United States General Accounting Office

GAO Report to Congressional Committees

February 1998 BASE OPERATIONS

DOD’s Use of Single

Contracts for Multiple

Support Services

GAO/NSIAD-98-82

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-279121 

February 27, 1998

Congressional Requesters

This report responds to the requirement of the report by the National

Security Committee, House of Representatives, on the National Defense

Authorization Act for Fiscal Year 1998 that we review the Department of

Defense’s (DOD) use of a single contract for multiple base operations

support functions. The June 16, 1997, report noted that there was little

information on how these contracts work, what services are best delivered

under this arrangement, and what savings are realized. In response, this

report addresses (1) the history and characteristics of selected single

contracts for multiple base operations support services, (2) the kinds of

services procured under these contracts, (3) lessons DOD has learned from

the use of these contracts, (4) whether small businesses participate in

these contracts, and (5) whether cost and efficiency gains have been

documented.

This report provides detailed information about the use of single contracts

for multiple base operations support services at 10 military installations in

the continental United States. We selected these installations from a list of

15 that were identified for us by DOD officials. The officials could not

identify all installations that use these kinds of contracts because they do

not compile that information; however, they believe the number of such

contracts is relatively limited. Our scope and methodology is described in

appendix I.

Background Base operations support services, generally called commercial activities,

are the functions necessary to support, operate, and maintain DOD

installations. Although the Office of Management and Budget (OMB)

identifies 29 services as base support functions, DOD does not have a

generally accepted definition of base support services, and the military

services differ in how they define them. Without a common definition it is

difficult to accurately determine the size and cost of DOD’s base support

workforce; however, DOD estimates that base support activities such as

facilities and vehicle maintenance, food services, and local transportation

cost more than $30 billion in fiscal year 1997.

Numerous studies from the 1993 Bottom-Up Review through the recent

Quadrennial Defense Review, Defense Reform Initiative, and National

Defense Panel have concluded that DOD could realize significant savings by

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outsourcing commercially available support services. Some studies have

concluded that DOD could achieve the largest savings by using a single

contract, rather than several smaller contracts, to encompass multiple

base operations support services.

Although a subject of increasing emphasis in recent years, federal agencies

have been encouraged, since 1955, to obtain commercially available goods

and services from the private sector through outsourcing, or contracting

out, whenever they determine it is cost-effective. In 1966, OMB issued

Circular A-76, which established federal policy for the government’s

performance of commercial activities and set forth the procedures for

studying commercial activities for potential contracting. Later, in 1979,

OMB issued a supplemental handbook to the circular that included the

procedures for competitively determining whether commercial activities

should be performed in-house, by another federal agency through an

interservice support agreement, or by the private sector. OMB updated this

handbook in 1983 and again in March 1996.

Results in Brief The history and characteristics of selected single contracts for multiple

base operations support services varied at the 10 installations we

reviewed. The decisions to use a single contract for multiple services

occurred in two ways. At seven installations, the decision occurred at the

time of a commercial activity, or A-76, study. In the other three cases, the

decision was made at the time the installation or its current mission was

established. One installation has been using a single contractor for

multiple services since the 1950s. Most of the other installations began

using single contracts for multiple services in the 1980s but one, Laughlin

Air Force Base, awarded its contract in 1996. Most of the contracts were

awarded for 5 years and ranged from about $5.4 million to $100 million

annually. Seven of the 10 installations awarded fixed-price-award-fee

contracts. Although some installations received extensive base operations

support services through a single contract, none received all of its required

services through a single contract. At all 10 installations, base operations

support requirements were met through some combination of single

contracts for multiple services, single contracts for specific services,

regional contracts for specific services, and the use of in-house personnel.

The kinds of services procured under the multiple service contracts also

varied and were influenced by a number of factors, including the mission

and functions performed at the installation, missions of tenant activities,

existing contractual arrangements, a desire to keep some functions

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in-house, and legislative restrictions. The activities contracted out ranged

from relatively basic tasks such as messenger mail and refuse services to

more complex ones such as computer software development and utilities

systems operations. Comparing and contrasting services between

contracts and installations to precisely say what services were included or

excluded from individual contracts in comparison with others is difficult

because there are no generally accepted definitions for base operations

support services. As a result, contracting officials often used the same or

similar terms differently—not always referring to or including the same

categories or subcategories of services.

DOD officials at the 10 installations we reviewed have learned a number of

lessons from their experiences with single contracts for multiple base

operation support services, including the need for well-defined

performance work statements, and when to use best-value selection

criteria and contract performance incentives. The officials also cited the

need for maintaining good contractor-government relations. Although

many contracting officials we spoke with stated that coordination is much

easier when there is a single contract, they acknowledged problems can

still arise.

At 3 of the 10 installations we reviewed, small businesses were

participating in single contracts for multiple base operations support

services. In all three cases, the small business was the prime contractor

and the contracts were awarded under various small business programs.

Small Business Administration and DOD officials are aware that

consolidating multiple base operation services into single contracts may

reduce the participation of small businesses as prime contractors. In 1996,

DOD issued a policy statement requiring the services to consider the effect

of consolidating contract requirements on small businesses when

considering outsourcing. Also the Small Business Administration

Reauthorization Act for Fiscal Year 1997 adds new provisions to

section 15(a) of the Small Business Act, which at the time of our work

required federal agencies to consider the effect on small businesses when

requirements currently being performed by small business are considered

for consolidation.

Although contracting officials reported efficiency gains, cost savings from

using single contracts for multiple base operations support services are

not documented. Moreover, at most of the installations savings cannot be

easily quantified because there is no requirement to track savings. In

addition, the contracts have changed since the initial commercial activities

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studies were completed so there is no basis for comparative analysis.

Some of the efficiency gains that have been cited include reduced

overhead, cross utilization of contract personnel, and increased flexibility.

History and

Characteristics of

Single Contracts for

Multiple Services Vary

Most of the multiple service contracts were initiated when the installation

performed a commercial activities study and all but one were established

in the 1980s or earlier. As shown in table 1, the estimated costs of the

contracts range from $5.4 million to $100 million annually and most were

awarded on a fixed-price basis. Single contracts for multiple support

services were critical to meeting the overall requirements for base

operations support at all 10 installations we reviewed; however, none used

a single contract to meet all of its requirements.

