LOGCAP
Written by Peter Buxbaum
MLF 2011 Volume: 5 Issue: 9 (October)
An uncommonly large phase-in and phase-out of contractor services—perhaps the largest such transfer in world military history— was successfully completed in northern Afghanistan last year. This transfer was conducted between KBR, the Logistics Civil Augmentation Program (LOGCAP) III performing contractor, and Fluor Intercontinental Inc., the LOGCAP IV incoming contractor.
The transition of logistics contract support included 59 forward operating bases with a population of over 70,000 U.S. military servicemembers, coalition forces, and Department of Defense civilians and contractors. The transfer, which was completed in less than nine months, involved over 12,000 prime and subcontractor employees of KBR and Fluor. All of this took place while a U.S. force surge was taking place in that theater.
“The Army has called our operations during the transition period a success in planning and execution as well as the largest contractor battlefield relief-in-place and transfer of authority in military history,” said Tony Montalvo, deputy project manager on LOGCAP for Fluor. “This was all completed as the U.S. Army surged forces, increasing the scope of our work and the number of the forces on the ground.”
All of this illustrates the enormity of the LOGCAP contracts. LOGCAP IV diverged from its predecessors in that it was awarded to multiple contractors to deliver services, instead of using a single contractor—KBR in the case of LOGCAP III, DynCorp International in the case of LOGCAP II from 1997 to 2002. But some of the individual task orders issued under LOGCAP IV—two of which contract out broad logistical responsibilities to provide food, housing, fuel, and other products and services in northern and southern Afghanistan respectively—are each potentially worth billions of dollars.
LOGCAP IV is the latest in a series of such contracts awarded since the mid-1980s. Fluor, DynCorp International and KBR are the three performing contractors under LOGCAP IV. A fourth contractor, Serco-North America, provides management and administrative support.
LOGCAP is a U.S. Army program designed to plan in peacetime for the use of civilian contractors in wartime and other contingencies. The Defense Contract Management Agency is the contract administrator for LOGCAP. The Army Materiel Command represents LOGCAP’s consumers, warfighters and civilians in the field.
The multiple contractor strategy employed in LOGCAP IV was meant to ameliorate an unsatisfactory situation that arose under LOGCAP III, in which government audits of KBR’s work were unable to account for millions of dollars or to justify all of the company’s charges. The strategy, drawing from lessons learned, calls for improved administration and oversight by introducing competition into the contracting process and allowing the Army to manage the LOGCAP task orders more effectively.
“The major difference in the acquisition strategy for LOGCAP IV is that we determined to use three performance contractors to provide services to support warfighters,” said Tommy Marks, the LOGCAP executive director. “The change in approach came so that we didn’t have a single point of failure. We still have to sustain the wars in Afghanistan and Iraq and we also have other global missions that we are required to do.”
The LOGCAP IV contracts are indefinite delivery/indefinite quantity (IDIQ) contracts with one base year and nine option years. Each contract has a maximum value of $5 billion per year, allowing the Army to award a total annual maximum value of $15 billion and a lifetime maximum value of $150 billion.
The Army selected a fourth contractor, Serco-North America, to provide planning support, essentially monitoring the other three contractors. “The Serco contract is used to augment my staff,” said Marks. “We don’t have enough force structure out of my office or in the reserve component to meet all the requirements for cost analyses and estimates” and other related services. (Serco-North America refused to be interviewed for this article.)
The scope of the LOGCAP IV contract is the same as its predecessor, said Marks: to build cases and camps, housing and dining facilities, to provide support services for all of these, and to provide transportation, warehousing and supply services. “The contracts include the gamut of logistical support,” said Marks. “The Army requires these services to support the war fighting side of the house. We don’t have enough personnel on active duty or within the reserve component to execute these missions.”
There have been a limited number of task orders issued through LOGCAP IV since 2009, all of which involve providing services in and around the Southwest Asia theaters of operations. In February 2009, DynCorp won two task orders: a $20.8 million job to support the Udairi Army Airfield in Kuwait and a $77 million to provide movement control and management of intransit logistics for U.S. military personnel in Kuwait. The Udairi task order included firefighting services, equipment and vehicle maintenance, airfield operations, air traffic control, and weather observation and forecasting services. The movement control task order included base camp services, life support and operations, and maintenance of seaports and airports.
In March 2010, KBR received a task order to provide logistics, transportation and postal services to U.S. forces in Iraq. The award was worth $571 million in its first year, with a potential total value of $2.77 billion if all options are exercised. In addition, “In May 2010, the company was awarded a task order under which it will support U.S. Army and Navy missions at five sites in Bahrain,” said Gabriela Segura, a KBR spokesperson. In July 2011, KBR was awarded a LOGCAP IV task order to support the requirements of the U.S. Department of State’s mission in Iraq. This award is currently under bid protest.
“KBR has been providing base support life services in support of military operations in Iraq since 2003,” said Segura. “The company has a proven capability to deliver services and projects in logistically challenging environments.”
