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 Army’s latest revised estimate of $461.5 million exceeds its initial estimate of $350.2 million by $111.3 million, or 32 percent. 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. Estimated costs for troop housing and facilities rose from an original estimate of $56.5 million to $150.4 million. 1 for U.S. base camps in the Balkan peninsula.) 2.) 3.) This cost function increases as estimated contract costs increase. 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. 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 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. 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. 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. 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. 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. However, the programs may result in unnecessary duplication and costs. 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. 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.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Army's Logistics Civil Augmentation Program (LOGCAP), focusing on: (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; (3) opportunities to improve program implementation from a doctrine, cost control, and contract oversight standpoint; (4) the use of LOGCAP in Somalia, Rwanda, and Haiti; and (5) the potential for inefficiency by having similar support contract programs in the Navy and the Air Force.

What GAO Found

GAO found that: (1) 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; (2) 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; (3) 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; (4) 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; (5) LOGCAP cost estimates for the Bosnian mission have increased substantially; (6) the Army's latest revised estimate of $461.5 million exceeds its original estimate of $350.2 million by $111.3 million or 32 percent; (7) GAO's review shows that the difference in the estimates was largely driven by changes in operational requirements once the forces arrived in the Balkan peninsula; (8) weaknesses in financial reporting and contract monitoring systems also contributed to cost increases; (9) GAO's analysis of LOGCAP implementation during the Bosnian peacekeeping mission shows that there are opportunities to make the program more efficient and effective; (10) little doctrine on how to manage contractor resources and effectively integrate them with force structure units exists; (11) 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; (12) Army Materiel Command 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; and (13) the Air Force and the Navy recently initiated programs similar to LOGCAP, which may result in unnecessary overhead costs and duplication.