Table 1: Characteristics of Multiple Service Contracts

Dollars in milllons

Installation

Multiple

service

contract since

fiscal year Contract type

Est. base

year cost

Current

contract dates

and years

Small

business

Origin of

original

contract

Vance Air Force Base,

Oklahoma

1961 Fixed-price $40.2 FY 96-00

5 years

No New work

Arnold Engineering

Development Center,

Tennessee

1951 Cost $100 FY 96-03

8 years

No New work

Laughlin Air Force Base, Texas 1997 Fixed-price $5.4 FY 97-01

5 years

Yes A-76

Fort Belvoir, Virginia 1986 Fixed-price $12 Apr. 1995 -

Mar. 2000

5 years

No A-76

Fort Irwin National Training

Center, California

1982 Cost $14.2

$35.3

FY 96-00

FY 97-01

5 years each

No A-76

Tank-Automotive & Armaments

Command, Warren/Selfridge,

Michigan

1983 Cost $15 FY 94-98

5 years

No A-76

Naval Submarine Base

Bangor, Washington

1976 Fixed-price $40 FY 98-07

10 years

No New work

Naval Air Station Whidbey

Island, Washington

1987 Fixed-price $15.3 FY 97-01

5 years

Yes A-76

Naval Air Station Whiting Field,

Florida

1983 Fixed-price $6.6 FY 97-01

5 years

Yes A-76

Naval Air Station Fallon,

Nevada

1987 Fixed-price $15 FY 98-02

5 years

No A-76

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Most Multiple Service

Contracts Resulted From

Commercial Activity

Studies

At 7 of the 10 installations we reviewed, we were told that the decisions to

use single contracts for multiple services occurred when the installations

performed formal studies to determine whether the commercial activities

should be performed in-house or by a contractor. All of these contracting

efforts, except one, were initiated in the 1980s. At the other three

locations, officials told us that the decision to use a single contract for

multiple services was made at the time that the installation or its current

mission was established.1

Of the installations we visited, Laughlin Air Force Base was the one that

most recently made a decision to use a single contract for multiple

services in connection with a commercial activities study. A contracting

official at Laughlin stated that the study had been done as a result of a DOD

Management Review Directive. The study, conducted from April 9, 1992, to

July 12, 1996, resulted in a contract awarded in 1996 pursuant to a small

business set-aside. The contract initially is for about $5.4 million annually

and will provide for functions dealing with supply, civil engineering, fuels

management, and vehicle operation and maintenance.

Naval Air Station Fallon went to a multiple service contract in 1987

following a commercial activities study that was conducted from May 1981

until January 1984. Officials at Fallon could not say for certain but

believed the study was conducted because of the priority placed on

contracting out at the time. The current contract is the third multiple

service contract and is worth about $15 million annually. The contract

covers such functions as food service, supply, pest control, custodial,

housing, and airfield services, as well as operating a combined bachelor

quarters facility.

At the U.S. Army Tank-Automotive and Armaments Command in Michigan,

we found that the Army had two contracts for multiple base operations

support services that followed separate commercial activities studies

conducted in 1981 and 1982. Each of the contracts covered services at

separate locations that are approximately 20 miles apart. Each contract

was competitively awarded until fiscal year 1989 when a decision was

made that it would be in the best interest of the government to combine

the requirements under a single multiple service contract and reduce

overhead and contract administration costs. The current contract for

approximately $15 million annually covers such functions as freight,

1

Under OMB Circular A-76, bases may contract for services without an A-76 competition between an

in-house workforce and the private sector to meet new work requirements.

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supply, warehousing, facility engineering, housing, and administrative

services at the two locations.

At three installations—Vance Air Force Base, Arnold Air Force Base, and

Naval Submarine Base Bangor—the decision to use multiple service

contracts was made at the time the installation was established. The

decision at Vance was based on an Air Force decision to evaluate the

success of contracting out as compared to another base that performed

the services with in-house personnel. At Arnold Air Force Base, the

decision was based on a 1950 study by the Scientific Advisory Board of

how the engineering development and test center should be operated.

According to contracting officials, the study recommendation and a lack of

qualified Air Force personnel at the time led the Secretary of the Air Force

to direct that the services be provided through a contract. Naval

Submarine Base Bangor was activated in 1976 and the decision to contract

out base operations support services, according to a contracting official,

was based on a study by a private Seattle company that determined a

contract operation would be more cost-effective.

Most Multiple Service

Contracts Are Fixed-Priced

Type

At 7 of 10 installations we reviewed, contracting officials have awarded

fixed-price contracts for multiple base operations support services (see

table 2).

Table 2: Installations Reviewed and

Current Contract Type Principal multiple service contract

Base Type Fee

Vance Air Force Base Fixed price Award fee

Arnold Air Force Base Cost Award fee

Laughlin Air Force Base Fixed price None

Fort Belvoir Fixed price None

Fort Irwin Cost Award fee

Tank-Automotive and Armaments

Command, Warren and Selfridge

Cost Award fee

Naval Submarine Base Bangor Fixed price Award fee

Naval Air Station Whidbey Island Fixed price Award fee

Naval Air Station Whiting Field Fixed price None

Naval Air Station Fallon Fixed price Award fee

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At the other three locations, contracting officials have awarded cost type

contracts. In some instances, incentives or award fees were included

within each of these types of contracts to contain or reduce costs.

Regardless of the contract type, eight have been awarded on a 5-year basis.

A firm-fixed price contract provides for a price that is not subject to any

adjustment on the basis of the contractor’s cost experience in performing

the contract. It remains firm for the life of the contract unless revised

pursuant to the changes clause in the contract. It places maximum risk on

the contractor and minimum risk on the government. The contractor is

responsible for all costs incurred and the resulting profit or loss. The cost

contract places more risk on the government and less risk on the

contractor. Under cost contracts, the contractor is reimbursed for all

reasonable and allowable costs incurred.

In conjunction with these contracts, award fees are often used to provide

incentives for outstanding performance in areas such as timeliness,

quality, and cost effectiveness. The maximum amount of the award,

periods of evaluation, and the officials who determine the fee are specified

in an award-fee plan that is part of the contract. With the exception of

three contracts, an award fee provision was included to foster maximum

contractor performance based upon the government’s subjective

evaluation of the contractor’s level of performance.

At Fort Irwin, contracting officials decided that a cost-type contract was

preferable to fixed price because the workload and workforce were

continually changing and requirements could not be adequately defined

beforehand. At Vance, the decision to use a fixed-price contract was due

to the nature of the contract requirements, where the contractor provides

mainly labor, and the number of employees, their respective labor rates,

and expected hours were all known. This allowed contracting officials and

offerors to estimate the cost of the contract with a higher degree of

confidence.

The multiple service contracts we reviewed were generally awarded for

5 years (1 base year and 4 option years). However, we did find two

contracts with longer performance periods. At Arnold Air Force Base its

cost-plus-award-fee contract was awarded in 1995 for 8 years (5 years and

a single 3-year option) to foster workforce stability and morale. At the

other, Naval Submarine Base Bangor, a 10-year fixed-price-award-fee

contract (1 base year and 9 option years) was awarded in 1997. Based on

suggestions from contractors during a presolicitation conference, the

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Bangor contract was increased from 5 to 10 years to save money over the

life of the contract by allowing contractors to spread their costs over more

years. Officials also expected that the change would encourage more

companies to compete for the contract. The contract also includes

incentives for the contractor to reduce costs. It further includes a

provision for the contractor to meet ISO 90002

 standards to better ensure it

can meet customer requirements and help reduce contract monitoring

costs.

Multiple Service Contracts

Are One Tool for

Accomplishing Base

Operations Support

At the 10 installations we reviewed, base operations support requirements

were being met through a variety of means, including in-house personnel,

as well as single contracts for multiple services, single contracts for

specific services, and regional contracts. Several of the installations,

including Arnold Air Force Base and Naval Submarine Base Bangor, rely

heavily on single contracts for multiple base operations support services.

In contrast, Fort Belvoir and Naval Air Station Whiting Field use single

contracts for multiple services but also rely heavily on other contracts or

in-house personnel to meet these support requirements.

