United States General Accounting Office

GAO Report to Congressional Requesters

February 1997 CONTINGENCY

OPERATIONS

Opportunities to

Improve the Logistics

Civil Augmentation

Program

GAO/NSIAD-97-63

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-272659 

February 11, 1997

The Honorable Strom Thurmond

Chairman, Committee on Armed Services

United States Senate

The Honorable Ted Stevens

Chairman, Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Floyd Spence

Chairman, Committee on National Security

House of Representatives

The Honorable C.W. Bill Young

Chairman

The Honorable John Murtha

Ranking Minority Member

Subcommittee on National Security

Committee on Appropriations

House of Representatives

In response to your requests, we reviewed the Army’s Logistics Civil

Augmentation Program (LOGCAP). Under this program, a civilian contractor

provides logistics and engineering services to deployed forces. You had

expressed concern about the increasing use of this program and reports of

its escalating costs for the peacekeeping mission in Bosnia. As agreed with

your offices, this report addresses (1) the extent to which the Army is

using the program; (2) reasons for increases in the program’s cost for the

Bosnia peacekeeping mission; and (3) opportunities to improve program

implementation from a doctrine, cost control, and contract oversight

standpoint. As requested, it also addresses the potential for inefficiency by

having similar support contract programs in the Navy and the Air Force.

This report focuses on LOGCAP use during the peacekeeping mission in

Bosnia but also includes information on LOGCAP use in Somalia, Rwanda,

and Haiti. Details on our scope and methodology are included in 

appendix I.

Background The U.S. Army has traditionally employed civilian contractors in

noncombat roles to augment military forces. For example, civilian

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contractors were used extensively in the Korean and Vietnam Wars to

augment logistical support provided to U.S. forces. LOGCAP was established

by the Army in 1985 as a means to (1) preplan for the use of contractor

support in contingencies or crises and (2) take advantage of existing

civilian resources in the United States and overseas to augment active and

reserve forces. Initially, the program concept was that each Army

component of a unified command would individually plan and contract for

its own logistics and engineering services. In 1992, the concept was

changed to provide a single, centrally managed worldwide planning and

services contract. Although it originated as an Army program, LOGCAP is

available to the other services.

Program Management and

Contract Requirements

Since 1992, the U.S. Army Corps of Engineers has been responsible for the

program’s management and contract administration. When LOGCAP is used

in support of a mission, the operational commander becomes responsible

for defining services to be provided by the contractor, integrating

contractor personnel into the mission, and ensuring that funding is

provided. The contractor is paid from the operational command’s

operations and maintenance appropriation account. On October 1, 1996,

LOGCAP management transferred to the U.S. Army Materiel Command

(AMC). However, the Corps of Engineers will remain responsible for LOGCAP

management in Bosnia for the duration of that mission.

The original LOGCAP contractor, Brown and Root Services Corporation of

Houston, Texas, was competitively awarded a cost-plus-award-fee1

contract for 1 year with 4 option years on August 3, 1992. According to

Army documents, a notice regarding the contract in the Commerce

Business Daily elicited 37 requests for copies of the solicitation. Four

companies competed for the contract.

The 1992 LOGCAP contract required the contractor to (1) develop a

worldwide management plan and 13 regional plans, (2) participate in

planning and exercises, and (3) be prepared to execute the plans upon

notification. The worldwide management plan is a general description of

the equipment, personnel, and supporting services required to support a

force of up to 20,000 troops in 5 base camps for up to 180 days and up to

50,000 troops beyond 180 days. The regional plans use the worldwide

management plan as a baseline to provide detailed logistics and

1

A cost-plus-award-fee contract allows the contractor to be reimbursed for all reasonable, allowable,

and allocable costs incurred. Under the original contract, the contractor earns a base fee of 1 percent

of the estimated contract cost. The contractor also earns an incentive fee of up to 9 percent of the cost

estimate based on the contractor’s performance in a number of areas, including cost control.

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engineering support plans for a geographic region based on a specific

planning scenario prescribed by the requiring commander.

Use in Bosnian

Peacekeeping Mission

The Army decided to use the LOGCAP contract in December 1995 to

augment its forces that are part of the Bosnian peacekeeping mission. The

United States provides a major portion of the mission’s implementing

force as set forth in the Dayton Peace Accords and occupies key

leadership positions responsible for the mission. The U.S. Army, Europe

provides most of the U.S. force and is the major command responsible for

the mission’s logistics planning and funding. U.S. forces deployed in

support of the implementation force were located in 4 countries and

numbered approximately 22,200: about 16,200 in Bosnia, about 1,400 in

Croatia, and about 4,600 in Hungary and Italy.2

 Several factors created

unique challenges for the Army as it implemented LOGCAP during the

Bosnian mission. These factors related to the uncertainty of the U.S. role,

the need for rapid deployment once the role was defined, and the harsh

weather environment. (See app. II for more detail on these matters.)

U.S. Army, Europe is using LOGCAP to provide a range of logistics and

engineering services, including troop housing and facilities, food service,

and laundry operations, as well as base camp and equipment maintenance,

shuttle bus services within camps, and cargo handling services throughout

the area of operations. The Army’s December 1995 estimate of the cost to

provide these services for 1 year, which was developed by the contractor

based on the Army’s tasking, was $350.2 million.3

 However, when the

Department of Defense submitted its estimate of incremental costs for the

Bosnia peacekeeping mission to Congress on February 23, 1996, it reduced

the estimate to $191.6 million. The estimate was reduced because officials

in the Office of the Secretary of Defense believed there was duplication

between the services the contractor would provide and the services

military personnel would provide. However, Defense Department officials

had no documentation supporting the $191.6 million estimate. Thus, we

used the Army’s estimate of $350.2 million as the basis for analyzing

LOGCAP cost increases in Bosnia.

2

Approximate number of troops deployed as of July 19, 1996.

3

According to the contractor, this dollar amount was a rough order of magnitude made without benefit

of detailed scope data. The Army used this dollar amount as its initial estimate and we have referred to

it as such throughout this report.

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Results in Brief Over the last 4 years, the Army has relied on LOGCAP to help support

various contingency operations and plans to maintain the capability as an

option for providing support in the future. Since 1992, the Army has used

LOGCAP to provide logistics and engineering support services to U.S. forces

in six operations and on January 30, 1997, awarded a new contract that

will keep the program available until 2002. As of December 7, 1996,

estimated program costs were about $674.2 million, with the vast majority,

about $461.5 million, going to the Bosnian mission. According to the Army,

use of the contractor is the choice of last resort but necessary in these

missions because of troop ceilings, unavailability of host nation support,

and the need to keep military units available to respond to a major

regional conflict.

