by David L. Young
No one knows better than I the tremendous work that Brown and Root has done in Somalia. The flexibility and competence demonstrated by your employees were key factors in allowing U.S. forces to transition logistical support to the UN. . . .
The battlefields of the future will be distinctly different from those of the past. Soldiers, sailors, marines, and airmen will have more advanced weapon systems, greater access to information, and increased quality of life. They also will share the battlefield with a greater number of civilians. The increased civilian presence will result from growing reliance on Department of Defense (DOD) civilian employees and contractors to perform combat support and combat service support (CS and CSS) functions. But a greater role for civilians raises an important question: How do we integrate contractors into the commander's operation plan (OPLAN)? The success of contractors on the battlefield requires cooperation, support, and advance planning from the joint force commander's (JFC's) staff.
Contractors typically are used to provide life support, weapon systems support, and other technical services. The common denominator in all of these efforts is that contractors are asked to provide direct support to our military forces worldwide, including those in forward-deployed locations. The JFC does not have the option of going to war (or a military operation other than war) with an all-military team. Someone must plan for the integration of civilian assets into the total force structure. Problems in past planning efforts are typified by the General Accounting Office (GAO) report on Bosnia—
Despite significant efforts to effectively manage LOGCAP [Logistics Civil Augmentation Program], U.S. Army, Europe Officials' inexperience and lack of understanding of the contract, the contractor's capabilities, and program management created problems during deployment and resulted in unnecessary costs.
An OPLAN that includes contractor support should answer such questions as—
· Will the operational environment permit the use of contractors? If so, when?
· What are the host nation's restrictions on the use of contractors?
· How will support be provided to the contractors, in such areas as force protection, timing and means of deployment, life support (food, lodging, and medical care), and facilities?
· How will command and control be exercised? What organization will administer the contracts? To what extent will contractors be integrated into the force?
· How will the operational-level budget for supporting contractors be administered?
The Operational Environment
The Army describes the operational environment in terms of METT-T: mission, enemy, terrain, troops, and time. The initial plan for the invasion of Haiti called for a forced entry, and the planners were told that no civilians would be allowed into the theater until after the shooting stopped. Fortunately, the METT-T factors changed. The operational environment supported permissive entry, and contractors went ashore soon after the troops. Planners must weigh the likelihood that contractors will not be allowed (or will not be able) to enter the theater at the start of a major operation. The military forces may be required to be self-sustaining for a period of time. It should be noted, however, that the LOGCAP contractor entered Somalia, Rwanda, Haiti, and Bosnia only days after the first U.S. troops deployed.
Peacetime preparation is vital to using contractors successfully. The commander must know the contractor's reliability before deployment. One of the advantages of a contract like LOGCAP is that it lasts for 5 years (if all option years are exercised), so the commander in chief's (CINC's) planning staff can get to know the contractors during deliberate planning and exercises. Contracts awarded during crises are much riskier than those that are carefully planned and developed before a deployment. It is better to include a "deployment clause" in a systems maintenance contract at the time the contract is awarded rather than add the requirement in the midst of a crisis. DOD Instruction 3020.37, Continuation of Essential Contractor Services During Crises, provides a checklist of planning considerations for deployment of civilian contractors. The question of whether or not the operational environment will be conducive to using contractors largely depends on the contractor's state of readiness.
Relationships With the Host Nation
Permission to enter the country and conduct business. There were no functioning host governments to deal with when the LOGCAP contractor was deployed to Somalia, Rwanda, and Haiti. (The latter had a government, but it was largely nonoperational). Operation Joint Endeavor in Bosnia, for which a large logistics base was planned in neighboring Hungary, was a very different situation. The logistics planners suggested that U.S. contractors, especially the LOGCAP contractor, be included in the omnibus agreement (similar to a status of forces agreement) with the Government of Hungary. The suggestion was rejected; some members of the negotiating team incorrectly believed that the U.S. Government should not get involved in the contractor's relationship with the host government, that this was something the contractor should work out on his own. Because there was no formal agreement, the contractor had difficulty gaining permission to bring outside labor into Hungary. The Hungarian Government capitulated only after receiving assurances that a large portion of the contractor's work force would be Hungarian.
Liability for host nation taxes. Further problems developed when the Hungarian Ministry of Finance ruled that the LOGCAP contractor was subject to the value-added tax (a type of corporate income tax) and that the contractor's employees were subject to Hungarian income tax. The U.S. Government countered with the argument that LOGCAP is a U.S. Government cost-reimbursement contract and that costs were simply passed through the contractor to the U.S. Government. The omnibus agreement excused the U.S. Government from all Hungarian taxes. That argument fell on deaf ears, and Brown & Root Services Corporation (then the LOGCAP contractor) paid over $18 million dollars in taxes, for which it was reimbursed by the U.S. Government. The money eventually was recovered after the Hungarian Government agreed to amend the omnibus agreement.