Arnold has used a single contract for virtually all base operations support

services from the time the installation was established. The first multiple

service contract was awarded in 1951 and provided for all testing and

support services at the installation. In fiscal year 1981, the contract was

separated into three contracts—two testing contracts and one for multiple

base operations support services. The support services contract includes a

wide variety of functions such as central computer operations, base

support and maintenance, environmental, utilities, logistics,

transportation, base security, and fire protection. In addition, Arnold uses

in-house personnel to perform morale, welfare, and recreation services.

Similarly, Bangor accomplishes nearly all base operations support service

requirements through a single contract. The current contract for multiple

support services spans 10 years and provides a wide range of base support

services, including administrative support, various public works services,

utility and supply services, and security services. Bangor has used a

multiple service contract for base operations support services since it was

activated as a submarine base in 1976. Bangor has several individual

contracts to meet additional support needs such as family services, food

2

ISO 9000 is a series of international standards for quality management and quality assurance and

represents an international consensus on good management practices with the aim of ensuring that an

organization can consistently deliver products or services that meet the customer’s quality

requirements.

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preparation and administration, architect and engineering services, and

maintenance of automated data processing equipment. Also, Bangor

provides services such as morale, welfare, and recreation; automated data

processing; and crane inspection and certification through the use of

in-house personnel.

In contrast, Fort Belvoir and Naval Air Station Whiting Field are using

single contracts for multiple services but also rely heavily on other

contracts for specific support services, and in-house personnel to meet

base operations support requirements. Fort Belvoir’s current multiple

support services contract is a firm-fixed price contract for 5 years. The

contract includes such services as family housing, grounds, pest control,

hospital operations and maintenance, and refuse collection. Fort Belvoir

uses other contracts for specific support services such as major road

repairs, asbestos removal, and custodial services. Military personnel

provide such services as installation security and medical functions at the

hospital. In-house civilians provide morale, welfare, and recreation;

logistics management; and information management services.

Similarly, Whiting Field meets its needs for base operations support

through a single contract for multiple support services, several contracts

for specific services, and the use of in-house personnel. The current

multiple service contract was awarded for 5 years beginning in fiscal

year 1997. Services in the contract include waste water treatment, pest

control, grounds maintenance, hazardous materials management,

communications systems, transportation, and utilities services. The first

contract was awarded in fiscal year 1983 for a 3-year period following a

commercial activities study. In addition to the multiple service contract,

functions such as custodial, military family housing maintenance and

repair, aircraft maintenance, and simulation are provided under single

service contracts. Services such as morale, welfare, and recreation; fire

protection; supply services; ground electronics; and child development are

provided by in-house personnel.

Services Provided by

Multiple Service

Contracts Reflect

Varied Installations

Needs

At the 10 installations we reviewed, the single contracts for multiple

support services generally contained a broad range of activities such as

refuse collection to computer support. Appendix II identifies selected base

operations support activities included in contracts we reviewed. Although

contracting officials often use the same or similar terms for services

differently, we found that activities such as public works services, pest

control, hazardous waste removal, family housing management, and

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administrative services were generally included in the multiple support

service contracts—although differences existed in the degree to which

activities within these categories were included in individual contracts.

Thus, individual contracts we examined varied in the extent to which the

range of activities identified at one installation were comparable with

another installation’s contract.3

Functions and base support activities included in a given contract may

vary due to requirements of the installation designing the contract to meet

individual needs associated with its mission, the geographical location,

and command preferences. For example, contracting officials said that

base commanders need the flexibility to determine which functions to

include in their multiple service contracts in order to most effectively

serve each base’s needs. At Arnold Air Force Base, where the mission is

the testing of aerospace hardware, a provision was developed to preclude

a manufacturer of aerospace hardware from competing for the contract,

thus avoiding a conflict of interest. At Fort Irwin functions such as provost

marshall and morale, welfare, and recreation were included because the

base was being reactivated, while cooking was excluded so that soldiers

could receive training. The geographic location of Laughlin Air Force Base

affected services in its contract because, according to officials, the grass in

that region grows extremely fast and must be cut frequently.

Lessons Learned

From Multiple Service

Contracts

Contracting officials at the 10 installations we reviewed have learned a

number of lessons from their experience with single contracts for multiple

base operations support services. Among the lessons most often cited

were the need for well-developed and articulated requirements, and the

importance of award fees and best-value selection criteria where

appropriate. Also, while there can be significant advantages to using

multiple service contracts, there can be some disadvantages.

Well-Defined Requirements

Are Critical to Good

Performance

Well-developed contract requirements articulated in performance work

statements were often mentioned as necessary to the successful execution

of multiple service contracts. Contracting officials stated that the contract

requirements should, in the case of simple tasks, be very specific so there

is no question as to what is expected. For more complex situations and

needs, results-oriented requirements that describe the government’s

desired outcomes without telling the contractor exactly how to

3

DOD does not have a generally accepted definition of what should be included in base operations

support contracts and the services differ in how they define base support activities; therefore, it is

difficult to compare and contrast services between contracts and installations.

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accomplish the tasks are preferable. Contracting officials at Naval

Submarine Base Bangor stated that the performance work statement in

their multiple service contract was a good example of such

results-oriented requirements. For example, they cited the area of vehicle

maintenance, where the performance work statement states that the

contractor is to maintain vehicles in accordance with the manufacturers’

schedules, and that the amount of time that the vehicles are not available

for use shall not exceed minimum standards. They also stated a

well-defined performance work statement is the key to meeting these

requirements and preventing excessive modifications to contracts and

unanticipated cost increases.

The Laughlin base operations support contract, solicited and awarded by

officials at the Air Education Training Command, contains no award-fee

provision because the contracting officials believed that the contract was

so straightforward and well defined that an award fee was not necessary

to get quality service for the base. While at Fort Belvoir, a contracting

official stated that many of the modifications to their multiple service

contract were due to incorrect inventories of equipment and confusion

over what equipment the contractor could use. They also said that when

discrepancies arise as to what is required, it is often because requirements

are not covered adequately in the contract and the government must

modify the contract to get the services needed.

Award Fees Viewed as

Improving Contractor

Responsiveness

Contracting officials at 8 of the 10 installations we reviewed stated that

award fees help focus the contractor on feedback from base personnel

receiving the services and result in better responsiveness and higher

quality work because these awards provide a monetary incentive for

outstanding performance.

At two of the installations where the contracts did not contain an award

fee—Laughlin Air Force Base and Fort Belvoir—we were told that, at the

time of the solicitation, the officials involved determined that the contract

requirements were not complex enough to warrant the use of an award

fee. In the case of Laughlin, the decision not to incorporate an award-fee

provision was made by officials not directly located at the installation.

According to a contracting official at Laughlin, officials at the Air

Education Training Command, who solicited and awarded the Laughlin

contract, believed that the contract was straightforward and well defined

enough that an award fee was not necessary to get quality service for the

base. At Fort Belvoir the contract was transferred to them from the Army

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Corps of Engineers after it had been solicited and awarded. When the

Corps moved from Fort Belvoir, responsibility for contract administration

was transferred to the Fort Belvoir Directorate of Contracting.

Subsequently, the contracting officials that are currently administering the

contracts at Laughlin and Fort Belvoir told us that based on their contract

administration experiences, they would prefer to have an award-fee

provision because they believe it would ensure improved contractor

responsiveness and attention to quality.