LOGCAP cost estimates for the Bosnian mission have increased

substantially. The Army’s latest revised estimate of $461.5 million4

 exceeds

its original estimate of $350.2 million by $111.3 million, or 32 percent. Our

review shows that the difference in the estimates was largely driven by

changes in operational requirements once the forces arrived in the Balkan

peninsula. Specifically, the Commander in Chief of U.S. Army, Europe

decided to substantially increase the number of base camps from 14 large

camps to 34 smaller camps5

 and to accelerate the schedule for upgrading

troop housing. These changes were required because of a number of

factors, including the U.S. geographic area of responsibility, limited

infrastructure, and harsh weather conditions. Associated management and

administrative cost increases and an unanticipated value added tax

imposed on the contractor by the Hungarian government also added to the

difference. Weaknesses in financial reporting and contract monitoring

systems also contributed to cost increases.

Our analysis of LOGCAP implementation during the Bosnian peacekeeping

mission shows that there are opportunities to make the program more

efficient and effective. For example:

• Little doctrine on how to manage contractor resources and effectively

integrate them with force structure units exists. In the Bosnian mission,

U.S. Army, Europe officials had limited or no experience with LOGCAP and

lacked guidance on how to prepare planning documents and what type of

4

This estimate is as of December 7, 1996, and covers the period from December 14, 1995, to 

December 13, 1996. In December 1996, the President extended the mission an additional 6 months.

Overall LOGCAP costs will increase based on the level of service required from the contractor.

5

The number of camps and operating sites fluctuated throughout the mission. This is the number of

camps and operating sites initially constructed by the contractor and military units.

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management and oversight structure to establish. As a result, the officials

had to develop ad hoc procedures and systems to ensure they were

effectively managing LOGCAP.

• The financial reporting and contract monitoring systems during the early

phases of the Bosnian mission were not sufficient to provide U.S. Army,

Europe officials with information they needed to track the cost of the

operation, report on how LOGCAP funds were spent, or monitor contractor

performance. Without these systems, commanders could not determine

whether the contractor was adequately controlling costs, if alternative

support approaches were cost-effective, if changes in the level of service

being provided were warranted, or whether work was performed in

accordance with contract provisions.

AMC officials have worked with U.S. Army, Europe to identify problems

experienced in Bosnia, and they are taking actions intended to improve

program planning and management and reduce costs for future

operations. These actions include developing doctrine and guidance,

improving financial management and contract monitoring systems, and

providing assistance to commanders when LOGCAP is implemented.

The Air Force and the Navy recently initiated programs similar to LOGCAP,

which may result in unnecessary overhead costs and duplication. Although

both the Air Force and the Navy have used LOGCAP for support services

during previous peacekeeping missions, officials of these services believe

contractor responsiveness and control can be enhanced by separate

programs. The Navy awarded a contract for its program in August 1995

and to date has paid the contractor approximately $32 million, primarily

for emergency assistance to repair hurricane damage at Camp Lejeune,

North Carolina. The Air Force expects to award its contract in

February 1997 and the contractor could earn about $4.4 million for

planning and preparation over the 5-year life of the contract. Many of the

services provided under all three programs are similar, and it may be more

efficient and effective to have one service act as the single manager.

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The Army Is Making

Increasing Use of

LOGCAP to Meet

Support Requirements

As shown in table 1, since 1992, the Army has used a contractor instead of

force structure to meet some of its combat support and combat service

support6

 needs in six major peacekeeping and humanitarian assistance

missions. Although using LOGCAP is the choice of last resort, Army officials

stated it is often necessary to use LOGCAP in these missions because of

planning considerations such as the ability to respond to a major regional

conflict, the political sensitivity of activating guard and reserve forces, the

lack of host nation support agreements in undeveloped countries, and the

desire to maintain a relatively low U.S. presence. The use of the contract

by far has been the most extensive for the Bosnian mission and that

mission provides a good illustration of how the factors come into play in

deciding whether to use the contract.

6

The Army divides support units into combat support and combat service support units. Combat

support units operate directly with combat maneuver units in wartime, for example, field artillery,

combat engineer, and signal units. Combat service support units provide services to combat and other

units, for example, transportation and maintenance services.

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Table 1: Major Operations in Which the Army Has Used Its LOGCAP Contract

Dollars in millions

Event Starting date Estimated cost Services provided

Somalia

“Operation

Restore Hope”

Dec. 1992 $62.0 Base camp construction and maintenance; food service and supply; laundry;

field showers; latrines; water production, storage, and distribution;

sewage/solid waste removal; bulk fuel receipt, storage, and issue;

transportation for passengers and cargo; and linguist support.

Rwanda

“Operation

Support Hope”

Aug. 1994 6.3 Water production, storage, and distribution.

Haiti

“Operation

Uphold

Democracy”

Sept. 1994 133.0 Base camp construction and maintenance; food service and supply; laundry;

bulk fuel receipt, storage, and issue; airport and seaport operations; and

transportation services.

Saudi Arabia/

Kuwait

“Operation

Vigilant Warrior”

Oct. 1994 5.1 Food service and supply; transportation; convoy support; shuttle bus service;

laundry; and off loading and storing containers from ships.

Italy

“Operation Deny

Flight”

Sept. 1995 6.3 Base camp construction.

Bosnia

“Operation Joint

Endeavor”

Dec.1995 461.5 Base camp construction and maintenance; showers; latrines; food service and

supply; sewage/solid waste removal; water production, storage, and

distribution; shuttle bus service; bulk fuel receipt, storage, and issue; heavy

equipment transportation; mail delivery; construction material storage and

distribution; railhead operations; and seaport operations.

Total $674.2

Note: Estimated costs as of December 7, 1996.

Source: Department of the Army.

LOGCAP Is the Choice of

Last Resort

The Army has established a decision-making process for determining

when it will use LOGCAP. The following discussion describes the

decision-making process and illustrates how it worked in the Bosnian

mission.

Criteria for Using LOGCAP The Army’s LOGCAP regulation states that LOGCAP is one of several options

available to commanders for meeting combat support and combat service

support shortfalls in their operational plans. It is intended to be the option

of last resort, and it was primarily designed to be used in areas where host

nation support agreements do not exist. Other options to be considered by

commanders before selecting LOGCAP include the other military services,

allied support, and local contracting. In addition, commanders must

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consider other factors such as risk to personnel, lift availability, quality of

life, and mission duration.

Factors Considered in Deciding

to Use LOGCAP in Bosnia

The key planning and resource considerations that led to the Army’s

decision to use LOGCAP were (1) troop ceilings for active and reserve

forces, (2) engineering resources available in the Army force structure,

(3) host nation support agreements, and (4) quality of life issues.

According to U.S. Army, Europe officials responsible for planning the

Bosnian mission, they initially identified a need for a force of 38,000

troops, including 20,000 combat troops. This number of combat troops

was considered necessary because U.S. forces had to patrol a 1,200-mile

zone between the formerly warring factions. Also, the Joint Chiefs of Staff

told U.S. Army, Europe not to expect authorization for more than 25,000

troops: 20,000 in Bosnia and 5,000 in Croatia.

U.S. Army, Europe also had a ceiling on the reserve forces it could use.

