MED Continues Support to Balkans with USC II

Middle East District Public Affairs
Published Dec. 21, 2011

WINCHESTER, Va. -- When President Bill Clinton ordered 20,000 U.S. troops to Bosnia-Herzegovina in December 1995, U.S. Army Europe turned to the U.S. Army Corps of Engineers to provide services through an existing contract managed by the Middle East District's predecessor. Soldiers received their life support – food, water, laundry and sanitation – and transportation and maintenance services through that contract, allowing them to focus on their peacekeeping mission.

Sixteen years later, USAREUR and USACE continue their relationship. Much has changed during that time, but the mission to support Soldiers has remained the same.

On Nov. 3, the Middle East District awarded the USAREUR Support Contract II – or USC II – the fifth contract supporting USAREUR's operations in the Balkans. The new contract replaces the USAREUR Support Contract I which had been in place since July 2006.

"The contract enhances operational readiness of deployed U.S. Army troops by providing all necessary logistics support, temporary construction and associated services," said Judith O'Connor, Contract Management Specialist, USAREUR, Office of the Deputy Chief of Staff, G4.

O'Connor said that the contract provides 95 percent of logistics services for USAREUR missions at Camp Bondsteel in Kosovo and military training exercises in Romania and Bulgaria. "With the EUCOM (U.S. European Command) directed force caps in KFOR (Kosovo Force), there are not enough deployed Soldiers to staff both logistics support and mission requirements," O'Connor continued. "The USC contractor provides necessary logistics support, freeing up Soldiers to perform critical mission activities."

KFOR, the multinational force with substantial NATO participation, has been the peacekeeping force since 1999. Its structure is determined by NATO, with multinational battle groups responsible for specific geographic regions. Camp Bondsteel, located near Ferizaj, is headquarters for U.S. Army and international forces that comprise Multinational Battle Group East.

"The USC II allows both life support and logistical services to continue at Camp Bondsteel," said Joe Libbey, administrative contracting officer for the USC Administrative Contracting office in Kosovo. "It's also the primary MNBG-E logistical source supporting forward deployed troops in northern Kosovo. In addition, the contract will be used to maintain an operating site in Romania, and like its predecessor, the contract can be used to provide logistics services for military training exercises."

This means that Soldiers can rely on the contractor to provide everything from food preparation, laundry and housing, to base camp maintenance, to military vehicle maintenance, supply support and transportation services. When facilities are no longer needed, the contractor will disassemble them.

USC II award

The USC II is a one-year base contract, with four one-year option periods that are awarded based on the government's needs. Kellogg Brown & Root Services Inc. of Arlington, Va., holds the contract, which was awarded for $118 million. Over the five-year lifespan of this contract, the government may order services up to the maximum capacity of $245 million.

USC II is a performance-based service contract, allowing the government to issue task orders for work requirements. Performance-based contracts are structured around the purpose of the work to be performed as opposed to the manner in which the work is performed. The contractor has the freedom to determine how to best meet the government's performance objectives while being measured against quality and performance standards contained in the contract.

Just as its predecessor did, USC II contains both firm-fixed-price and cost-plus line items.

"Approximately 80 percent of the new contract is firm fixed price, with the remaining 20 percent being cost plus fixed fee," said Willis Herweyer, project manager, Service Contracts Section, Construction Operations Division. "During the acquisition process, we estimated that more than 90 percent of the contract value supports operations at Camp Bondsteel. Therefore, the majority of the work is known and therefore can be priced."

Early contracts in the Balkans were cost-plus-award-fee contracts. With the award of USC I in July 2006, the government sought to include fixed-price line items to reduce costs, and the use of fixed-price line items has grown from 47 percent in 2006 to 80 percent today.

Having cost-plus line items provides flexibility for unknown work requirements. Examples include contractor support for a transfer of authority ceremony, disassembly of camps and services for an unscheduled military training exercise.

While previous contracts had cost-plus line items, a notable difference is using cost plus fixed fee rather than cost plus award fee.

"With the award-fee contract, an award fee evaluation board met to evaluate contractor performance, which determined award-fee percentages," O'Connor said. "The USC II will have a performance evaluation review board that will deduct costs for nonperformance."

Roger Thomas, Chief, Construction Operations Division, said that the contract contains a formula for deduction if the standard isn't being met. "For instance, if a particular service requires a timeliness standard of 90 percent and the contractor falls under that, the formula will be applied to reduce the fixed fee.

"As we manage the new contract, we'll work with USAREUR to determine the best times for program reviews and performance meetings with the contractor," Thomas continued. "We'll monitor performance for trends and issues to continue providing a high level of support to this customer. As shown in annual customer surveys, USAREUR consistently has been satisfied with the level of services provided by the Middle East District."

A dynamic environment in Kosovo

Given the changing nature of the Kosovo mission, requirements for services are likely to change dramatically over the life of the USC II, Herweyer said.

"The military footprint in that region is evaporating," Herweyer said. Camp Bondsteel is divided into North Town, Midtown, South Town, an industrial area called Griffin Hill and other areas. Already, North Town and Griffin Hill have been deconstructed, and Midtown is expected to close next summer.

The closures resulted from international efforts focused on establishing the rule of law and the development of professional, democratic and multiethnic security structures in Kosovo. As those initiatives helped improve security, NATO reduced its forces and transitioned to a deterrent force.

"While we expect Camp Bondsteel to eventually close, those decisions are based on conditions in the country," Herweyer said. In September, NATO troops responded to violent outbreaks on the border between Kosovo and Serbia, resulting in increased tensions between the two countries.

USC II outside the Balkans

Because support to USAREUR is outside the geographic area of responsibility for the Middle East District, the district took a deliberate approach when developing the requirements for the USC II in summer 2010.

"We offered our services to USAREUR for the operations in the Balkans – what we called the legacy mission," Thomas said. "We agreed that USACE would handle the legacy work under the USC II and that any new missions in the USAREUR area of operations would have involvement from the 409th Contracting Support Brigade."

The 409th provides centrally managed and locally provided procurement support for USAREUR tactical units and area support groups.

"New work under the USC II will be a joint undertaking between USACE and the 409th," Thomas continued. "The Middle East District will provide project management and financial administration services, with the 409th providing contract administration services at the project location. In addition, we will assist the 409th with developing a USC-like contract to meet other requirements within their area of operations. This arrangement will culminate in February with the signing of a memorandum of understanding between the 409th, USAREUR and USACE."

With a new player on the team, the goal remains the same: providing Soldiers the necessary support they need to perform their missions while deployed anywhere in the USAREUR area of operations.


When facilities are no longer needed to support U.S. Army Europe operations, they are disassembled under the USAREUR Support Contract. Photo by Blerim Bytyqi.

Through the USAREUR Support Contract, deployed Soldiers get laundry and other life support services. Photo by Joan Kibler.

The contractor provides fire and emergency support services at Camp Bondsteel, Kosovo. Photo by Joan Kibler.