Other government permits. Additional challenges included requirements to obtain permits for everything from minor construction to operating washracks. In summary, the contractor was not permitted to operate with the same freedom as a U.S. military unit would have been and was left on his own to negotiate many issues with the host government. The U.S. Government was in a better position to negotiate for the contractor and had a legal, financial, and operational interest in doing so. A contractor's success in supporting U.S. forces depends heavily on the synergistic relationship between the contractor's staff and the JFC's staff.
Support for Contractors
The first challenge for the planner in preparing for contractors on the battlefield may be a conceptual one: what is the JFC's responsibility to civilian contractors? The JFC may be required to provide only limited support to host nation contractors, but the situation is far different for contractors brought in with the force from the continental United States. The U.S. Government assumes greater responsibility for the contractors it brings into the theater.
Force protection. The Government's responsibility for providing force protection to contractors derives from three factors: a legal responsibility to provide a safe workplace, a contractual responsibility that is stipulated in most contracts, and a practical responsibility to help contractors to do their job. The threat level in Somalia was such that the LOGCAP contractor required a military escort nearly all the time; at various times, as many as 12 to 18 marines or soldiers were assigned to escort duty. In contrast, the LOGCAP contractor travels nearly 1 million miles a month on the open roads of Bosnia, Croatia, and Hungary, and for the most part without the benefit of any force protection. The contractor practices good threat awareness and joins with military convoys where possible, but many times his employees travel alone and unprotected. The lesson for the planner is that force protection must be part of the deliberate plan and include the flexibility to respond to a situation as it develops. The contractor may require constant force protection (the Somalia model) or limited support (the Bosnia model).
Getting contractors into the theater. It is generally wise to write contracts so that contractors are required to be self-sufficient in their operations. Contractors with a large work force and a lot of equipment to transport can charter their own aircraft or surface vessels and not compete with U.S. forces for strategic lift. The decision, however, is not always simple. If contractors are required to provide their own transportation, the Government will certainly pay for it under the terms of the contracts. Planners also must consider the availability of debarkation space at the airport or dock. Whether contractors flow through the time-phased force and deployment data (TPFDD) system on Government transportation or are told to find their own ride, they must be provided space to disembark in the theater.
Food, lodging, and medical support for contractors. As with transportation, the contractor can be directed to provide for his own life support, or the Government can provide it. It generally is less expensive for the Government to provide these services to contractors than to have them purchase their own. Regardless of contract type (fixed price or cost reimbursement), it is feasible and legal for the Government to provide meals, lodging, and medical care to contractors in a theater of operations. However, provision of medical care can present significant challenges. DOD Instruction 3020.37 states that "civilian contractors in a theater of operations are entitled to the same medical care as military personnel." The JFC may lack the facilities to provide medical care to a large number of contractor employees if the issue has not been addressed in the logistics support plan.
Real estate facilities for contractors. Where will the contractors set up shop in the theater? What are their requirements for work space? Will they need facilities in a secured area, such as inside a military compound? Contractors can be directed to find their own facilities and, if necessary, hire guard services to protect those facilities. The planner should be concerned with cost, physical protection requirements, and coordination of the contractor's requirements with the military's requirements. This last factor is often overlooked. In an area where facilities are limited, contractors may be competing with the military for space. It may be desirable to require contractors to get U.S. Government permission before entering into real estate leases. The Joint Acquisition Review Board normally will make these decisions once it has been established in the theater.
Command and Control
With 9,000 contractor personnel deployed in support of Operation Desert Storm, it was a good thing the war was short-lived. Command and control of so many contractors could have posed real problems. Though a situation like that may seem daunting, several organizations are available to support the JFC in administering contracts.
Joint Acquisition Review Board (JARB). The JARB concept is not entirely new, but it was refined and used with notable success in Operations Joint Endeavor and Joint Guard in Bosnia. The JARB's purpose is to review and monitor all contracting activity in a theater to promote efficiency and cost effectiveness. Contracting officers supporting the Gulf War sometimes competed with each other for scarce resources (such as vehicles), which resulted in higher prices and less efficient allocation. All acquisitions in the Bosnian theater above a specified threshold are reviewed by the JARB to determine four things: is it a valid military requirement? Can the requirement be satisfied with organic (military) assets? Should the requirement be met through contracting? What is the cost impact? Most actions referred to the JARB are for life support services for which the JFC has budgetary responsibility. The membership of a JARB consists of the senior logistics officer (the J4, usually represented by the senior contracting officer) and representatives of the user commands (the customers), the Army Materiel Command (AMC), and the Defense Contract Management Command.
Principal Assistant Responsible for Contracting (PARC). Joint doctrine for contracting has not been fully developed, so, unfortunately, contracting is being conducted in an ad hoc fashion. For that reason, it will be helpful to use an Army term (PARC) to designate a position that should be created in a theater. (For the purposes of this discussion, recognize that in a joint environment this billet could be filled by any of the Services and that the title of the position may be different.) The legal authority to award contracts flows from Congress through designated lines of authority. The PARC is a contracting professional (part of the Army Acquisition Corps) designated by the JFC to represent him in contracting matters. The PARC usually chairs the JARB.