For Bosnia, the President authorized the call-up of 4,300 reservists for all

the services,7

 3,888 of which the Defense Department allocated to the

Army. The Army used its allocation to activate key support capabilities

such as civil affairs and psychological operations units that existed

primarily in the reserve forces and could not be contracted. Once these

units were activated, most of the 3,888-reserve ceiling had been used,

leaving little opportunity to call up other types of support units. Many of

the Army’s combat support and combat service support units were in the

guard and reserve. An Army planner told us they could have asked the

national command authority to increase the force ceiling and reserve

call-up authority; however, because they had LOGCAP as an option, it was

not necessary to seek these increases to meet support needs.

The Army also used some units from the other services. According to U.S.

Army, Europe officials, the Army did not have enough engineering

resources available for deployment to build all the required base camps in

the time allotted and received assistance from Air Force and Navy

engineering units. By managing the flow of forces into the theater to

remain below the 25,000-force ceiling, they were able to use these units

and Army engineer units to construct 15 of the base camps. When the

initial construction was completed, these units left the area of operations

and the remainder of the Army’s force deployed.

7

Under 10 U.S.C. 12304, the President is authorized to call up to 200,000 selected reservists for up to

270 days without a national emergency. On December 8, 1995, the President signed Executive Order

12982 authorizing activation of reserve forces. The Secretary of Defense set the ceiling for the callup at

4,300 reservists.

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U.S. Army, Europe officials also told us that because the former Yugoslav

Republic was not a part of the North Atlantic Treaty Organization, U.S.

Army, Europe had no preexisting support agreements in the region.

Therefore, little consideration was given to obtaining host nation support

to meet the requirements in excess of force ceilings.

Army officials further stated that quality of life considerations and the fact

that the Army lacked the capability to provide some services also favored

the use of LOGCAP. For example, the Army’s Deputy Commander for

Support in Bosnia cited food and laundry services as areas where the

contractor is able to provide a higher standard of service than Army units

typically provide during deployments. LOGCAP also was able to provide

services, such as sewage and solid waste disposal and janitorial services,

that the Army routinely contracts for because the capability is not in the

force structure.

Changes in

Operational

Requirements Largely

Drove LOGCAP Cost

Increases in Bosnia

The estimated costs for LOGCAP implementation in Bosnia have increased

substantially. The Army’s latest revised estimate of $461.5 million exceeds

its initial estimate of $350.2 million by $111.3 million, or 32 percent.8

 Our

review shows that the difference in the Army’s estimates was largely

driven by changes in operational requirements once the forces arrived in

Bosnia. Specifically, the Commander in Chief of U.S. Army, Europe

decided to increase the number of base camps from 14 large camps to 34

smaller ones and to accelerate the schedule for upgrading troop housing.

Associated management and administrative costs and an unanticipated

value added tax imposed on the contractor by the Hungarian government

also contributed significantly to the difference.

Estimated Costs Have

Increased by 32 Percent

Table 2 presents a comparison by seven broad functional areas of the

estimated costs for LOGCAP in Bosnia as of December 1995 and

December 1996. A direct comparison of the two estimates was not

possible because of significant differences in (1) the scope of work

covered by the estimates and (2) the way costs are reported. For example,

in the December 1995 estimate, the contractor estimated the cost to

establish and operate an intermediate staging base. This estimate included

costs for building the camp; providing laundry, food, and bus service; and

operating a construction supply storage yard, a retail fuel section, and an

aviation fuel section. The estimate also included costs for mobilizing and

8

We used the Army’s initial estimate as the basis for our analysis because Office of the Secretary of

Defense officials did not have supporting documentation for the $191.6 million included in their

estimate of incremental costs submitted to Congress.

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demobilizing personnel, material, and equipment and recurring

maintenance costs. However, later estimates use 52 separate work

categories that do not directly link to the requirements in the original

estimate. Consequently, we reviewed available cost data and discussed the

differences with contractor and Army officials to determine the primary

reasons for the increases in estimated costs. We did not attempt to

determine whether the estimated costs were reasonable.

Table 2: Analysis of LOGCAP Cost

Increases in Bosnia Dollars in millions

Function

December

1995 estimate

December

1996 estimate Difference

Troop housing and facilities $56.5 $150.4 $93.9

Management and administration 85.4 154.2 68.8

Transportation 9.8 48.4 38.6

Maintenance 0.2 11.0 10.8

Laundry 10.1 6.6 (3.5)

Food service 64.1 22.8 (41.3)

Base camp maintenance 124.1 65.2 (58.9)

New work since 3/30/96a 0 2.9 2.9

Total $350.2 $461.5 $111.3

aNew work represents estimated costs for services that were outside the original contract

estimate but were required by U.S. Army, Europe.

Source: GAO analysis of U.S. Army, Europe data.

Troop Housing and

Facilities

This function covers costs for preparing lodging, offices, and dining

facilities for troops. The work consisted of repairing designated

government acquired facilities, as well as new tent or modular unit

construction. Basic facilities included billeting, shower/latrine, dining,

office, and recreation areas. Estimated costs for troop housing and

facilities rose from an original estimate of $56.5 million to $150.4 million.

Our analysis of available data, discussions with Army and contractor

officials, and observations of facilities indicated that costs increased

largely because the scope of work performed by the contractor increased.

The number of camps and facilities increased from the 14 large base

camps originally planned to 34 smaller camps. In the original plan, the

contractor was to build six base camps, one in Hungary and five in Bosnia,

and upgrade the eight remaining camps. However, given the change in

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operational requirements, the contractor built 19 of the 34 camps and

upgraded all 34 camps.

Our discussions with the Commander in Chief of U.S. Army, Europe and

his staff revealed that the commander decided to increase the number of

camps required because of several factors. Two factors were the size of

the U.S. area of responsibility (the United States had to patrol a 1,200-mile

zone of separation between the warring factions), and the condition of the

soil and limited infrastructure (a very wet and mine-filled terrain and

devastated power, water, and communication systems). Other factors

were the (1) need to balance force presence in each former warring

factor’s sector, (2) condition of the roads leading to potential base camp

sites (the construction of new and long roads to potential sites was

considered too expensive and raw materials were not available in

sufficient quantities at the time), and (3) challenge of relocating former

U.N. forces from fixed facilities and into their new areas of operation.

A U.S. Army, Europe planner told us that conditions on the ground were

not well known prior to deployment because U.S. personnel were not

allowed into Bosnia until shortly before the operation started. The harsh

weather conditions under which the construction took place and the

increased requirement for equipment to provide services at the additional

camps also increased cost. (See fig. 1 for U.S. base camps in the Balkan

peninsula.)

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Figure 1: Dispersion of U.S. Base Camps in Bosnia, Hungary, and Croatia

Hungary

Kaposvar

Zagreb

Croatia

Slovanski 


Brod

Bosnia-Herzegovina

Sarajevo

Serbia

Tuzla

21 23 19

22

18

20

6 7 8

9

1 4

2

5 3

16

15

13

10

12

17

14

11

24

Eagle 


Comanche 


Lukavac 


Steel Castle 


Guardian 


Molly 


Bedrock 


Angela


Rumbaugh


Kime


Colt


McGovern


Bases

1

2

3

4

5

6

7

8

9

10

11

12

Burke


Gentry


Tucker


Walker


Hampton


Demi


Pat


Alicia


Lisa


Linda


McGill


Slovanski Brod


Intermediate Support

13

14

15

16

17

18

19

20

21

22

23

24

25

25

Note: The number of camps fluctuated throughout the mission. This map shows the number of

camps as of June 9, 1996.

