC. To gain further insight into 

LOGCAP oversight in Iraq, we interviewed one of the senior DCMA 

administrative contracting officers responsible for overseeing the 

LOGCAP contract in Iraq after he redeployed. We also met the DCMA 

representatives located at the headquarters of the Halliburton Company 

(the parent company of Kellogg, Brown and Root) to gain a better 

understanding of the role of the corporate administrative contracting 

officer. We met with officials at all levels of command to gain an 

understanding of what they believed their roles were in the oversight 

process, and we met with contractor representatives to discuss contract 

oversight and contract management from their perspective. We also did 

the following: 

• To understand the definitization process, we reviewed relevant portions of 

the Defense Federal Acquisition Regulation Supplement, interviewed 

those government-contracting officials responsible for the definitization 

process, and reviewed negotiation memoranda documenting the results of 

definitization negotiations. We also discussed the definitization process 

with representatives of the contractors. To understand the award fee 

process and the requirements for an effective award fee board, we 

reviewed the Army Audit Agency’s Report on Award Fee best practices 
Appendix I: Scope and Methodology 

Page 55 GAO-04-854 Military Operations 

and reviewed the award fee plans for the CONCAP, AFCAP, and Balkans 

Support Contract and a draft of the award fee plan for the LOGCAP 

contract. We reviewed documentation prepared for award fee boards to 

understand the types of contractor performance evaluations that 

customers and oversight officials provided. We also attended award fee 

boards for CONCAP, AFCAP, and BSC. At the time we completed our 

review, the LOGCAP contracting office had not yet held an award fee 

board. 

• To determine if lessons learned were being collected, we reviewed the 

Center for Army Lessons Learned database and the U.S. Army, Europe, 

Lessons Learned database to determine if they contained any lessons 

learned related to the use of BSC or the LOGCAP contract. In addition, we 

reviewed the Coalition Forces Land Component Command’s lessons 

learned database for any relevant LOGCAP lessons learned. We met with 

contract customers to determine how they documented lessons they might 

have learned and to ascertain if lessons learned were shared between 

contract users. We also met with officials from DCMA and the contractors 

to discuss their lessons learned programs. 

To determine if the logistics support contracts were being used in an 

economic, efficient, and cost-conscious manner, we reviewed previous 

audits by DOD organizations and command-level audit agencies, such as 

the U.S. Army, Europe’s, Office of Internal Review and Audit Compliance. 

We met with representatives of the Army Central Command to determine 

if they had issued any guidance to the LOGCAP customers on the need to 

be cost conscious, and we obtained and reviewed guidance issued by 

CJTF-7 and CJTF-180 to determine if they had (1) established the need to 

be cost conscious as a priority and (2) established procedures for 

reviewing and approving requirements and reevaluating recurring services. 

We also met with representatives of Marine Forces Central Command and 

U.S. Army, Europe, to get a better understanding of their review processes 

for LOGCAP and BSC, respectively. In addition, we met with Navy officials 

to determine how they control costs and ensure that the contractor 

provides service in an economical and efficient manner and with CONCAP 

customers at Guantanamo Bay to determine their involvement with cost 

control. Similarly, we met with Program Management and Contracting 

Office officials for the AFCAP contract to determine what steps they take 

to ensure that the contract is used in an economic and efficient manner 

and met with AFCAP customers at Al Udeid Air Base, Qatar, and discussed 

cost control. We also reviewed DCMA situation reports to determine if 

DCMA officials at deployed locations had any insight into improving cost 

control and economy and efficiency. 
Appendix I: Scope and Methodology 

Page 56 GAO-04-854 Military Operations 

To assess the extent to which DOD had a sufficient number of qualified 

personnel with the training and skills necessary to provide effective 

contract oversight and management in place, we determined the numbers 

of DCMA, Defense Contract Audit Agency, and Army Materiel Command 

personnel that were deployed in support of AFCAP, LOGCAP, and BSC. 

Since we could find no guidelines on the appropriate number of oversight 

personnel, we spoke with DCMA officials who oversaw the LOGCAP and 

AFCAP contracts to determine if they believed that the number of DCMA 

personnel deployed was adequate. We also reviewed DCMA situation 

reports to determine if DCMA staffing affected contract oversight. We 

interviewed Navy and Air Force officials responsible for overseeing the 

CONCAP and AFCAP contracts to determine if sufficient oversight 

personnel were available. To determine if the personnel with contract 

responsibilities, including customers, had sufficient training to 

satisfactorily fulfill their responsibilities, we met with personnel at all 

levels to discuss the training they had received regarding the use of 

logistics support contracts and their understanding of their specific roles 

and responsibilities. We also asked them to assess the adequacy of the 

training they received. We met with members of the program management 

offices to determine if they believed that personnel such as quality 

assurance representatives, contracting officers’ representatives, and 

contracting officers’ technical representatives had been adequately 

trained. 

