Military Operations:

DOD's Extensive Use of Logistics Support Contracts Requires Strengthened Oversight

GAO-04-854: Published: Jul 19, 2004. Publicly Released: Jul 21, 2004.

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In its contingency operations since the early 1990s, the Department of Defense (DOD) has relied extensively on logistics support contractors to provide many of the supplies and services needed by deployed U.S. forces. As requested, GAO assessed DOD's planning in its use of logistics support contracts in contingency operations; determined whether DOD has had contract oversight processes that are adequate to ensure that quality services were provided in an economical and efficient manner; and assessed the extent to which DOD provided trained personnel qualified to oversee its contractors. GAO focused its efforts on four logistics support contracts chosen because of their size and chosen to represent more than one military service--the Army's Logistics Civil Augmentation Program (LOGCAP) and Balkans Support Contract, the Navy's Construction Capabilities Augmentation Program, and the Air Force's Contract Augmentation Program.

The effectiveness of DOD's planning to use the logistics support contracts during contingency operations varies widely between the commands that use them and the contracts themselves. In many cases, planning was done effectively, in close coordination with the respective contractors. For LOGCAP, however, the Army Central Command did not develop plans to use the contract to support its military forces in Iraq until May 2003, even though Army's LOGCAP guidance calls for early planning and early involvement of the contractor. Those plans, moreover, have undergone numerous changes since that initial planning. In Kuwait, as well, the Army has made frequent changes in its use of LOGCAP. DOD's contract oversight processes were generally good, although there is room for improvement. DOD customers have not always ensured that contractors provide services in an economic and efficient manner, although they have a responsibility to do so. We have found that when the customer reviews the contractor's work for economy and efficiency, savings are realized. Under the LOGCAP contract, months-long delays in definitizing contract task orders have frequently undermined the contractor's cost-control incentives, and the absence of an Army award fee board to comprehensively evaluate the contractor's performance has further limited DOD's oversight. DOD did not have sufficient numbers of trained personnel in place to provide effective oversight of its logistics support contractors. The Army has deployed units responsible for supporting the LOGCAP contract, but some of the personnel have little knowledge of the contract. The Air Force did not consistently train evaluators to monitor its logistics support contractor's performance. Military units across the services receiving contractor support have lacked a comprehensive understanding of their roles and responsibilities, which include establishing the work to be done by contractors and monitoring contractors' performance.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: DOD agreed with this recommendation but has taken no action as of 10/06. GAO continues to believe that a lessons learned program is important and is making a similar recommendation in an upcoming report (GAO-07-145) which will be issued in December 2006.

    Recommendation: To promote better planning, improve oversight, and improve efficiency when using logistics support contracts to support military operations, the Secretary of Defense should implement a department-wide lessons learned program that will capture the experiences of others who have used logistics support contracts. This system should include lessons learned from operations as well as lessons learned and best practices documented by DOD's audit agencies.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: DOD has recently revised its guidance on use of contractors to support deployed forces but did include a requirement to implement this recommendation. DOD has no plans to include the use of teams of subject matter experts in its guidance.

    Recommendation: To promote better planning, improve oversight, and improve efficiency when using logistics support contracts to support military operations, the Secretary of Defense should direct the service secretaries to establish teams of subject matter experts who will periodically travel to locations where contractor services are being provided by logistics support contracts to evaluate and make recommendations on (1) the appropriateness of the services being provided, (2) the level of services being provided, and (3) the economy and efficiency with which the services are being provided.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: The Department is currently developing policies and doctrine which will improve the planning for and the use of logistic support contracts. The policies, which were mandated by Congress in the 2007 NDAA require that combatant commanders included contract support requirements in their operational plans. In addition, DOD has provided the commanders with additional planning staff to, among other things,determine which logistics support contract will be used. In addition, the planners will work with the combatant commanders and the contractors to develop and write the statement of work.

    Recommendation: To promote better planning, improve oversight, and improve efficiency when using logistics support contracts to support military operations, the Secretary of Defense should emphasize to the heads of DOD components the need to comply with guidance to identify operational requirements that are to be provided by contractors early in the planning process and involve the contractor in the planning, where practicable. If security concerns prevent the involvement of the contractor, the Secretary of Defense should direct that unclassified statements of work be developed and provided to the contractor.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: DOD agreed with this recommendation but has not taken any action on it. Because we continue to believe that developing a training program for commanders and other senior leaders we are making a similar recommendation regarding training in a report (GAO-07-145) which will be issued in December 2006.

    Recommendation: To promote better planning, improve oversight, and improve efficiency when using logistics support contracts to support military operations, the Secretary of Defense should develop and implement training courses for commanding officers and other senior leaders who are deploying to locations with contractor support. Such training should provide information on the role of commanders and others in the contracting process. Specifically, the training should provide instruction on (1) developing and documenting requirements, (2) ensuring that contractors perform in a cost-effective manner, and (3) assessing contractors' performance. The training should also include information on the limits of commanders' authority vis-a-vis contractors and include information on the roles and responsibilities of DCMA and other oversight agencies.

    Agency Affected: Department of Defense

 

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