Source: Developed by GAO based on U.S. Army, Europe data.

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Estimated troop housing costs also increased because some services were

not considered in the original estimate. For example, the contractor’s

initial cost estimate assumed that some of the camp sites selected by the

Army would need only minimal site preparation. At one site alone,

however, approximately 200 railcars of crushed rock were needed to

prepare the ground before construction could begin. Many other sites also

required significant engineering preparation. (See fig. 2.) Additionally, the

initial estimate did not include all costs for the contractor to upgrade

camps built by military engineer units. The contractor upgraded 15 of

these camps.

Figure 2: Many Camps Required

Significant Engineering Preparation

The decision to accelerate the schedule for improving the camps also

increased estimated costs. The Army’s December 1995 cost estimate was

based on a plan in which both the contractor and the military engineer

units would initially erect tents and construct rudimentary support

facilities. The camps would then be upgraded by the contractor in two

follow-on efforts. (See fig. 3.) In the first effort, the contractor would add

wooden floors to the tents; provide lighting, heating, latrines, showers,

electric power, and water; and build kitchen and dining facilities. In the

second effort, the contractor would provide for level tent pads and tent

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frames with insulated walls and ceilings. However, a U.S. Army, Europe

official told us that because of the harsh weather conditions, which

included flooding and mud, the Commander in Chief decided to have the

contractor go straight to the end-state standard for all camps and to

increase the standard to modular housing units at several camps where

conditions were particularly harsh. Because the contractor was not given

additional time to meet the higher standards, significantly more equipment

and material had to be commercially air transported into the area of

operations. The contractor also had to hire additional workers and

purchase and transport modular units.

Figure 3: U.S. Military Base Camp in

Bosnia Upgraded to Modular Units

Management and

Administration

The management and administration function provides for centralized

project management, contract administration, project controls and

reporting, procurement and subcontracting, financial management,

personnel and payroll activities, property management, and life support

for contractor personnel engaged in mission support. It also includes the

contractor’s overhead costs, general and administrative costs, and award

fees. Costs for this function increased from $85.4 million to $154.2 million.

This cost function increases as estimated contract costs increase. For

example, a $100-million increase in the estimated cost of services adds

about $14.7 million to cover overhead, general and administration costs,

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and potential award fees. According to a U.S. Army, Europe official, the

increase in the amount of services required and greater involvement by the

contractor’s home office in procuring and shipping material and

equipment, also contributed to the increase.

This function also covers taxes, duties, and fees paid by the contractor.

The contractor prepared the original estimate with the expectation that it

would be included in any Status of Forces Agreements covering the

mission. It was not included in the agreement with Hungary, however, and

the U.S. government paid approximately $18 million in value added tax to

the Hungarian government that is included in this function.

Transportation Transportation covers costs for providing (1) transportation services

throughout the area of operations and (2) providing railhead and container

handling services in Hungary, Croatia, and Bosnia. It also includes

airfreight charges for equipment and material brought in from Europe and

the United States. Estimated costs for this function increased from

$9.8 million to $48.4 million. Our analysis and discussions with Army

officials indicated that these estimated costs increased because the Army

expanded the amount of contract service it wanted and airfreight charges

were much higher than anticipated. In the original estimate, the

contractor’s cost to provide container handling services was included, but

the estimate did not include costs for other transportation services. From

January through March 1996, however, contractor trucks logged over

55,000 miles and moved over 9,800 tons of material and equipment.

Estimated airfreight costs increased from $5 million to $25.1 million

because winter conditions made it difficult to transport supplies and

equipment by road, and accelerating the camp construction schedule

required the contractor to fly in more supplies and equipment.

Maintenance Maintenance covers the cost of providing mechanical service and

maintenance for dedicated government equipment such as generators,

refrigerators, and all contractor procured vehicles in the area of operation.

According to the Army’s schedule, these estimated costs increased from

$200 thousand to $11 million. Part of the increase is due to differences in

how equipment maintenance costs were reported in the two estimates. In

the original estimate, maintenance costs were included as part of the

estimate for an associated piece of equipment or vehicle. For example, the

estimate for a generator reflected both the acquisition and maintenance

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costs. In the later estimate, the estimated cost for maintenance of

equipment and vehicles was reported separately.

Laundry Laundry covers the cost associated with providing personal and medical

laundry service and clothing repair to soldiers and Defense Department

civilians on a daily basis. Estimated costs for this function decreased from

$10.1 million to $6.6 million. Contractor officials told us the original

estimate was based on a “worst case scenario” that did not develop.

Food Service Food service covers costs for providing meals to the troops and Defense

Department civilians. According to the original cost estimate, the

contractor was to supply, prepare, serve, and distribute food. Estimated

costs for this function decreased from an estimated $64.1 million to

$22.8 million. U.S. Army, Europe officials told us they believed that the

contractor’s estimate for food supply and distribution services was too

high and they contracted elsewhere for these services at a lower price.

Additionally, the contractor operated fewer dining facilities because more

Army cooks were used than originally planned, further reducing estimated

contract costs for this service.

Base Camp Maintenance Base camp maintenance covers costs for maintaining troop housing and

facilities, latrine/shower units, kitchen and dining facilities, and utility

systems at the 34 camps. It also includes road repair and maintenance,

water production, storage and distribution, fire protection, and hazardous

waste management. The original estimate included $30 million for

minefield clearing, as well as costs for the other services. Estimated costs

for this function decreased from $124.1 million to $65.2 million. Our

analysis and discussions with Army and contractor officials indicated that

costs for this function decreased largely because the Army did not use the

contractor for minefield clearing, saving $30 million. Also, part of the

decrease was due to differences in how equipment maintenance costs

were reported in the two estimates. A U.S. Army, Europe official attributes

the remaining decrease in estimated costs to their efforts to reduce

contractor services and to a lower requirement for some services, such as

snow removal.

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B-272659 

Opportunities to

Improve the

Program’s

Effectiveness

Our review of the Bosnian operation shows that there are opportunities to

improve the program’s effectiveness. Areas that need improvement

include doctrine and guidance, cost reporting, and contract monitoring.

LOGCAP Doctrine and

Guidance

At the start of the Bosnia mission, little written doctrine and guidance9

was available for planners on how to effectively use LOGCAP. The Army’s

Office of the Deputy Chief of Staff for Logistics had prepared a desk guide

to provide background and direction in the use of LOGCAP, but the guide

lacked detail, and several key U.S. Army, Europe planners were unaware

of its existence. As a result, U.S. Army, Europe officials had to develop ad

hoc procedures and systems to ensure they were effectively managing

LOGCAP.