Best-Value Are Criteria

Helpful to Contracting

Officials

Contracting officials stated that best-value criteria in selecting a

contractor can be important because this allows the contracting agency to

avoid selecting contractors that have lower offers but may not have the

capability to effectively execute the contract. Through the use of a bestvalue selection process, a government agency can select an offer from the

private sector that is most advantageous to the government, considering

price or cost as well as past performance and other noncost factors. The

agency does not have to select the lowest priced, acceptable offer. In a

commercial activities (A-76) study, the “best value” private sector offer is

compared to the government’s in-house proposal on the basis of cost only.

Best-value criteria are considered most appropriate when work involves

higher levels of complexity, significant technical expertise, and risk. In

these situations, the government may be able to obtain a better value by

comparing the various private sector technical proposals and making

trade-offs between various technical and noncost factors such as past

performance as well as costs.

Officials explained that a contractor who wins based upon a low price that

does not provide adequate profit is less likely to focus on quality or

responsiveness and more likely to put forth only minimal effort to retain

some profit or cut losses. Such situations can be more expensive for the

government because of the cost of modifying contracts or finding a new

contractor when one defaults.

Single Contracts Viewed as

Enhancing Coordination

but Can Become

Cumbersome

Our previous outsourcing work identified the benefits and drawbacks of

using single contracts for multiple base operations support services.4

Benefits can include (1) a single manager accountable for performance;

(2) greater opportunities for efficiencies, such as reduced overhead; and

(3) reduced cost and effort to develop and award one contract versus

4

Base Operations: Challenges Confronting DOD as It Renews Emphasis on Outsourcing

(GAO/NSIAD-97-86, Mar. 11, 1997).

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multiple contracts. Conversely, while single contracts may produce large

savings, they do not always succeed and can adversely affect a greater

number of activities when problems arise.

Contracting officials we spoke with during this review told us that

coordination is much easier when there is a single contractor. One official

stated that base operations support tasks are often interrelated and require

good coordination for smooth operations. This official said that the

interrelationships between tasks amplify the benefits of a reduced need for

coordination.

For example, an official at Laughlin Air Force Base stated that failed

coordination between two contractors prevented a third contractor from

being able to perform assigned duties, when a dispute occurred over who

was responsible for mowing the airfield. This impacted the third

contractor’s ability to effectively spray for bugs to help reduce the number

of birds attracted to the airfield. As a result, this official stated that the

base was not able to fly up to 300 sorties of additional training because

birds, attracted to the airfield by the bugs in the long grass, can be pulled

into a jet engine causing damage. This contracting official said that if one

contractor had been solely responsible for all these tasks the coordination

would not have been necessary. In contrast, at Vance Air Force Base these

services are provided by one contractor; as a result, all coordination

responsibilities lie with that contractor.

Fort Irwin had difficulties with a multiple service contract. The size and

complexity of Fort Irwin’s contract had grown until the administration and

overall management of the contract had become cumbersome and in some

cases not responsive to the needs of the installation. For example, the

contractor directly supports the training mission of the base by

maintaining combat equipment used in training. Officials found that the

contractor was more focused on maintaining this equipment than on

providing other installation support functions, such as public work

services and range, airfield, and training support functions. In 1994, Forces

Command conducted a study to determine whether the one multiple

service contract was in the government’s best interest. As a result of this

study, Fort Irwin’s contract was divided into five separate contracts—two

base support contracts to support the logistical and installation support

functions and three individual contracts for custodial, food services, and

indefinite quantity work.

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Small Businesses

Participate, but

Concerns Remain

At 3 of the 10 installations we reviewed, small businesses were

participating as prime contractors under single contracts for multiple base

operations support activities. In each case, the small business was

awarded the prime contract under programs designed to assist small and

disadvantaged businesses. Participation by small businesses in multiple

service contracts is a sensitive issue because the scope of requirements

can reduce the ability of small businesses to compete as prime

contractors. DOD officials recognize this and have taken actions to enhance

small business participation, but Small Business Administration officials

remain concerned about the potential impact of multiple service contracts.

The Small Business Administration Reauthorization Act for Fiscal

Year 1997 adds new provisions to section 15(a) of the Small Business Act,

which at the time of our work required federal agencies to consider the

effect on small businesses when requirements currently being performed

by small business are considered for consolidation. The Reauthorization

Act, among other things, instructs agencies, to the “maximum extent

practicable—avoid unnecessary and unjustified bundling of contract

requirements that precludes small business participation in procurements

as prime contractors.”

Small Businesses Are

Prime Contractors on

Multiple Service Contracts

The small business contracts we encountered were awarded under one of

two programs. At two locations—Laughlin Air Force Base and Naval Air

Station Whiting Field—the contract awards were set aside exclusively for

competition among small businesses. At Naval Air Station Whidbey Island,

the contract with a small disadvantaged business was negotiated on a

sole-source basis directly with the Small Business Administration under

section 8(a) of the Small Business Act.

Whiting Field performed a commercial activities study in 1983 and

awarded the first contract competitively. During the second competition in

1985, a small business was awarded the contract and it has been

performed by a small business since then. The current contract is for

approximately $6.6 million annually and provides for a range of base

functions such as utilities services, grounds, pest control, mail, and fuel

distribution.

Whidbey Island contracted with a small business for approximately

$15.3 million annually to provide base functions such as maintenance of

property, grounds, utilities, housing, supply operations, warehousing, and

refuse services. This contract was originally awarded to a small business

in fiscal year 1987. During the second procurement in fiscal year 1992, it

Page 14 GAO/NSIAD-98-82 Base Operations
B-279121 

was determined that there would not be enough small businesses to

compete; therefore, the solicitation was unrestricted, and the contract was

awarded to a large business. When it was time to resolicit the third

procurement in fiscal year 1997, the government was contacted by a small

disadvantaged firm and the contracting officer worked with the Small

Business Administration to subcontract with the small disadvantaged

business under the 8(a) program.

Concerns Remain About

Overall Impact on Small

Business Participation

Small Business Administration and DOD officials are concerned that

consolidating multiple base operation services into single contracts may

limit the participation of small businesses as prime contractors.

Contracting officials also stated that it was difficult for small businesses to

compete for multiple service contracts due to the high cost of preparing

proposals and the low probability of winning against large business.

Small Business Administration officials stated that their primary concern

with omnibus contracts is in cases where requirements that were

previously performed by small business are consolidated with other

contract requirements so that small business participation becomes less

likely. They noted that it is generally not to the advantage of small

business to have all or many requirements for base operations included in

one contract.

On October 28, 1996, the Deputy Secretary of Defense issued a policy

statement concerning the consolidation of requirements. In it, the Deputy

Secretary announced that in planning to consolidate several contracts or

requirements, the services must consider the effect on small businesses.

According to the Deputy Secretary, requirements cannot preclude small

businesses as prime contractors unless a market research analysis shows

significant benefits in terms of reduced costs and services or both. The

policy statement recognizes the balance that must be maintained between

the potential cost benefits that can be obtained through consolidated

contracts and the loss of small business participation. The Deputy

Secretary’s statement also recognizes the policy of fostering the

participation of small business in federal contracting embodied in statutes

such as the Small Business Act and section 2323 of title 10 as implemented

by the Federal Acquisition Regulation and Defense Federal Acquisition

Regulation Supplement.