The two big Afghanistan task orders came in July 2009, when the Army awarded DynCorp and its two partners, CH2M Hill and Taos Industries, a task order for logistics support for southern Afghanistan and Fluor a similar task order for northern Afghanistan. The DynCorp task order was valued at $643.5 million annually with a total potential of $5.874 billion. The Fluor task order had an initial value of $1.5 billion and a total potential value of up to $7 billion.
Under its southern Afghanistan task order, DynCorp International is providing existing bases with operations and maintenance support, including facilities management, electrical power, water, sewage and waste management, laundry operations, food services, and transportation motor pool operations. DynCorp International will also provide various construction services for additional sites.
“We have 16,000 employees at 60 sites performing the task order in southern Afghanistan,” said A.W. Short, DynCorp’s LOGCAP program manager.
The scope of DynCorp’s southern Afghanistan task order is enormous. “We have built over 40 camps,” said Short. “We do the maintenance on non-tactical vehicles, we run the motor pool and shuttle bus services. We operate the supply support activity, control cargo movements in the form of airlifts and truck movements. We are responsible for a very large number of containers. We are also responsible for inventory forecasting, project planning, and cost management and control.”
DynCorp endeavors to use locals to provide trucking services. “We use host nation trucking as a cost-saving method,” said Short. “Just in the last six months we had 3,200 truck movements. Of those, 2,300 used host-nation trucking. This saved a substantial amount of money.” The remainder of the truck movements went by military convoys.
DynCorp also moves between 2,500 and 3,250 containers per month in its area of responsibility. “We make sure that any container being leased and not owned by the government doesn’t sit around for any length of time,” said Short. “We get it back to the owner to reduce demurrage costs.”
In addition to all this, the contract also calls for DynCorp to provide health, safety and environmental staff support, morale, food and laundry services, sewage, power generation, firefighting, and water provision. “We produce over 3 million gallons of water per day,” said Short. “We are also sometimes called upon to provide Internet services.”
In the last six months DynCorp has processed over 280,000 receipts in southern Afghanistan and over 27,000 lines of repair parts required to perform maintenance were processed for the authorized storage list. “We processed over a million requests for different things in the last six months,” said Short. “We ship equipment and supplies to over 1,200 unit addresses in southern Afghanistan. There is a lot of volume and lots of velocity in this operation. It comes at you very fast.”
In the northern part of Afghanistan, LOGCAP provides operations and maintenance to over 1,500 non-tactical vehicles, 1,800 generators, 7,500 facilities, and over 40 dining facilities providing over four million meals per month. LOGCAP also provides, on a monthly basis, over 42 million gallons of water and 19 million gallons of fuel, and processes over 150,000 bags of laundry.
Fluor’s task order for northern Afghanistan includes construction services, power, water, housing, base operations, sustainment services and logistics support to 74 operating bases in the region. Fluor’s scope of work includes providing construction services, power, water, housing, base operations, sustainment services and logistics support. “In Afghanistan we provide a number of different services from water production, bulk fuels operations, container management, government supply, laundry services, food services, vehicle maintenance and power generation, to name a few,” said Montalvo.
Fluor operates on over 70 bases in northern Afghanistan and around Kabul. “Each base has its own set of services,” said Montalvo. “In any given month we’ll receive and issue tens of millions of gallons of fuel for everything from helicopters to MRAPs. We’ll process, test, store and deliver millions of gallons of potable and nonpotable water. We’ll serve over 175,000 meals daily, do more than 200,000 bags of laundry a month, and manage over 50,000 lines of inventory. We maintain everything from generators to military vehicles to morale, welfare and recreation facilities. This is all done so the soldier can focus on fighting the enemy versus providing support.”
Safety for its people is also an important concern for Fluor Corporation. “With the equivalent of an oversized Army brigade of contractors working on the ground,” said Montalvo, “we have to stay vigilant to remain safe. Since we have been operating in Afghanistan, we have always had a good safety record and currently we maintain a safety record that is 23 times safer than industry standards. This focus on preventing slips, trips, falls, and hand and limb accidents allows us to keep our work force focused on supporting the combat forces. It also ensures that our folks go home the same way they came into work each day, safe and in one piece.”
The Army is saving money by contracting out the logistics services included in LOGCAP, according to Marks. “There are 90 contractors working for us right now in in Southwest Asia,” he said. “If that was 90 soldiers we would have to rotate them out every year with full compensation packages and benefits, so there are some advantages to contracting out.”
“LOGCAP IV is the best example of quality services being provided to the military,” said Spence Wickham, DynCorp’s head of contingency operations. “I think it is by far the most comprehensive when it comes to accountability, cost containment, performance, and value provided to the taxpayer and the warfighter.” At this point there are not any further LOGCAP IV task orders on the drawing boards. “I’m waiting for the guy that I work for, the warfighter, to tell me what the requirements are,” said Marks. “Right now there are no new requirements on the table. But new requirements could come down tomorrow and then we can tissue a new task order.” ♦