The desk guide discusses the decision-making process for LOGCAP and

states the need to make the contractor part of the logistics support team

and include it in staff meetings and other activities related to a mission.

However, the guide provides little information on the type of management

structure to establish, financial control and oversight requirements, and

mission planning considerations. For example, even though a combat

support or combat service support function may be replaced by LOGCAP,

the Army still has a need for staff supervision of the function.

According to Army officials, doctrine and guidance on the use of LOGCAP

are critical because using a contractor to support a deploying force

represents a significant change from the experiences of most Army

personnel. Typically, Army practice has been to make the force

self-sustaining for the first 30 days in a contingency theater. In this

environment, troops live under field conditions. Housing might consist of

multiperson tents, toilets are primitive and shared, shower facilities are

often nonexistent, and food is often a prepackaged ration. One official

likened the employment of LOGCAP without doctrine and guidance to giving

the Army a new weapon system without instructions on how to use it.

Directly related to the doctrine and guidance problem was the lack of

LOGCAP training and experience among U.S. Army, Europe commanders

and staff. Some of the key logistics planners for the Bosnian operation had

9

Doctrine is the Army’s statement of how it intends to conduct war and military operations other than

war. It establishes a shared approach to operations and serves as a vehicle for organizational and

physical change. It is also the basis for the curriculum in the Army school system. Guidance, including

tactics, techniques, and procedures, flows from the doctrine.

Page 17 GAO/NSIAD-97-63 Contingency Operations
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little knowledge or experience with LOGCAP prior to the operation. Despite

significant efforts to effectively manage LOGCAP, U.S. Army, Europe

officials’ inexperience and lack of understanding of the contract, the

contractor’s capabilities, and program management created problems

during the deployment and resulted in unnecessary costs. Examples of

management problems during the mission follow:

• The contractor and the contract administrators were sometimes not

included as part of U.S. Army, Europe’s planning and management team,

even though they were responsible for critical parts of the mission. In the

early days of the mission, U.S. Army, Europe officials believed the

contractor was not responsive to their needs. Contractor officials and

contract administrators said that once the mission began, significant

operational changes were made and they had little input despite being

responsible for executing the changes.

• U.S. Army, Europe did not initially have a LOGCAP focal point to review

tasks, assess options for performing these tasks, establish priorities, and

resolve contractor problems. The lack of a focal point sometimes resulted

in conflicting directions and a feeling on the part of some U.S. Army,

Europe officials that the contractor was not being responsive.

• Commanders were sometimes unaware of the cost ramifications of their

decisions. For example, the decision to accelerate the camp construction

schedule required the contractor to fly plywood from the United States

into the area of operations because sufficient stores were not available in

Europe, which increased costs. For example, the contractor reported that

the cost of a 3/4-inch sheet of plywood, 4’ x 8’, purchased in the United

States was $14.06. Flying that sheet of plywood to the area of operations

from the United States increased the cost to $85.98 per sheet, and shipping

by boat increases the cost to $27.31 per sheet. According to a U.S. Army,

Europe official, his commander “was shocked” to find the contractor was

flying plywood from the United States.

• The contractor was not included in the Status of Forces Agreement with

the Hungarian government. The result was the contractor paid about

$18 million in value added tax to the Hungarian government, which was

subsequently billed to the U.S. government as a contract cost. The Army is

working to recoup these taxes from the Hungarian government.

Given the absence of detailed program guidance, U.S. Army, Europe

worked to resolve these problems and developed many ideas and ad hoc

systems that the Army plans to incorporate into program doctrine and

guidance that AMC is developing. For example, U.S. Army, Europe

established Joint Acquisition Boards to prioritize work and determine the

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best available resources for accomplishing the work. It also developed the

concept of appointing base camp “mayors” to serve as focal points for the

contractor and improved the cost data provided by the contractor. Our

discussions with members of the acquisition review boards and camp

mayors revealed that, once established, these systems were effective in

setting criteria and priorities for using LOGCAP services. However, as

discussed later in this report, the boards only reviewed about 5 percent of

estimated LOGCAP costs for Bosnia.

LOGCAP Cost Reporting The LOGCAP financial reporting systems were not sufficient to provide U.S.

Army, Europe commanders with adequate information on how much

money had been spent for LOGCAP and for what purpose. They were

generally aware that changing operational requirements had increased

LOGCAP costs beyond the contractor’s original estimate, but they were

surprised by the amount of the increase. As a result of inadequacies in the

government-required and approved LOGCAP financial reporting systems,

U.S. Army, Europe officials developed ad hoc systems to provide

stewardship over the funds.

The contractor’s estimate for each assigned task is intended to provide the

basis for monitoring and reporting LOGCAP costs. Weekly cost reports

submitted by the contractor identify what has been spent against the

estimate for each assigned task and provide a means of tracking costs and

assessing variances. However, given the change in operational

requirements, U.S. Army, Europe did not receive a cost estimate for its

revised operational requirements until May 1996, and the Corps of

Engineers and the contractor did not agree on estimated costs until

August 1996. Weekly cost status reports using the government-required

and approved system were submitted by the contractor from the onset of

the operation. However, a U.S. Army, Europe resource manager stated that

these reports were not particularly useful because (1) the data were

generally not current, (2) there was no baseline estimate with which to

compare the data, and (3) the reports did not explain variances from prior

reports.

As a result, through the early days of the mission, when the bulk of

contract support money was spent, U.S. Army, Europe commanders could

not determine the cost-effectiveness of alternative support approaches,

nor could they determine if changes in the level of service being provided

were warranted. They also had difficulty responding to Defense

Department and congressional inquires about cost. A similar problem was

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experienced in Somalia, where a senior official expressed his concern

about the command’s inability to verify expenditures and tie those

expenditures to specific tasks.

U.S. Army, Europe officials were concerned about the rising estimates for

LOGCAP and in late March 1996, they took several steps to reduce estimated

cost and limit future growth. One action was to dispatch a team to

Hungary, Croatia, and Bosnia to review all LOGCAP work orders to

determine if (1) the requirement was still valid and (2) contracting was the

most economical means of meeting the requirement or if the work could

be done more economically by alternate means such as military

manpower, alternate contractors, or adjusting the level of service. To limit

growth in the cost estimate, the U.S. Army, Europe Chief of Staff restricted

approval authority for new work estimated to cost over $5,000.

According to a U.S. Army, Europe resource manager, efforts to improve

financial reporting began in December 1995, and by the end of March the

data were sufficient to meet the command’s reporting and analysis needs.

The improved financial data reporting format developed by U.S. Army,

Europe, with assistance from the contractor, has been shared with AMC

personnel who indicate they will improve the financial reporting

requirements.

Contract Monitoring Reviews by several agencies criticized the Army’s administration and

monitoring of LOGCAP contract activities in Bosnia, noting, among other

things, that the Army did not negotiate the estimated costs in a timely

manner and implement a systematic method to ensure that performed

work was in accordance with contract provisions. As a result, they were

unable to ensure that the contractor adequately controlled costs and

furnished the appropriate level of support. Similar criticisms were raised

regarding LOGCAP implementation in Somalia and Haiti.