We visited the following locations during our review: 

Office of the Secretary of Defense: 

• Inspector General Office, Arlington, Va. 

Defense agencies 

• Defense Contract Management Agency, Alexandria, Va. 

• Defense Contract Management Agency Middle East, Kuwait. 

• Defense Contract Management Agency Middle East, Qatar. 

• Defense Contract Audit Agency, Houston, Tex. 

• Defense Contract Audit Agency, Atlanta, Ga. 

• Defense Contract Audit Agency, Iraq Branch Office. 

• Defense Contract Audit Agency, European Branch Office. 
Appendix I: Scope and Methodology 

Page 57 GAO-04-854 Military Operations 

Department of the Army: 

• Office of the Deputy Chief of Staff-Logistics, The Pentagon. 

• United States Army, Europe, Heidelberg, Germany. 

• United States Army Forces Command, Fort McPherson, Ga. 

• United States Army Central Command (Rear), Fort McPherson, Ga. 

• United States Army Central Command (Forward), Kuwait. 

• Camp Udairi, Kuwait. 

• Camp Arifjan, Kuwait. 

• Camp Doha, Kuwait. 

• Other LOGCAP sites in Kuwait. 

• U.S. Army Corps of Engineers—Trans Atlantic Program Center, 

Winchester, Va. 

• U.S. Army Materiel Command, Ft. Belvoir, Va. 

• Army Field Support Command, LOGCAP Program Manager, 

Alexandria, Va. 

• Army Field Support Command, LOGCAP Procurement Contracting 

Office, Rock Island, Ill. 

• Army Materiel Command, Europe. 

• Army Materiel Command, Kuwait. 

• U.S. Army Audit Agency, Alexandria, Va. 

• Army Audit Agency, Mainz Kastel, Germany. 

• United States Army Criminal Investigation Command, Fort Belvoir, 

Virginia 

Department of the Air Force: 

• U.S. Air Force Civil Engineer Support Agency, Tyndall Air Force Base, Fla. 

• U.S. Air Force 325th Contracting Squadron, Tyndall Air Force Base, Fla. 

• U.S. Central Command Air Forces, Shaw Air Force Base, S.C. 

• Al Udeid Air Base, Qatar. 

• U.S. Pacific Air Forces, Hickam Air Force Base, Hawaii. 

Department of the Navy: 

• Marine Forces, Central Command, Camp Smith, Hawaii 

• Naval Facilities Engineering Command, Atlantic Division, Norfolk, Va. 

• Naval Facilities Engineering Command, Pacific Division, Pearl Harbor, 

Hawaii. 

Regional Combatant Commanders: 

• U.S. Southern Command, Miami, Fla. 

• Joint Task Force, Guantanamo Bay, Cuba. 
Appendix I: Scope and Methodology 

Page 58 GAO-04-854 Military Operations 

Logistics Support Contractors: 

• Kellogg Brown and Root Services, Houston, Tex. 

• Kellogg Brown and Root Services, Arlington, Va. 

• Readiness Management Support, LC, Panama City, Fla. 

We also obtained written responses from the U.S. Central Command in 

response to written questions we provided them on their role in managing 

logistics support contracts. 

Since we had done extensive work in the Balkans over the past several 

years, we drew upon past work where appropriate and visited Germany to 

talk to Army personnel administering the contract. In addition, although 

we did not travel to Iraq, we spoke with a senior DCMA Administrative 

Contracting Officer who was recently based in Iraq and obtained situation 

reports, which document observations regarding contractor performance. 

We also met with representatives of the 101st Airborne Division, who had 

been customers of LOGCAP services in Iraq, upon their return to the 

United States, and talked to contractor officials working in Iraq. We relied 

on data provided us by DOD and the contractor, which we verified where 

possible. For example, in assessing billing for dining facilities, we verified 

the contractor’s summary data by tracing the summary numbers to the raw 

data. The data were sufficiently reliable for the purpose of this report. We 

performed our work from August 2003 through June 2004 in accordance 

with generally accepted government auditing standards. 
Appendix II: Comments from the Department 

of Defense 

Page 59 GAO-04-854 Military Operations 

Appendix II: Comments from the Department 

of Defense 
Appendix II: Comments from the Department 

of Defense 

Page 60 GAO-04-854 Military Operations 

Note: Page numbers in 

the draft report may differ 

from those in this report. 
Appendix II: Comments from the Department 

of Defense 

Page 61 GAO-04-854 Military Operations 
Appendix II: Comments from the Department 

of Defense 

Page 62 GAO-04-854 Military Operations 
Appendix III: Comments from Readiness 

Management Support L.C. 

