Friday, June 11, 2010

LOGCAP 4: Billions of Dollars Awarded for Army Logistics Support

The US Army’s sole provider LOGCAP 3 contract, which provided food, housing and fuel for U.S. troops worldwide, generated lots of controversy because government audits of the sole supplier’s (Halliburton-KBR) work were unable to fully account for millions of dollars or justify all charges to the Pentagon’s satisfaction. 

To address perceived problems of LOGCAP 3, the Army awarded the follow-on contract, LOGCAP 4, to 3 companies – KBR, DynCorp and Fluor – who compete for task orders. 

The LOGCAP 4 contracts are indefinite-quantity/ indefinite-delivery contracts with 1 base year and 9 option years. Each contract has a maximum value of $5 billion per year. This allows the Army to award a total annual maximum value of $15 billion and a lifetime maximum value of $150 billion…

New Approach

Headed for Iraq
The 4th in a series of Logistics Civil Augmentation Program (LOGCAP) contracts awarded since the late 1990s, LOGCAP 4 was awarded based on a procurement strategy that employs multiple contractors to deliver services, instead of using a single contractor as in the past. 

Planning support and performance functions have been split among different contractors to allow the Army to manage the number and scope of LOGCAP actions. The 3 performance contractors compete for individual LOGCAP task orders.

In addition, the Army selected a 4th contractor, Serco-North America, to provide planning support, essentially monitoring the 3 other contractors. This structure introduces competition into the contracting process and allows the Army to manage the LOGCAP task orders more effectively.

The types of services to be delivered under LOGCAP 4 include:
  • supply operations, such as the delivery of food, water, fuel, spare parts, and other items;
  • field operations, such as dining and laundry facilities, housing, sanitation, waste management, postal services, and recreation activities; and
  • other operations, including engineering and construction, support to communication networks, transportation and cargo services, and facilities maintenance and repair.
Although the new contract structure has improved the situation, there remain issues concerning protests from contractors on the losing end of specific task orders. The Army offers details some of these issues in “Army segues from LOGCAP III to IV.”

DID’s article “Vanity Fair’s ‘The People vs. the Profiteers’” has an in-depth discussion of a Vanity Fair article on KBR’s legal trouble over its LOGCAP work.

Contracts and Key Events

May 27/10: KBR announces that it was awarded a $28 million task order under LOGCAP 4 to provide logistics support to the US Army and US Navy at 5 sites in Bahrain. Under the task order, KBR will support 1,400 US military personnel and provide camp construction, including the build out of a life support area, facilities management, HAZMAT management, water production, firefighting services, airfield operations and power generation facilities. Services will also include self-service laundry operations, food service, shuttle bus services and fuel retail operations.

March 2/10: KBR announces it received a LOGCAP 4 task order to provide corps logistics, transportation, and postal services to US forces in Iraq. The award is for 1 base year plus 4 one-year options. The 1st year of the task order is worth $571 million, and its potential value is $2.77 billion if all options are exercised, the US Army Sustainment Command confirmed with DID.

In response to the award, US House Oversight Committee Chairman Edolphus Towns (D-NY) sent a letter on March 3/10 to Defense Secretary Gates in which he expressed his “deep concern” at the KBR award.

“KBR was responsible for providing a wide range of support services in Iraq, including the maintenance of electrical systems in facilities where several U.S. service members were fatally electrocuted. Faulty electrical systems maintained by KBR have caused serious injuries in Iraq and may have contributed to the numerous electrical fires that reportedly occurred at U.S. facilities in Iraq. In addition to this, there have been numerous allegations of waste, fraud, and abuse by KBR. Given this, it seems inconceivable to me that the Defense Department would award this new contract to KBR in Iraq.”