The Army Corps of Engineers was responsible for LOGCAP contract

administration in Bosnia. One responsibility was to develop the policies

and procedures to guide the execution of LOGCAP contract activities,

including property administration, contractor compliance with contractual

quality assurance and safety requirements, and reviews and analyses of

contractor cost proposals. Specifically, the Corps turned LOGCAP work on

and off, performed quality control studies on the contractor’s services, and

provided liaison support to Army field commanders. During the

construction phase in Bosnia, these tasks were performed by a team from

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the Corps’ Transatlantic Program Center in Winchester, Virginia. During

the sustainment phase, which was from about March 1996 to

November 1996, the Corps delegated contract administration to the

Defense Contract Management District, International, who deployed a

team of 30 personnel, along with a 2-person team from the Defense

Contract Audit Agency, to monitor contractor performance.

According to the Army Audit Agency,10 timely actions were not initiated to

negotiate the estimated project costs with the contractor and modify the

logistical support contract. As a result, contract provisions that give the

contractor major incentives to contain project costs were not effective.

Moreover, delays in negotiating estimated costs greatly hindered the

Army’s ability to evaluate the amount of award fee that the contractor had

earned based on quality of performance. The Army Audit Agency

explained that the Federal Acquisition Regulation prohibits contract

provisions whereby a contractor’s profits are based on the percentage of

costs incurred (or costs plus a percentage of costs). For this reason, the

regulation requires the contracting officer to negotiate the estimated costs

of services being furnished by the contractor. The audit agency also noted

that negotiating contract costs in a timely manner is important because

(1) once the estimated costs are negotiated with the contractor, the award

fee pool is limited to costs that do not exceed those that were negotiated

and (2) until the estimate is formalized, the contractor has no real

incentive to control costs because increased project costs potentially

mean a higher award fee.

According to the contractor, under the terms of the contract cost control

constitutes 35 percent of the award fee and that factor alone is a clear

incentive. The contractor also noted that the lack of a definitized estimate

precludes the submission of invoices for base or award fee to the

government. In the case of Bosnia, Brown and Root Services Corporation

reported that it received no fee during the first 10 months of operation.

The revised statement of work for the Bosnian mission was not approved

until March 7, 1996, and the contractor provided a revised estimate on

May 24, 1996. By that point, the estimated cost to complete work

requested by U.S. Army, Europe stood at $477.4 million. Of this amount,

about $325.7 million, or 68 percent, had already been spent. The Corps of

Engineers and the contractor reached agreement on an estimated cost for

Bosnia on August 12, 1996.

10Logistics Civil Augmentation Program Contract, Operation Joint Endeavor; Audit Report AA 96-767,

Sept. 19, 1996.

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The Army Audit Agency also found that the Corps and the Defense

Contract Management District, International did not implement a

systematic method of inspections to monitor contract performance. As a

result, they could not ensure that the contractor performed work in

accordance with contract provisions, used the minimum number of

resources to meet the Army’s requirements, and furnished the appropriate

level of support. The Army Contracting Support Agency similarly

concluded that not enough people were deployed in the early stages of the

operation to monitor contractor performance for the same reasons.

Contract oversight was similarly criticized in Somalia and Haiti. For

example, a December 1994 Army Audit Agency report on LOGCAP

operations in Haiti criticized quality control.

Army Actions to Address

Management Problems

On October 1, 1996, the Army transferred LOGCAP management

responsibilities from the Corps to AMC. AMC officials have worked with U.S.

Army, Europe to identify problems experienced in Bosnia and they intend

to make several program changes to improve planning and management

and reduce costs. Specifically, they are taking or plan actions, including

changing the planning scenarios, developing doctrine and guidance on

LOGCAP and senior level training and education, and providing assistance to

operating commands when LOGCAP is implemented.

AMC awarded a new LOGCAP contract on January 30, 1997. The contract is

for 1 year with the option of extending it for 4 more years, making the

program available until 2002. One major change is that the contract pricing

arrangement for the planning portion of the contract has been changed

from cost-plus-award-fee to a firm-fixed price. According to the AMC

program officer, this change was made because planning costs are easier

to estimate than execution costs.

AMC officials also said that, to improve planning, the new contractor will be

required to prepare worldwide and regional plans under two specific

hypothetical scenarios: (1) an underdeveloped country with little or no

infrastructure and a weak or nonexistent government and (2) a developed

country with infrastructure and a viable and diplomatically recognized

government. AMC expects that tailoring these plans will enhance execution

and improve cost controls during an actual event by better defining LOGCAP

requirements.

AMC has also undertaken several initiatives to address other LOGCAP

problems experienced in Bosnia. To improve LOGCAP doctrine and training,

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AMC directed the U.S. Army Combined Arms Support Command to review

and revise Army regulations and field manuals so they properly reflect the

program’s goals. The command is revising about 20 Army regulations and

field manuals, and it expects to complete this task early in fiscal year 1998.

One revised field manual, which was released in September 1996, contains

an entire appendix that discusses only LOGCAP. In addition, AMC has asked

the Combined Arms Support Command, the Army Command and General

Staff College, the Sergeants Major Academy, and the Warrant Officer

Career Center to create LOGCAP training courses. The Army hopes to begin

providing this training to its senior level staff by the end of fiscal year

1997.

To address the LOGCAP implementation problems experienced in Bosnia,

AMC established logistics support teams to act as the single focal point with

operational commands for LOGCAP planning and execution. The teams are

to be located in the United States, Korea, and Germany and are to provide

command staff advice on LOGCAP and its capabilities and help develop

LOGCAP augmentation requirements when an operation is being planned.

AMC expects that improving the planning process in this way will enhance

cost controls by establishing more precise needs determinations, which

will result in better planning and cost estimating to support these needs. In

addition, AMC plans to establish and deploy a fully trained group of experts

during the initial phases of an operation to provide technical and

contractual support to commanders. The size and makeup of this team are

flexible, however, and can include LOGCAP technical advisors; personnel,

real estate, and communication/automation specialists; contracting and

legal officers; pay agents; and planning and operations personnel.

Multiple Support

Programs May Be

Inefficient

The Navy and the Air Force recently created programs to preplan for

contractor support, similar in many respects to the Army’s program.

According to Navy and Air Force officials, LOGCAP can meet each service’s

requirements, but they see contractor responsiveness and control as

benefits of separate programs. However, the programs may result in

unnecessary duplication and costs.

Types of Services Are

Similar

Although the size and primary purpose of the three programs differ

somewhat, the contracts will require similar engineering, logistics, and

planning services. For example, under all three programs, the contractors

will be required to provide construction services and supplies and, in the

Army and the Air Force programs, contractors are asked to identify

Page 23 GAO/NSIAD-97-63 Contingency Operations
B-272659 

potential civilian resources that can be relied on in contingencies. Before

creating these programs, the Navy and the Air Force relied on LOGCAP for

support during operations other than war such as in Somalia and Aviano,

Italy.

