Contingency Operations: Army Should Do More to Control Contract Cost in the Balkans

Highlights

Pursuant to a congressional request, GAO reviewed Army's efforts to control the costs of its Balkans Support Contract, focusing on whether: (1) the Army is taking effective actions to contain costs; and (2) improvements are needed in how the Army and other Department of Defense (DOD) agencies involved in Balkan operations manage activities under the primary Balkan contract.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Defense	To better control costs and improve administration of the Balkans Support Contract, the Secretary of Defense should direct the Secretary of the Army to direct the Commanding General, U.S. Army Europe, to: (1) examine the level and frequency of services being provided and assess the economy and efficiency with which they are being provided as part of the newly-directed quarterly review of recurring services under the Balkans Support Contract; (2) seek the participation of the Defense Contract Management Agency and the Defense Contract Audit Agency in these reviews; and (3) set a target date for completing base operation standards for contractor-provided services and use these standards in the quarterly reviews.	Closed – Implemented The Defense Contract Management Agency (DCMA) is conducting monthly reviews of contractor provided services. Defense Contract Auditing Agency (DCAA) auditors are accompanying administrative teams that deploy to the Balkans. DCMA and DCAA are working in concert to enhance in-theater cost monitoring. The Army has established base operations standards.
Department of Defense	To better control costs and improve administration of the Balkans Support Contracts, the Secretary of Defense should direct the Secretary of the Army to direct a more extensive predeployment training program for all contract oversight personnel to include: (1) the fundamentals of cost reimbursement performance-based contracting; and (2) the government's authority and responsibilities under the contract.	Closed – Implemented DOD has undertaken the necessary remedial action, including pre-deployment training on the government's authority and responsibility when administering a performance-based contract and practical exercises based on real world scenarios.
Department of Defense	The Secretary of Defense should direct both the Secretary of the Army and the Director, Defense Contract Management Agency, to provide greater continuity in managing the Balkans Support Contract by scheduling rotations so that key contracting personnel, such as administrative contracting officers, rotate at different times and by considering the feasibility of a more permanent core of civilian contract administrators.	Closed – Implemented The Defense Contract Management Agency is working to ensure that its personnel rotations have greater continuity with units deployed in the Balkans.

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Government Operations

Armed forces abroadContract costsContract oversightContingency operationsContract performanceDefense contingency planningDepartment of Defense contractorsInternal controlsLogisticsMilitary cost control