AMC's logistics support element. AMC has a logistics support element designated for each CINC's area of responsibility. If LOGCAP is used, AMC will deploy a program management team known as "Team LOGCAP" to provide onsite program management.
Defense Contract Management Command (DCMC). DCMC is a subordinate command of the Defense Logistics Agency (DLA), which is designated a combat support agency. DLA deploys a DLA contingency support team to act as the agency's single point of contact with the JFC. Contract administration is one functional element of the total team. DCMC's mission is to provide post-award administration of DOD contracts. In this role, DCMC conducts onsite monitoring of the contractor's activities to ensure that the contractor complies with the terms of the contract. Although the JFC's planning staff may invite DCMC into the theater, their legal authority to operate must be established through a contract delegation from the procuring contracting officer who issued the contract. DCMC administered the LOGCAP contract on behalf of the Army Corps of Engineers in Somalia, Rwanda, Haiti, and Bosnia.
Army Corps of Engineers. The Corps of Engineers Transatlantic Programs Center developed the original LOGCAP contract in 1992 and managed the effort until AMC assumed responsibility in October 1997. The Corps continues to provide program management of the Operation Joint Forge sustainment contract, the successor to LOGCAP in Bosnia. Although the Corps' primary focus is construction, they have indepth knowledge of services and support contracting in the contingency environment.
Contractor integration into the force. The extent to which contractor personnel are integrated into the force must be decided by the JFC based on the advice of staff counsel and lessons learned. There are some recurring issues. Should contractors be issued battledress uniforms? Should they be required to follow force protection rules (including travel restrictions)? Should they be required to live on post? Should they be required to follow general orders with regard to use of alcohol? These issues are best settled by mutual agreement between the Government and each contractor before deployment. Except by mutual consent (contractual agreement), contractors are not subject to general orders or other policies designed for good order and discipline among the troops.
Operational Level Budgeting
Budgeting for life-support contractors, such as the LOGCAP contractor, has long been a problem. The costs normally are borne by the Service component with lead responsibility for common-user logistics in the hope that reimbursement may come through a supplemental appropriation from Congress. U.S. Army, Europe (USAREUR), has primary responsibility for managing LOGCAP costs for the Bosnia deployment (which topped $459 million in the first year alone).
Although the Logistics Management Institute and GAO found LOGCAP to be a cost-effective method of providing CSS, GAO expressed serious concerns about the Army's ability to control and report costs effectively. By the end of the first year of LOGCAP in Bosnia, USAREUR had developed the necessary cost-reporting systems to overcome earlier criticisms. However, the Army Audit Agency and GAO believe that most CINC and JFC staffs lack the expertise to manage a contract of that size. The apparent solution is for the JFC to assemble a professional contract management cadre, including financial experts, to augment the operational staff. DCMC can provide invaluable assistance to the JFC in monitoring contractor costs.
Contractors are a valuable asset to the JFC. Planning is necessary, however, to capitalize on their strengths and minimize the potential for disruption. Although joint doctrine for contracting is not fully developed, there is a growing body of information available. While one might desire a simple checklist that would cover all possible considerations, the subject is far too complex. A few guidelines might prove helpful.
Maintain organizational simplicity and unity of command. Develop a simple organizational structure with unity of command over Government personnel responsible for contract administration. By using the services of AMC, DCMC, and the Army Corps of Engineers to manage contracts, the JFC can consolidate oversight functions, reduce duplication of effort, and reduce the number of support personnel required in the theater. For example, personnel from all three commands joined to form the Joint Logistics Support Command in Haiti. Such arrangements offer unity of effort while permitting the different organizations to align with their parent commands for contracting authority.
Minimize the number of contractors. Obviously, one contractor with several thousand employees is easier to manage than a hundred small contractors with a few employees each. Strong consideration should be given to employing one major contractor, such as LOGCAP or AFCAP (Air Force Contract Augmentation Program—similar to LOGCAP), to provide all common-user logistics support.
Include the contract management team and key contractors in the planning effort. Early involvement by Government contract administrators and contractor personnel can increase significantly the chances of mission success, as well as the reliability of preliminary cost estimates. GAO estimates that LOGCAP costs exceeded the estimated budget for the first year in Bosnia by 32 percent, partially due to changes in the operational plan and failure to coordinate early estimates properly.
With proper planning, the growing presence of contractors on the battlefield can be a source of strength for the men and women of our Armed Forces. ALOG
David L. Young is the Contingency Contracting Administration Program Manager at Defense Contract Management District International, Defense Contract Management Command, Defense Logistics Agency. He is a graduate of the Naval War College.