Page 63 GAO-04-854 Military Operations 

Appendix III: Comments from Readiness 

Management Support L.C. 

Note: GAO’s comments 

appear at the end of this 

appendix. 
Appendix III: Comments from Readiness 

Management Support L.C. 

Page 64 GAO-04-854 Military Operations 

See comment 3. 

See comment 2. 

See comment 1. 
Appendix III: Comments from Readiness 

Management Support L.C. 

Page 65 GAO-04-854 Military Operations 

See comment 4. 

Note: Page numbers in 

the draft report may differ 

from those in this report. 
Appendix III: Comments from Readiness 

Management Support L.C. 

Page 66 GAO-04-854 Military Operations 

The following are GAO’s comments on the Readiness Management 

Support’s letter dated July 4, 2004. 

1. Readiness Management Support expressed concern that the draft 

report characterized the use of logistics support contracts as the most 

expensive solution for the government. The company stated that, in 

the case of its power production contracts, the Air Combat Command 

determined it to be less expensive than using military in the 

command’s current method while acknowledging that there are 

occasions when the contractor does cost more than military execution, 

but that, in many of those cases, the contractor is the only solution. We 

state in the report that both Air Force and Navy officials believe that 

using the AFCAP and CONCAP contracts to fulfill a requirement is 

often the most expensive option available and consequently they have 

taken steps to control costs. We recognize that this may not always be 

the case. However, we are not aware of any comprehensive analysis 

comparing the cost of using logistics support contracts to provide 

logistics support with the cost of using military personnel to provide 

that support. Regarding AFCAP, we were told by Air Force contract 

customers that the use of the AFCAP contract was a “level of 

magnitude” more expensive than other alternatives because of the 

premiums associated with the manpower the contractor can access 

and the speed in which the contractor can provide services. 

2. Readiness Management Support stated that it did not control certain 

property acquired under the AFCAP contract but noted that in each 

instance the property was properly purchased, documented, and 

turned over to the Air Force. In reviewing the government’s role in 

property administration under the contract, we stated that DCMA did 

not ensure that the contractor maintained appropriate controls of 

government property. For task orders performed in southwest and 

central Asia, the AFCAP contract administrator delegated the property 

administration responsibility to DCMA. From our observations and 

conversations with DCMA contract administrators in southwest Asia in 

late 2003, we found that DCMA did not have a system in place to 

document what was purchased under the contract and what was 

turned over to the Air Force, although it was delegated this 

responsibility. As a result, at the time of our audit work, neither DCMA 

nor the Air Force could account for approximately $2 million worth of 

tools and equipment purchased under the AFCAP contract. 

3. Readiness Management Support described our report as stating that 

using civil augmentation contracts are not an effective method to 

GAO Comments 
Appendix III: Comments from Readiness 

Management Support L.C. 

Page 67 GAO-04-854 Military Operations 

procure equipment and materials and stated that it believed our 

research to be incomplete. Our report discusses how circumstances 

did not always allow the Army and the Air Force to select a more 

economical and efficient method to obtain services. In the case of 

AFCAP, we discussed how Air Force engineering squadrons used the 

AFCAP contract to buy commodities because they did not deploy with 

enough contracting and finance personnel to buy materials quickly or 

in large quantities and that the U.S. Agency for International 

Development also used the contract to provide disaster relief and 

humanitarian assistance supplies. We reported that the AFCAP 

contractor received more than $2 million in award fees since February 

2002 for these commodity supply task orders. To calculate this 

amount, we reviewed data on the amount of award fees that the 

contractor received for commodity supply task orders from February 

2002 through February 2004. To ensure that we captured only those 

task orders in which the contractor purchased commodities, we 

provided the AFCAP contract administrator with our analysis of the 

task orders to , and he concurred with our analysis. We stated in the 

report that Air Force program managers recognized that the use of a 

cost plus award fee contract to buy commodities may not be costeffective and are considering alternative types of contract options for 

these task orders for the next AFCAP contract. 

4. We revised the report to reflect this comment. 
Appendix IV: GAO Contact and Staff 

Acknowledgments 

Page 68 GAO-04-854 Military Operations 

Steve Sternlieb (202) 512-4534 

In addition to the person named above, Carole Coffey, Laura Czohara, 

George Duncan, Glenn Furbish, Oscar Mardis, Kenneth Patton, Matthew 

Ullengren, Gary Delaney, and Cheryl Weissman made key contributions to 

this report. 

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Acknowledgments 

(350427) 
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