According to several contracting officials, the high cost of preparing a

proposal combined with a low probability of winning against large

Page 15 GAO/NSIAD-98-82 Base Operations
B-279121 

business competition often makes small businesses reluctant to compete

for contracts that are not set aside exclusively for small business. For

those contracts not awarded to small business, we found only one case

where a small contractor competed against a large business. In this case

during the evaluation, the small business was determined to be outside the

competitive range because it did not fully respond to the scope and terms

of the solicitation.

Small Business

Administration

Reauthorization Act

Addresses Bundling

The Small Business Administration Reauthorization Act of 1997, among

other things, amends the provisions in section 15(a) of the Small Business

Act concerning the consolidation of agency requirements. The act requires

federal agencies to consider the impact on small businesses’ ability to

compete when considering consolidating requirements that have been

performed by small businesses into multiple services contracts. The

consolidation must be justified by measurable substantial benefits and be

subject to review by the agency’s Small Business Administration

Procurement Center Representative. Small Business Administration

officials told us they are drafting guidelines for federal agencies to follow

in implementing this requirement. They expect the guidelines to be

completed by September 1998.

Savings Are Not

Documented, but

Efficiency Gains Are

Recognized

Although contracting officials reported efficiency gains, cost savings from

using single contracts for multiple base operations support functions are

not documented. Moreover, at most of the installations savings cannot be

easily quantified because once a commercial activities study is completed

there is no requirement to track actual savings. Some of the efficiency

gains that have been cited include reduced overhead, cross utilization of

contract personnel, and increased flexibility.

Savings Cannot Be Easily

Quantified

As previously discussed, at 7 of the 10 installations we reviewed, an initial

determination had been made that it was cost-effective to contract out

base operation support services. The other three installations contracted

out from the time of inception of the base or its mission and did not

necessitate an A-76 study.

Each of the seven installations that performed an A-76 study had

determined that the commercial activities could be performed more

economically by contracting out. These commercial activities studies

involved comparing estimated contract and in-house costs for the specific

Page 16 GAO/NSIAD-98-82 Base Operations
B-279121 

work to be performed to determine the most cost-effective approach.

However, once the decision was made that it was more cost effective to

contract for the services, the officials were not required to track actual

savings. In this regard, contracting officials told us that because the nature

of the requirements being contracted has changed enough over time, any

baseline for cost comparisons has been lost.

Officials See Efficiencies in

Multiple Service Contracts

Officials stated that single contracts for multiple base operations services

had some obvious efficiency gains that are not available under separate

contracts, such as reduced overhead, cross utilizations of contract

personnel, and reduced solicitations. For example, contracting officials at

Vance, Whidbey Island, and Fallon stated that less work is required to

conduct a single competition for a large contract than multiple

competitions for smaller contracts. At Warren/Selfridge, Vance, and

Bangor, officials told us that the ability to cross-utilize personnel was an

advantage. Also, at Warren/Selfridge, Whiting Field, and Whidbey Island

officials told us the reduced overhead associated with single contracts for

multiple base operations services is an advantage.

Conclusions Single contracts for multiple services were one tool being used to meet

base operations support needs at the 10 installations we reviewed.

Although some installations received extensive support through a single

contract, none received all of their required services through a single

contract. The history and characteristics of the contracts varied between

the 10 installations and the services obtained through the contracts often

reflected differences in mission and geographical location. Comparing and

contrasting services between contracts and installations to precisely say

what services were included or excluded from individual contracts in

comparison with others is difficult because there are no generally

accepted definitions for base operations support services. All of this

suggests that multiple service contracts need to be tailored to the needs,

missions, and other factors effecting individual installations.

Agency Comments

and Our Evaluation

In commenting orally on a draft of this report, DOD believed our conclusion

did not sufficiently recognize that variations in multiple service contracts

were necessary and good. Specifically, DOD emphasized that because such

contracts are intended to satisfy the individual installation’s requirements

a standard contract will not necessarily fit the needs of all installations.

We revised the report to reflect that our work suggests that multiple

Page 17 GAO/NSIAD-98-82 Base Operations
B-279121 

service contracts need to be tailored to the needs, missions, and other

factors of importance to the installation.

DOD also noted that our report did not recognize all factors that may

prevent small businesses from participating in multiple service contracts.

Specifically, DOD cited limits on the amount of work that can be

subcontracted as a factor, which prevents small businesses from

competing as prime contractors. This factor was not identified as a

significant issue at the ten installations we reviewed. DOD also noted that

our report did not discuss whether small businesses were participating as

subcontractors on multiple service contracts. We recognize that small

businesses are likely participating as subcontractors, but we did not

collect data about subcontracts as it was outside the scope of our work.

The Small Business Administration provided technical clarifications,

which we incorporated where appropriate.

We conducted our review from August 1997 to February 1998 in

accordance with generally accepted government audit standards. We are

sending copies of this report to the Secretaries of Defense, the Army, the

Navy, and the Air Force; the Administrator, Small Business

Administration; and the Director, Office of Management and Budget. We

will make copies available to others upon request.

Please contact me at (202) 512-8412 if you or your staff have any questions

concerning this report. Major contributors to this report were Barry W.

Holman; Tom Howard; C. Douglas Mills, Jr.; John R. Beauchamp; Patricia

F. Blowe; and John Brosnan.

David R. Warren, Director

Defense Management Issues

Page 18 GAO/NSIAD-98-82 Base Operations
B-279121 

List of Requesters

The Honorable Strom Thurmond

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Ted Stevens

Chairman

The Honorable Daniel Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Floyd Spence

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on National Security

House of Representatives

The Honorable C.W. Bill Young

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on National Security

Committee on Appropriations

House of Representatives

Page 19 GAO/NSIAD-98-82 Base Operations
Contents

Letter 1

Appendix I 

Scope and

Methodology

22

Appendix II 

Selected Base Support

Functions

25

Appendix III 

Multiple Service

Contract History for

Military Installations

Reviewed

26

Tables Table 1: Characteristics of Multiple Service Contracts 4

Table 2: Installations Reviewed and Current Contract Type 6

Abbreviations

DOD Department of Defense

OMB Office of Management and Budget

OSD Office of the Secretary of Defense

TACOM Tank-Automotive and Armaments Command

Page 20 GAO/NSIAD-98-82 Base Operations
Page 21 GAO/NSIAD-98-82 Base Operations
Appendix I 

Scope and Methodology

To examine the use of single contracts for multiple base operations

support services, we held discussions with cognizant Office of the

Secretary of Defense (OSD), Army, Navy, and Air Force officials. While no

central listing of these contracts existed, these officials were able to

identify the following 15 installations as locations that contracted out

multiple base operations support services under a single contract.

Air Force Arnold Engineering Development Center, Arnold Air Force Base,

 Tennessee

Laughlin Air Force Base, Texas

Vance Air Force Base, Oklahoma

Army Fort Belvoir, Virginia

Fort Irwin, National Training Center, California

Tank-Automotive and Armaments Command (TACOM), Michigan

 US Army Garrison Selfridge

 TACOM-Warren

Navy Naval Submarine Base Bangor, Washington

Naval Submarine Base Kings Bay, Georgia

Naval Air Station Fallon, Nevada

Naval Air Station Whidbey Island, Washington

Naval Air Station Whiting Field, Florida

Naval Air Facility El Centro, California

Naval Station Roosevelt Roads, Puerto Rico

Naval Security Station, Washington, D.C.