Navy Program The Navy’s program is known as the Navy Emergency Construction

Capabilities Program and is designed to support contingencies such as

regional conflicts, humanitarian aid, and natural disasters. The Navy

program consists of two geographic contracts—one covering the Atlantic

and one covering the Pacific—that are identical in scope. Atlantic and

Pacific contracts are managed by the Naval Facilities Engineering

Commands in Norfolk, Virginia, and Pearl Harbor, Hawaii, respectively.

The contracts were awarded in August 1995, for 1 year with 4 option years

and provides for an annual fee of $100,000. The Atlantic contract has been

used several times for services such as providing natural disaster

assistance at Camp Lejeune, North Carolina, following a hurricane and

preparing engineering studies to rebuild Haiti’s infrastructure. We were

told that the total cost of initiatives taken under the Atlantic contract as of

November 1996 was about $32 million. The Pacific contract has not been

used.

Air Force Program The Air Force’s program is known as the Air Force Contract Augmentation

Program. The Air Force solicitation process began on September 13, 1996,

and contract award is expected during February 1997. The contract will

also be awarded for 1 year with 4 option years. The basic contract calls for

a worldwide management plan, a program management team, and

contractor participation in two validation exercises a year. According to

program officials, their program differs from LOGCAP because Air Force

engineering and support assets will be used to construct and maintain

facilities during the initial stages of any contingency. The contractor will

then be deployed to sustain this existing infrastructure. The contractor is,

however, expected to have the capability to deploy and set up an

infrastructure if requested. For planning services and exercise

participation, the contractor could earn, under contract provisions, fees

totaling $4,439,168 over the full 5 years of the contract.

Other Programs Are

Managed by a Lead Service

To avoid duplication of effort and improve economy and efficiency of

programs that are used by all three services, the Defense Department has,

on occasion, designated one service as the lead manager. For example, the

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Army manages the wholesale stockpile of conventional ammunition for all

the services. The Army is also the lead service for the Defense

Department’s program to dispose of the chemical weapon stockpile.

Recommendations As mentioned, we discussed many of our observations on the changes that

are needed to improve the efficiency and effectiveness of LOGCAP with AMC

officials, and they have initiated or plan actions critical to improving the

effective delivery of services using LOGCAP. As part of this effort to improve

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

of the Army to include specific changes to LOGCAP that incorporate lessons

learned from the Bosnian operation and other missions, including

• developing doctrine and guidance for implementing LOGCAP that identify

the way to use the contractor effectively, the type of management

structure to establish, financial control and oversight requirements, and

mission planning considerations;

• providing training to commanders on using LOGCAP, including information

on contractor capabilities and roles and responsibilities in planning and

execution;

• providing assistance to commands when LOGCAP is implemented to include

deployable management teams; and

• developing improved financial reporting and internal controls mechanisms

that provide commanders with the assurance that LOGCAP services are

necessary and reasonably priced.

We also recommend that the Secretary of Defense determine whether the

Department’s needs for civilian augmentation support during operations

are met most effectively and efficiently through individual programs or

some other means such as one service acting as a single manager for the

others.

Agency Comments

and Our Evaluation

We received written comments on a draft of this report from the Defense

Department and they appear in their entirety in appendix III. The Defense

Department concurred with the report and both recommendations, noting

that it will continue initiatives to further improve the effectiveness and

efficiency of LOGCAP. The Department also stated that they considered the

actions in the recommendation to include specific changes to LOGCAP that

incorporate lessons learned to be complete. While we recognize that

various actions are planned or have been taken, all are not complete. For

example, the revision of Army regulations and field manuals is not planned

Page 25 GAO/NSIAD-97-63 Contingency Operations
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to be completed until early in fiscal year 1998. Consequently, we will

continue to follow up on the Department’s actions in each of the areas.

We also received comments from Brown and Root Services Corporation.

Brown and Root provided clarifying technical and editorial suggestions

that have been incorporated into this report where appropriate. Brown

and Root objected to the use of the term estimate on the basis that the

dollar figure it provided to the Army in December 1995 was a rough order

of magnitude. We revised the report to reflect Brown and Root’s position

and clarify why we used the term.

We are providing copies of this report to the Secretaries of Defense, the

Army, the Navy, and the Air Force and the Commandant, U.S. Marine

Corps. Copies will be made available to others on request. If you or your

staff have any questions on this report, please call me on (202) 512-8412.

The major contributors to this report are listed in appendix IV.

David R. Warren, Director

Defense Management Issues

Page 26 GAO/NSIAD-97-63 Contingency Operations
Page 27 GAO/NSIAD-97-63 Contingency Operations
Contents

Letter 1

Appendix I 

Scope and

Methodology

30

Appendix II 

Operational

Environment in

Bosnia Presented

Unique Challenges

32

Appendix III 

Comments From the

Department of

Defense

34

Appendix IV 

Major Contributors to

This Report

37

Tables Table 1: Major Operations in Which The Army Has Used Its

LOGCAP Contract

7

Table 2: Analysis of LOGCAP Cost Increases in Bosnia 10

Figures Figure 1: Dispersion of U.S. Base Camps in Bosnia, Hungary, and

Croatia

12

Figure 2: Many Camps Required Significant Engineering

Preparation

13

Figure 3: U.S. Military Base Camp in Bosnia Upgraded to Modular

Units

14

Abbreviations

AMC Army Materiel Command

LOGCAP Logistics Civil Augmentation Program

Page 28 GAO/NSIAD-97-63 Contingency Operations
Page 29 GAO/NSIAD-97-63 Contingency Operations
Appendix I 

Scope and Methodology

As agreed with your staffs, the scope of our work was limited to issues

related to how well the Logistics Civil Augmentation Program (LOGCAP)

worked once the decision was made to use the contract. It was also agreed

that other issues such as the program’s force structure implications and

the cost-effectiveness of using contractors versus military personnel may

be the subject of future reviews. To obtain information on how the Army

has used LOGCAP in recent peacekeeping operations, we reviewed the

Army’s LOGCAP regulation and implementing guidance. We discussed how

this regulation and guidance were applied with officials from the Army’s

Office of the Deputy Chief of Staff for Logistics, Office of the Deputy Chief

of Staff for Operations and Plans, Corps of Engineers, Corps of Engineers’

Transatlantic Program Center, and Office of the Chief of Army Reserves.

Because Bosnia was by far the largest use of LOGCAP and provided a

first-hand opportunity to observe the contract’s implementation, our

review focused primarily on that operation. However, we did generally

review information related to the other operations where it was used. We

also visited the U.S. Army, Europe, the U.S. European Command, and the

U.S. forces deployed in Hungary, Croatia, and Bosnia to observe

operations, talk with Army and contractor officials, and review records

related to the implementation of the contract.

