By Gary SheftickApril 18, 2008
WASHINGTON (Army News Service, April 18, 2008) - Logistics-support services in Iraq, Kuwait and Afghanistan will now be split among three companies: DynCorp, KBR and Fluor Intercontinental Inc.
The firms were awarded the Logistics Civil Augmentation Program, or LOGCAP IV contract, the Army announced Thursday evening. Until now, most services in theater -- from billeting to transportation and dining facilities to laundry - have been provided by Kellogg, Brown and Root under the LOGCAP III contract.
KBR provided a total of about $4.9 billion in services last fiscal year within the U.S. Central Command theater of operations, Army contracting officials said. They said about 50,000 employees are now working for KBR and its subcontractors in Southwest Asia.
The new contract calls for all of the services or "task orders" to be competed among the three companies, and LOGCAP Executive Director Lee Thompson said this should begin to happen over the next 60 days.
"What they have won is the potential" to provide services totaling $5 billion a year for the next 10 years, said James Loehrl, executive director for acquisition at the U.S. Army Sustainment Command. He said the three companies will competitively bid for each service or task order.
The LOGCAP IV performance contracts are being awarded as Indefinite Quantity and Indefinite Delivery contracts with one base year and nine option years. With three companies each being awarded up to $5 billion in services per year, contracting officials explained this will allow the Army to award a total of up to $15 billion annually, and up to $150 billion over the next 10 years.
No disruptions in service are expected as the contract changeovers occur, said Thompson, who also serves with the U.S. Army Sustainment Command. He said LOGCAP will strive to make the changes as "transparent" as possible to Soldiers and other customers.
Three types of services will be delivered under the LOGCAP IV performance contracts:
Aca,!Ac Supply operations, such as the delivery of food, water, fuel, spare parts and other items;
Aca,!Ac Field operations, such as dining and laundry facilities, housing, sanitation, waste management, postal services, and morale, welfare and recreation activities; and
Aca,!Ac Other operations, including engineering and construction, support to communication networks, transportation and cargo services, and facilities maintenance and repair.
The LOGCAP IV performance contracts were originally awarded to the same three companies June 27, Army officials explained. Following the contract announcement, two unsuccessful bidders filed protests with the Government Accountability Office. The GAO eventually upheld the protests and the Army then took corrective action and asked for five new proposals, said Jeff Parsons, executive director of the new U.S. Army Contracting Command (Provisional), at Fort Belvoir, Va.
"It was the right thing for the Army to do," Parsons said, after Loehrl explained that the Army was not bound by law to implement the GAO recommendations to ask for new proposals and review them under a full and open competition.
Parsons said the Army is implementing a number of actions to improve and standardize contracting procedures in theater, following last fall's Gansler Report, which identified some issues with contracting practices in theater.
"We want to be good stewards of tax-payer dollars," Parsons said.
LOGCAP IV was awarded based on an innovative strategy, officials said, adding that it uses several new support techniques, including multiple contractors. Under the new strategy, they said planning support and performance functions have been split among different contractors to allow the Army to more effectively manage the number and scope of LOGCAP actions. The three contractors competing for individual LOGCAP task orders will create a competitive environment meant to control costs and enhance quality, they said.
"By using sound business practices the Army is confident that the LOGCAP IV contractors will provide excellent value and performance, provide Soldiers with the best services available and be able to respond quickly to emerging requirements as identified in the LOGCAP mission," said Acting Under Secretary of the Army Nelson M. Ford.
"LOGCAP IV uses competition to deliver the best quality at the right price for our men and women around the world," Ford said. "This approach provides our Soldiers the quality and value that the American public expects for their tax dollars."
The LOGCAP award announced Thursday is the fourth in a series of LOGCAP contracts awarded since the late 1990s, officials said. Brown & Root Services held the LOGCAP I contract from 1992-1996. DynCorp held LOGCAP II from 1997 through 2001 and KBR held the LOGCAP III contract from 2001 to the present. In February 2007, the U.S. Army Sustainment Command selected Serco, Inc. to provide planning and program support under a separate LOGCAP IV contract.
(An Army Public Affairs news release contributed to this report.)