Other Activities U.S. government activities in the Republic of Singapore

We did not independently validate the information provided by the

services but accepted it as a sample of locations utilizing single contracts

to perform multiple base operations support services. From this list, we

selected 10 to visit and examine their current multiple service contract. We

reviewed legislation, various reports, and studies and held discussions

with the Office of the Secretary of Defense; U.S. Headquarters Forces

Command; Naval Facility Engineering Command; and Secretary of the

Army for Research, Development, and Acquisition officials. Likewise, we

held discussions with the Office of Small and Disadvantaged Business

Page 22 GAO/NSIAD-98-82 Base Operations
Appendix I 

Scope and Methodology

Utilization, Office of Assistant Deputy Under Secretary of Defense, the

Small Business Administration, and the U.S. Chamber of Commerce

concerning implications for small business.

To accomplish our objectives, we met with installation and contract

officials at 10 installations to review and discuss the management of their

base operations support contracts. At seven of these locations,

commercial activities studies (A-76) had been performed in the past to

determine which functions should be contracted and which kept in-house.

We did not attempt to validate these studies; however, we discussed with

contracting officials the results of these studies and which functions were

contracted as a result of these studies. Locations we reviewed were,

Arnold Engineering Development Center, Arnold Air Force Base,

Tennessee; Laughlin Air Force Base, Texas; Vance Air Force Base,

Oklahoma; Tank-Automotive and Armaments Command, Warren and

Selfridge, Michigan; Fort Belvoir, Virginia; Fort Irwin National Training

Center, California; Naval Submarine Base Bangor and Naval Air Station

Whidbey Island, Washington; Naval Air Station Fallon, Nevada; and Naval

Air Station Whiting Field, Florida.

To determine the characteristics of multiple service contracts and the

kinds of services being procured, we reviewed the current multiple service

contract to identify the contract type, length and dates of performance,

cost, number of offerors, and contractor, and whether the contractor was

a small business. We examined the services contained in the performance

work statement to determine which were commonly included or omitted.

We discussed with contract officials these characteristics and the history

of the multiple service contract at their installation. We also discussed

with officials whether single contracts for specific services, regional

contracts for specific services, and in-house personnel were used to meet

the installations’ base operations support service requirements.

To determine what lessons were learned from past and current multiple

service contracts and whether cost and efficiency gains were documented,

we interviewed contracting officials at each of the 10 installations to find

out whether any record or history was maintained. Since we found no

formal record of lessons learned or cost and efficiency gains, we obtained

agency officials’ opinions on contracting for both current and past

multiple service contracts and contracting in general at the installation.

Officials also commented on efficiency gains they believed had resulted

from the use of multiple service contracts.

Page 23 GAO/NSIAD-98-82 Base Operations
Appendix I 

Scope and Methodology

To ascertain the implications for small businesses when multiple service

contracts are utilized, we determined the extent to which small businesses

were participating as prime contractors through discussions with

contracting officials. Further, we interviewed contracting officials to

determine the extent to which small businesses competed for these

contracts and, in the cases where a small business won the contract, the

method by which the contract was awarded. Additionally, we spoke to

officials at the Small Business Administration and the Office of Small and

Disadvantaged Business Utilization, Office of the Assistant Deputy Under

Secretary of Defense, to learn of their concerns regarding the use of single

contracts for multiple services and the implications for small business.

We conducted our review from August 1997 to February 1998 in

accordance with generally accepted government audit standards.

Page 24 GAO/NSIAD-98-82 Base Operations
Appendix II 

Selected Base Support Functions

Selected base support functions identified in the multiple service contracts

at installations reviewed.

Administrative Services

Air Conditioning and Refrigeration Plants and Systems

Aircraft Maintenance

Airfield Management

Airfield Services

Audiovisual Services

Base Information Management

Base Visual Information Services

Buildings and Structures

Central Heating Plant and Distribution System

Civil Engineering Support

Combined Bachelor Quarters Operations Services

Communications-Computer Systems

Computer System Operation and Systems Administration

Contractor Applied Technology

Custodial Services

Dining Facility Appliances and Equipment

Electrical Distribution and Emergency Generation System

Electrical Plants and Systems

Emergency Management Planning and Operation

Environmental Services

Equipment Support

Facility Engineering

Family Housing

Fire Detection and Suppression

Fire Protection Services

Food Service

Foreign Technology

Freight

Fuels Management

General Library Operations

Ground Electronics Maintenance and Services

Grounds and Surfaced Areas

Hazardous Waste or Material Management and Disposal

Heating, Air Condition, Refrigeration and Compress Air

 Vacuum System

Heating Plants and Systems

Housing Operations and Maintenance

Information Management Functions

Installation Support (Range, Airfield, Training, Support)

Janitorial Services, and Refuse Collection and Disposal

Laboratory Services

Logistics Maintenance Functions

Logistics Supply Functions

Machining and Fabrication

Maintenance, Repair, Alteration and Construction of Real

 Property

Messenger Mail

Pest Management Services

Potable Water Pump, Wells, Treatment, Storage and

 Distribution System

Precision Measurement Equipment Laboratory

Public Works Services

Purchasing

Railroads

Refuse Services

Security Services

Software Development and Maintenance

Stock Level Inventory

Storage and Warehousing

Supply Operations

Support Facility Operations, Maintenance, and Repair

Telephone Operations Services

Test Associated Services

Test Support

Training Management Systems

Transportation Services

Utilities Systems Operations and Maintenance

Vacuum Systems

Vehicles Operations and Maintenance

Waste Water Collection, Pump, Treatment and Disposal System

Page 25 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

Vance Air Force Base Vance Air Force Base is located in Enid, Oklahoma, 90 miles north of

Oklahoma City, Oklahoma. Vance is a joint undergraduate pilot training

base and home to the 71st Flying Training Wing. Vance meets the majority

of its base operations support needs with a single contract for multiple

support services and a small number of contracts for single services; some

additional services are performed by in-house personnel.

Vance currently has a single contract for multiple base operations support

services with Northrop-Grumman Technical Services, Inc., that runs from

fiscal year 1996 to fiscal year 2000. The contract is a fixed-price-incentive

contract with an award fee for 1 base year plus 4 option years and an

estimated cost of $40.2 million annually. It provides for services such as

communications, supply, civil engineering, transportation, airfield

management, and aircraft maintenance. Additionally, some morale,

welfare, and recreation functions are included in this contract. According

to contracting officials at Vance, they originally awarded a fixed-price

multiple service contract in 1960, when the training mission was

established at the base. According to contracting officials, the decision to

contract for base operations support services was part of an experiment to

determine how well and efficiently a contractor-run base could operate

compared to another base that used in-house personnel to perform the

services. In 1972, the contract was offered for a 5-year period and

Northrop-Grumman Technical Services won the contract. Four subsequent

competitions for the contract have also gone to Northrop-Grumman

Technical Services. The last solicitation had two offerors.

Vance also uses other contracts and in-house personnel to meet its base

operations support requirements. Specifically, Vance utilizes a

single-service contract for simulation instruction, simulator maintenance,

and technical support for training aircraft. Other services such as pilot

instructors, air traffic control, weather monitoring, and quality assurance

are performed by in-house personnel.