To determine the LOGCAP cost for Bosnia and the primary reasons for its

growth, we obtained the Army’s initial cost estimate, prepared by the

contractor, from the LOGCAP program manager at the Corps of Engineers’

Transatlantic Program Center. We discussed the assumptions that were

used in developing the estimate with officials from the Corps of Engineers

and the Brown and Root Services Corporation. We also analyzed the

revised cost estimate submitted by the contractor in May 1996 and

attempted to compare that cost estimate with the original. A direct

comparison of the two estimates was not possible because of significant

differences in (1) the scope of work covered by the estimates and (2) the

way costs were reported. We discussed the results of this comparison with

military leaders responsible for the operation in Hungary, Croatia, and

Bosnia and with representatives from the Brown and Root Services

Corporation and obtained their views on the factors that contributed to

the cost increase. We did not attempt to determine whether the estimated

costs were reasonable. Our information on the Defense Department’s

estimate of $191.6 million was obtained from our prior work on the cost of

the Bosnian peacekeeping mission.1

1

Bosnia: Costs Are Uncertain but Seem Likely to Exceed DOD’s Estimate (GAO/NSIAD-96-120BR,

Mar. 14, 1996).

Page 30 GAO/NSIAD-97-63 Contingency Operations
Appendix I 

Scope and Methodology

To identify opportunities to improve LOGCAP, we interviewed officials from

U.S. Army, Europe responsible for logistics planning for the Bosnian

peacekeeping mission and visited U.S. Army, Europe base camps in

Hungary, Croatia, and Bosnia. We interviewed resource managers, base

camp mayors, members of the Joint Acquisition Boards, administrative

contracting officers, quality assurance representatives, and contracting

officer representatives from the Defense Contract Management District,

International, who oversaw the contract. We also reviewed minutes of

meetings at which LOGCAP was discussed and analyzed copies of weekly

cost status reports submitted to U.S. Army, Europe. We discussed the

adequacy of cost data with resource managers at U.S. Army, Europe and

the way they used the contractor’s cost reports to monitor costs. We did

not independently test internal controls but relied on the work of other

independent audit agencies, including the Defense Contract Audit Agency

and the Army Audit Agency. We interviewed auditors from the Defense

Contract Agency in Hungary and Croatia and at the contractor’s home

office in Houston, Texas, and discussed the scope of their work and the

tests they conducted of contract controls. We interviewed Army Audit

Agency auditors who tested the Army’s contract controls at their home

office in Wiesbaden, Germany, and reviewed all of their supporting

documents. We also spoke with Army Audit Agency managers responsible

for the review at their headquarters in Alexandria, Virginia. We also

analyzed lessons learned from the use of LOGCAP in prior missions from the

Defense Contract Management District, International, and the Army’s

Center for Army Lessons Learned.

To identify Army plans to award a new LOGCAP contract, we held

discussions with the new LOGCAP office at the Army Materiel Command.

We obtained information on the time frame for awarding the contract and

discussed changes needed to overcome problems experienced in Bosnia.

Our information on the Air Force Contract Augmentation Program was

obtained from Air Force officials in Washington, D.C., and its program

office at Tyndall Air Force Base, Panama City, Florida. Information on the

Navy Emergency Construction Capabilities Program was obtained from

Navy contracting officials in Alexandria and Norfolk, Virginia, and

Honolulu, Hawaii.

We conducted our review from April 1996 to December 1996 in

accordance with generally accepted government auditing standards.

Page 31 GAO/NSIAD-97-63 Contingency Operations
Appendix II 

Operational Environment in Bosnia

Presented Unique Challenges

Several factors created unique challenges for the Army as it implemented

LOGCAP during the Bosnia mission. These factors related to the uncertainty

of the U.S. role, the need for rapid deployment once the role was defined,

and the harsh weather environment. The role that U.S. forces would play

in Bosnia was uncertain until the Dayton Accords were signed on

December 14, 1995. The Accords called for an implementation force to

provide a secure environment for approximately 1 year to allow “breathing

space” or a “cooling off period” after several years of conflict. The United

States is a major force provider to the implementation force and occupies

North American Treaty Organization military leadership positions that are

responsible for the operation. The U.S. Army, Europe provided most of the

force and is the major command responsible for the mission’s logistics

planning and funding. As of July 19, 1996, about 22,200 U.S. troops were

deployed in support of the implementation force—about 16,200 to Bosnia,

1,400 to Croatia, and about 4,600 to Hungary and Italy.

The Accords required that U.S. forces deploy rapidly, and the

implementation forces had until January 19, 1996, to be in place and begin

enforcement. U.S. troops entered Hungary on December 12, 1995, to

establish a staging base for the deployment and on December 16, 1995,

they entered Croatia and Bosnia. The key military tasks in Bosnia have

been to (1) mark and monitor a 4-kilometer wide zone of separation

between the three warring factions, (2) patrol the zone of separation, and

(3) oversee the withdrawal of forces and weapons away from the zone and

back to their cantonment areas.

Deployment of the U.S. force occurred during one of the harshest winters

on record in the Balkans. Weather conditions, for example, affected

construction of a bridge over the Sava River to conduct the deployment

operation. An unexpected winter thaw resulted in major flooding, and this

bridge project became much larger than originally envisioned. The Army

had to use construction material intended to build two spans over the Sava

River to build the first span. Also, because of the holiday time of the year,

the European rail system was heavily involved in holiday passenger and

commercial traffic and rail employees were taking holiday vacations.

European rail did not respond to the deployment, which it did not view as

a wartime operation, with the sense of urgency it would have for a

wartime operation. A rail strike in France further complicated ground

transportation because many large railcars needed for the deployment

could not be moved from France to Germany.

Page 32 GAO/NSIAD-97-63 Contingency Operations
Appendix II 

Operational Environment in Bosnia

Presented Unique Challenges

Each of these factors affected the manner and extent to which LOGCAP was

used. For example, originally the contractor was to build, operate, and

maintain a support base in Hungary, while military engineer units were to

build the necessary base camps in Bosnia. Later, the contractor was to

upgrade the military-built camps. Because of the operational requirements

and the harsh winter weather, however, a decision was made to increase

the number of camps and to immediately upgrade the camps. Military

engineer units could not meet the full construction requirement, and the

contractor was brought in to assist with camp construction. The

contractor also provided building materials to the military engineer units

because it was able to procure and deploy supplies faster than the military

could.

Page 33 GAO/NSIAD-97-63 Contingency Operations
Appendix III 

Comments From the Department of Defense

Page 34 GAO/NSIAD-97-63 Contingency Operations
Appendix III 

Comments From the Department of Defense

Now on p. 26.

Now on p. 5.

Page 35 GAO/NSIAD-97-63 Contingency Operations
Appendix III 

Comments From the Department of Defense

Now on p. 26.

Page 36 GAO/NSIAD-97-63 Contingency Operations
Appendix IV 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Thomas J. Howard

Glenn D. Furbish

David F. Combs

Robert R. Poetta

(709193) Page 37 GAO/NSIAD-97-63 Contingency Operations
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