GAO: Contracts for support of
Balkans mission cost too muchBy Gregory Piatt
Bosnia bureau
EAGLE BASE, Bosnia and Herzegovina — Two Brown & Root Services crews gathered here last week to work on a two-walled structure where soldiers hold formations. The first crew of four installed a light fixture while the second crew of four waited a half hour for a colleague to bring a piece of plywood.
As they waited, three stood, smoked cigarettes and talked. The fourth member listened as he pulled the trigger on a drill to spin a piece of wood on the end of the bit like a propeller.
Their colleague finally arrived with the plywood and nailed it to the structure. Then the second crew gathered up its tools and left.
Overstaffing construction projects paid for by the federal government is just one problem pointed out in a General Accounting Office report released last month. Overall, the report states that the Pentagon is spending too much on private contracts to support its troops in the Balkans.
And much of that expense comes because Brown & Root has too much leeway in providing services to troops serving in Bosnia, Kosovo, Hungary and Macedonia, with its employees often sitting around with little to do, the report states.
For example, government auditors, who conducted their investigation between July 1999 and September 2000, said the Army’s Bosnia engineer brigade commander complained that Brown & Root’s construction crews were observed to be overstaffed at 85 percent of their projects.
But as the Army has increasingly relied on contractors rather than soldiers to provide some services, the Pentagon has spent more than $13.8 billion on its Balkans operations since 1995, the report estimates.
Of this, about $2.2 billion has been paid to Brown & Root, which feeds the troops, washes their uniforms, provides logistical support such as transportation, repairs buildings and has built base camps in Bosnia, Kosovo, Albania, Hungary and Macedonia.
Although the GAO states that the Army and Brown & Root have taken various actions to control costs, auditors also said more cost-cutting is needed. They recommended a high-level examination of the level and frequency of contracted services throughout the Balkans, where the U.S. military has more than 11,000 troops.
"While we recognize the importance of quickly deploying and properly caring for U.S. personnel in the Balkans, we believe that more consideration could be given to costs," said the report by GAO, Congress’ investigative arm.
Brown & Root’s Operations Coordinator in Bosnia, Ian Dolan, declined to comment on the GAO report. He also refused permission to talk to any of the company’s employees in Bosnia and referred questions to Brown & Root’s parent company, Dallas-based Halliburton Co. Halliburton’s Global Public Relations Manager Wendy Hall never returned repeated Stars and Stripes’ calls.
Officials from U.S. Army Europe and the Army Corps of Engineers, the unit that signed the contract, concur with the GAO’s findings. They say they can always do better at cutting costs and administering contracts.
Alan I. Moses, USAREUR’s Program Manager for Plans and Operations Division, Operations Branch and Sustainment Section, said the process of monitoring Brown & Root’s Balkan Support Contract is one that is constantly evolving.
"We are always looking at it, revising it and fine-tuning it," Moses said in a telephone interview from Heidelberg, Germany. "But we can always do better."
That fine-tuning was noted in the report, which recommends: a contract provision: requiring Brown & Root to regularly identify cost savings, recycling materials from elsewhere in the Balkans and Europe, and using soldiers to perform tasks such as building construction whenever possible.
The report said the Army needed to watch the level and efficiency of recurring services that Brown & Root provides. In July, the Army directed that a quarterly review be conducted to assess whether all the services it receives under the contract are still needed.
Moses said he has stressed that each task force in the Balkans review all recurring services such as food service, maintenance, construction, cleanup, and logistics and transportation on a quarterly basis.
"Informal feedback indicates that task forces Falcon [in Kosovo] and Eagle [in Bosnia] are conducting such a review," Moses said. "As the mission unfolds and ground conditions change, standards of recurring services can and should change."
Lt. Col. Kevin Aven, chief of staff of logistics for the 3rd Infantry Division, which now commands the mission in Bosnia, said it is establishing a comprehensive review of recurring services.
"This review will allow the command group to review all services and determine where efficiencies are available and redirect dollars to other projects," Aven said.
Aven’s counterpart in Kosovo, Lt. Col. John Tartala, assistant chief of staff for logistics, said they are drafting a plan to systematically review every service provided by Brown & Root on a quarterly basis. In Kosovo, a management council of the chief of staff, the task force engineer and contracting officials will begin reviewing these services during the first quarter of this fiscal year, Tartala said.
"The council will review recurring services such as janitorial, maintenance, shuttle bus, supply support and road repair services," Tartala said "This organization’s charter is to analyze and reduce or eliminate redundant or unnecessary recurring services in Task Force Falcon."
Under the contract there are several levels of oversight, including USAREUR, the Defense Contract Management Agency, the Defense Contract Audit Agency and command staffs at both peacekeeping missions in the Balkans.
At the USAREUR level, Moses said the Army holds a planning conference three times a year to work on administering the contract. "With all the major players present, we review the successes, the processes and lingering problem areas," Moses said. "I acknowledge that the process will never achieve perfection."
Under the contract, the Army pays Brown & Root allowable direct costs, plus a base fee of 1 percent of the estimated contract cost, overhead, administrative costs and an award fee of up to 8 percent for each contract period, based on performance.
"We gain the contractor’s attention and motivate him as the award fee process rewards the contractor with extra profit for earned service to the government," Moses said.
Looking at past records, Brown & Root has done a remarkable job, according to the contract awards. The Army has granted Brown & Root the full award fee for five award periods, 99 percent for two and 98 percent for one period, the GAO said.
The GAO report cited that much of the cost problems result from contract oversight at the task force level in the Balkans because contracting officers and other command officials weren’t familiar with cost reimbursement and performance-based contracts and what their level of control is under these contracts. They also said once these officials became familiar their tour of duty was ending.
Realizing this problem prior to the report being issued, the Army began training these officials in this type of contract before they deployed to the Balkans. This training began with the 49th Armored Division’s deployment to Bosnia earlier this year. Tartala said that prior to arriving in Kosovo, the contracting team received a week of pre-deployment training that includes briefings and discussion with acquisition personnel that have served in the Balkans.
In addition, all contracting officers receive three days of pre-deployment acquisition training in the States with Brown & Root and supporting government agencies, and three days of pre-deployment training in Wiesbaden, Germany, prior to going to Kosovo, Tartala said.
"Task Force Eagle personnel received more training than the previous rotations, but there is still much work to be done in this area," Aven said. "Some of the key leaders have received a portion of this additional training, but there are many soldiers who are performance evaluators of the contract who have not received this training."
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