Arnold Engineering

Development Center,

Arnold Air Force Base

The Arnold Engineering Development Center at Arnold Air Force Base is

an Air Force aerospace ground environmental test center providing testing

services for the armed services, National Air and Space Administration,

both domestic and foreign commercial aerospace firms, and foreign

governments. Located in southern central Tennessee, the center has been

operated by contractors under the management of an Air Force

commander and staff since 1951. Arnold meets its needs for base

operations support by means of one contract for multiple support services

Page 26 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

and an additional service provided by in-house personnel. Additionally,

testing services, once part of the multiple support services contract, are

now provided separately in a multiple testing service contract.

The current contract is a cost-plus-award-fee contract for 5 years plus a

single 3-year option and is worth about $100 million annually. The support

contract for fiscal 1996 to fiscal 2003 was won by Aerospace Center

Support, a joint venture of Computer Sciences Corporation, DynCorp, and

General Physics. The functions included in the support contract include

central computer operations, base support and maintenance,

environmental, utilities, logistics, transportation, base security, and fire

protection. During 1949 and 1950, while Arnold was under construction, a

study for the Secretary of the Air Force was conducted by the Scientific

Advisory Board. The study, prepared in 1950, recommended that the

Arnold Engineering Development Center be operated by a non-profit

entity, preferably one sponsored by a large industrial corporation with a

variety of technical interests. After reviewing this and other reports and

information available at the time, the Secretary of the Air Force decided

that the Air Force would be best served by contracting with a for-profit

corporation to take advantage of the profit motive. To avoid conflicts of

interest, a contract provision was developed to preclude operation by

firms involved in the manufacture of hardware amenable to testing at

Arnold. The first contract was awarded in 1950 and the test center was

established 1951. The contract provided for all testing and support

services at the installation. In fiscal year 1981, the contract was separated

into two testing contracts and a single mission support contract. The

mission support contract provides most of the base operations support

services at the installation. In addition, Air Force Services (formerly,

morale, welfare, and recreation) are run by in-house Air Force personnel.

Laughlin Air Force Base Laughlin Air Force Base is a pilot training installation located in Del Rio,

Texas, 150 miles west of San Antonio, Texas. Laughlin meets its

requirements for base operations support through a single contract for

multiple support services, several contracts for specific services, and some

support services performed by in-house personnel.

Laughlin is now in its second year of a 5-year multiple-service-fixed-price

contract, which was awarded to a small business in fiscal year 1997 for

approximately $5.4 million in the base year and contains no award-fee

provision. According to contracting officials, the multiple service contract

resulted from a commercial activities study and provides supply, civil

Page 27 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

engineering operations, and transportation functions. According to a

contracting official at Laughlin, the commercial activities study was the

result of a DOD Management Review Directive and was conducted from

April 9, 1992, until July 12, 1996. The civil engineering functions include

facilities management, pest management, plumbing, and utilities, while

supply functions include such services as inventory control, computer

support, and customer service. Beginning in fiscal year 1999, vehicle

maintenance and fuels management services will become part of the

multiple service contract. According to a contracting official, this multiple

service base operating support contract was awarded to a small business

as a result of a small business set aside competition between three small

business firms.

Laughlin has other single service contracts for such functions as grounds

maintenance, custodial services, and transient alert. In-house civilians also

perform some services such as aircraft maintenance while military

personnel provide the installation security functions.

Fort Belvoir Fort Belvoir, located 18 miles southwest of Washington, D.C., provides

support services to the Military District of Washington, the National

Capitol Region, and Fort Belvoir tenants. Command of the installation was

transferred to the Military District of Washington in October 1988. The

current mission is to provide support for the growing number of tenants.

According to contract officials, Fort Belvoir meets its base operations

support needs through a single contract for multiple support services,

contracts for specific support services, and the use of in-house personnel.

Contracting officials stated that Fort Belvoir’s current multiple service

contract is fixed price for approximately $12 million annually with

DynCorp for 5 years. They stated that this is the third contract awarded

since the first one in January 1986, and there were three offerors for the

current contract. According to a Fort Belvoir official, the first contract

resulted from a commercial activities study performed in the early 1980s,

and the study was the result of a mandate by the Army’s Training and

Doctrine Command, then the Command with authority over Fort Belvoir.

Fort Belvoir’s contract includes such functions as family housing

operations and maintenance, grounds, pest control, hospital operations

and maintenance, and refuse collection.

Contracting officials at Fort Belvoir stated that Fort Belvoir uses other

contracts for specific support services such as major road repairs,

Page 28 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

asbestos removal, and custodial services. These officials also stated that

military personnel provide such services as installation security and

medical functions at the hospital, while in-house civilians provide such

services as morale, welfare, and recreation; logistics management; and

information management.

Fort Irwin Fort Irwin is located in the desert of California, approximately 150 miles

east of Los Angeles. In 1981, it was activated as the Army’s National

Training Center, with the mission of providing realistic joint and combined

arms training focused on developing soldiers, leaders, and Army units on

the battlefield. Fort Irwin meets its base operations support needs through

the use of two multiple service contracts, several contracts for specific

support services, one Army-wide contract, and in-house personnel.

When the decision was made to activate Fort Irwin as the National

Training Center in 1981, a commercial activities study was conducted to

determine whether a contract or in-house operation was more costeffective. The study results demonstrated that a contract operation was

more cost-effective and a cost-plus-fixed-fee contract was awarded in

fiscal 1982. This contract was recompeted three times. A cost-type

contract was used because requirements could not be precisely estimated.

In Fort Irwin’s case, the base had been reactivated and there were no

existing personnel operations on-site.

During an extensive Forces Command review in the early 1990s, it was

determined that the size and complexity of the contract had become

cumbersome and in some cases not responsive to the installation’s needs.

This led to a May 1994 study to determine the most efficient and effective

configuration to support the mission. As a result, Fort Irwin divided the

multiple service contract into five separate contracts, two multiple service

contracts, and three single function contracts for the 1996 resolicitation.

The major portion of the existing multiple service contract was split into

two cost-plus-award-fee contracts, one for installation support services

and the other for logistics support. They were valued at approximately

$14.2 million and $35.3 million, respectively. The logistics support contract

provides services for tactical and nontactical vehicle maintenance, supply

including ammunition, central receiving, and storage/issue/turn-in to name

a few. The installation support contract provides a wide range of services

such as public works, range, airfield, training support, community

activities (morale, welfare, and recreation), and provost marshal. The

Page 29 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

other three were fixed-price contracts for custodial services, food

services, and indefinite quantity work, respectively.

Although contracts are used to meet most base support service needs,

in-house personnel perform some support functions. Examples of the

services provided in-house include cooking, child development services,

technical services, supply services, and training support. Additionally,

during the breakup of Fort Irwin’s contract, the Army Medical Command

decided to take over contracting of the medical support

functions—hospital housekeeping and biomedical maintenance. These

functions were contracted out Army-wide by the Army Medical Command.

U.S. Army

Tank-Automotive and

Armaments Command,

Warren and Selfridge

Both Warren and Selfridge support activities are under the command of

the U.S. Army Tank-Automotive and Armaments Command with Warren

being the home of the Command. These activities are located 20 miles

apart and 5 miles from Detroit Michigan. The Tank-Automotive and

Armaments Command’s mission is to field and support mobility and

armament systems. Selfridge is one of these centers and also directs

programs that provide support services at Selfridge for personnel and

dependents in such areas as housing, morale, safety, environmental and

recreational services. The activities’ base operations support needs are

met through the use of one contract for multiple services, several

contracts for specific support services, and in-house personnel.