Towns requested a slew of documents from the Pentagon related to the recent LOGCAP 4 award to KBR, as well as performance reviews and evaluations of KBR’s work in Iraq since the committee’s July 30/08 hearing on KBR.
Asked by DID to respond to Towns’ letter, KBR’s Heather Browne cited a quotation by Bill Bodie, president of KBR North American Government and Defense, from the task order press release:

“This award demonstrates the U.S. government’s recognition of KBR’s ability to deliver high-quality logistics services in challenging contingency environments. We look forward to providing the U.S. military with a critical force enabler as we enter into a new phase of our mission in Iraq.”
Jan 28/10: The US Army Sustainment Command (ASC) awarded a task order to Fluor under the LOGCAP 4 contract to support the US military’s humanitarian relief operations in Haiti. Under the 30-day $50,000 task order, Fluor is authorized to place a liaison in Haiti to coordinate base operations and logistics support services needed for US military and government personnel deployed in support of the Haiti earthquake relief effort. 

July 8/09: DynCorp, along with team members CH2M Hill and Taos Industries, said it won a task order (W52P1J-07-D-0007) with a potential value of $5.9 billion to provide logistics support for U.S. troops in the southern area of responsibility (AOR) in Aghanistan. The task order has a base year worth $643.5 million plus four 1-year options. 

Under this task order, the DynCorp team will provide existing bases within the Afghanistan South AOR 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 will also provide construction services for additional sites.

July 8/09: Fluor Corp. said it won a task order (W52P1J-07-D-0008), with a potential value of $7 billion, to provide logistics support for U.S. troops in the northern AOR in Afghanistan. The task order has a base year plus four 1-year options. Fluor will provide construction services, power, water, housing, base operations, sustainment services and logistics support to 74 U.S. operating bases in Afghanistan’s Northern region.

Fluor said that this latest task order is the 4th it has received under the LOGCAP 4 contract. Previously, Fluor was awarded task orders to expand and operate 4 forward operating bases in northern Afghanistan, to provide measurement and testing services in Kuwait, and to build and operate 8 additional forward operating bases in Afghanistan.

July 6/09: In an announcement related to its LOGCAP work, KBR said a federal appeals court ruled that the Political Question Doctrine bars a lawsuit against KBR for civil liability related to its activities as a contractor to the U.S. military under the LOGCAP contract. The court affirmed in this case that the military, not civilian contractors, decides and directs the activities of contractors in battlefield situations.

Feb 24/09: DynCorp announces that the US Army Sustainment Command has authorized the company to proceed under a $20.8 million LOGCAP 4 task order to support the Udairi Army Airfield in Kuwait. This task order was awarded to DynCorp Dec 18/08, but was under a stay-of-performance due to a protest by the incumbent; the GAO lifted the stay-of-performance Feb 23/09, following denial of the protest. DynCorp will be responsible for a range of services at Udairi Army Airfield, including firefighting, fire protection support, equipment and vehicle maintenance, airfield operations, flight dispatch, air traffic control tower services, and weather observation and forecasting services. 

The potential value of this task order is $20.8 million for a transition period and 1 year at full performance. Up to 4 option years may also be awarded at the discretion of the US government.

Feb 18/09: DynCorp announces that the US Army Sustainment Command awarded the company a LOGCAP 4 task order worth up to $77 million to provide movement control operations and management of in-transit logistics and facilties for US military personnel in Kuwait. The order includes base camp services, life support and operations and maintenance of US government facilities, including seaports and airports. The task order has a transition period and 1 year period at full performance, with 4 option years. The task order was awarded after the GAO denied a protest from “the incumbent,” likely a reference to KBR.

April 17/08: The US Army announces the selection of 3 companies for the LOGCAP 4 contracts: DynCorp International in Fort Worth, TX; Fluor Intercontinental in Greenville, SC; and Kellogg, Brown, and Root (KBR) Services in Houston, TX. A total of 5 companies submitted offers.

The 3 LOGCAP 4 performance contracts were originally awarded to the same companies on June 27/07. The 2 unsuccessful bidders filed protests with the GAO, which upheld the protests on Oct 5/07, and the Army subsequently implemented the corrective actions recommended by the GAO leading to the April 17/08 contract award announcement.

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