As a result of separate commercial activities studies conducted

approximately 18 years ago, two contracts for multiple support services

were awarded. One contract supported Warren, the other Selfridge.

However, in 1989, a decision was made that it would be in the best interest

of the government to combine these two contracts into a single cost-type

contract as a means to reduce overhead and contract administration cost.

The current contract was awarded to Serv-Air, Inc., for about $15 million

annually for 5 years, from fiscal years 1994 through 1998. This contract

includes such services as supply, warehousing, audiovisual, facility

engineering, family housing, and administrative services to support the

operations of both activities.

Contracting officials told us that due to existing contracts at the Warren

activity, the custodial and refuse collection services are performed there

under separate single function contracts. In-house personnel handle

functions such as community family services, engineering and technical

Page 30 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

services, resource management, information technology, provost marshall,

and public affairs services.

Naval Submarine Base

Bangor

Naval Submarine Base Bangor is a fully operational shore activity selected

as the West Coast Trident submarine base. It is home to 9 nuclear

submarines and 54 tenant commands. Bangor is located on the western

side of the Puget Sound, outside of Seattle, Washington. Its mission is to

provide support to the Trident submarine launched ballistic missile

system, maintain and operate facilities for administration and personnel

support for operations of the submarine force, and provide logistic

support to other activities in the area, and other functions as may be

directed by competent authority. Bangor meets its base support needs

primarily through a single contract for multiple support services. In

addition, Bangor has several contracts for specific services, and utilizes

in-house personnel for others.

According to a Bangor official, Bangor has contracted for base operations

services, since it was activated as a Naval Submarine Base in 1976.

Officials stated that it was determined a contract operation would be more

cost-effective, based on the results of a commercial firm’s study of all the

base tenants and operations. The original contract was a 1-year costplus-incentive-fee contract. The current contract is a fixed-price-award-fee

contract awarded to Johnson Controls World Services, Inc., for a base

price of about $40 million annually. It also includes a provision for the

contractor to meet ISO 9000 standards to better ensure they can meet

customer requirements and help reduce contract monitoring costs. The

term of this contract is 10 years from October 1997 through

September 2007. It provides a wide range of base support services,

including administrative support, various public works services, utility and

supply services, and security services. Contract officials stated the current

contract was resolicited for a 10-year period in an effort to attract

competition and save money over the life of the contract. Despite this

change, there was only one offeror for the contract. Officials stated that

due to the current contractors success in collecting a large portion of the

maximum possible award fee, other firms did not think that their chances

of winning the contract outweighed the cost of preparing a solicitation.

Except for the initial contract, the other four solicitations were for 5-year

periods each.

Bangor has several individual contracts to meet the needs of base

operations support functions, such as architect engineering services,

Page 31 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

electronic and communications equipment, animal control, recreational

library services, and maintenance of automated data processing

equipment. Also, Bangor provides such services as morale, welfare, and

recreation; family services; food preparation and administration; and crane

inspection and certification through the use of in-house personnel.

Naval Air Station Whidbey

Island

Naval Air Station Whidbey Island is located on Whidbey Island in the

Puget Sound, Washington. The base mission is to provide the highest

quality facilities, services, and products to the naval aviation community

and all organizations utilizing the air station. According to contract

officials, Whidbey Island meets its needs for base operations support

through a single contract for multiple support services, several single

contracts for specific services, and the use of in-house personnel.

The current fixed-price-award-fee contract was awarded for fiscal

years 1997 through 2001 for approximately $15.3 million annually. The

contract was negotiated on a sole-source basis with the Small Business

Administration pursuant to the 8(a) program with services provided by

Chugach Development Corporation. Functions include such services as

family housing maintenance, refuse collection, supply operations, grounds

and pest control, and utilities services. The current multiple service

contract is the third 5-year contract awarded by Whidbey Island. The first

contract was awarded in fiscal 1987 as the result of a commercial activities

study.

Although the multiple service contract provides for a large portion of

Whidbey Island’s base operations needs, contracts for specific functions

and in-house personnel are also used. Such services as morale, welfare,

and recreation; environmental services; aircraft operations; public works

engineering; and housing are provided for through the use of in-house

personnel. Other services such as janitorial, grounds, indefinite order

work for paving, painting, and roofing are provided under single contracts

for specific services.

Naval Air Station Whiting

Field

Naval Air Station Whiting Field is located approximately 33 miles

northeast of Pensacola, Florida, near the city of Milton. The activity

includes two major landing fields and is home station of Training Air Wing

Five, which consists of three fixed-wing pilot training squadrons and two

helicopter pilot training squadrons. In addition, the activity maintains

13 outlying fields in support of the pilot training mission. Whiting Field

Page 32 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

meets its needs for base operations support through a single contract for

multiple support services, several contracts for specific services, and the

use of in-house personnel.

The current multiple service contract with Tumpane Services Corporation

was awarded for approximately $6.6 million in the base year to a small

business under the set-aside program. This fixed-price-award-fee contract

covering fiscal years 1997 through 2001 was awarded pursuant to a bestvalue selection process. Functions in the contract include waste water

treatment, pest control, grounds maintenance, hazardous materials

management, communications systems, transportation, and utilities

services. The first contract was awarded in fiscal year 1983 for a 3-year

period as the result of a commercial activities study. Since fiscal year 1985,

the contract has been recompeted three times, and each time it was

awarded to a small business.

In addition to the multiple service contract, Whiting Field uses single

contracts and in-house personnel to provide base operations support.

Services such as morale, welfare, and recreation; fire protection; supply

services; ground electronics; and child development are provided through

the use of in-house personnel. Other functions such as custodial, military

family housing maintenance and repair, aircraft maintenance, and

simulation are provided under single service contracts.

Naval Air Station Fallon Naval Air Station Fallon, located 60 miles east of Reno, Nevada, is an

air-to-air training facility for naval pilots. According to contract officials,

Fallon uses a single contract for multiple support services to provide for a

large portion of its base operations support needs, in addition to in-house

personnel and some contracts for specific services.

The current multiple service contract was awarded to Day-Zimmerman on

a fixed-price-award-fee basis and is worth about $15 million annually. The

contract covers fiscal years 1998 through 2002. The current contract is the

third 5-year contract awarded, with each having a single base year and

four individual option years. According to a contracting official at Fallon,

the decision to contract for base operations support services at Fallon was

the result of a commercial activities study conducted from May 1981 until

January 1984. According to this official, the impetus for the study was the

desire on the part of the administration of the time to privatize commercial

activities at military installations. Contracting officials told us that the first

contract was awarded in November 1987 for fiscal year 1988. Some of the

Page 33 GAO/NSIAD-98-82 Base Operations
Appendix III 

Multiple Service Contract History for

Military Installations Reviewed

base operations support services provided for in the multiple service

contract include operating combined bachelors quarters, public works,

custodial, airfield management, pest management, transportation, food

services, supply, and housing operations.

According to contracting officials, in-house personnel provide such

functions as locksmith and most of the morale, welfare, and recreation

services. These officials stated that contracts for specific services are used

to provide such functions as grounds maintenance, fuels handling, aircraft

maintenance, and minor construction.

(709282) Page 34 GAO/NSIAD-98-82 Base Operations
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