Where American Troops Go, the Private Sector Follows

WASHINGTON -- Wherever American troops go in Bosnia, Brown & Root Inc. will be nearby -- digging latrines, erecting tents, laying electrical lines, cooking meals, doing laundry and serving any other need of the U.S. military.

The Houston-based company has tagged along with U.S. soldiers and sailors on all their recent foreign interventions, from Somalia to Haiti and Rwanda, and its work demonstrates a significant shift at the Pentagon toward privatization of military functions.

The Defense Department has said it can save billions of dollars by contracting out, or "outsourcing," a wide range of military functions, from managing military bases to health-care administration, payroll, accounting and weapons repair. That way, the Pentagon reasons, it will have more money for its combat and humanitarian duties.

If U.S. commanders in Bosnia had assigned troops to peel potatoes and haul trash as in wars of yore, they might have had to deploy more than the 20,000 soldiers who will join 40,000 other NATO troops in Bosnia, military officials said.

Military commanders and Brown & Root executives are mum about the details of the company's Bosnia tasks, set to start this week at military facilities being built near the Bosnian city of Tuzla, as well as at staging areas in Hungary and Croatia. But industry officials said the international construction firm will assign several hundred people to the job, and hire thousands of local workers.

Because of the region's ethnic hatreds, the company will have to screen its local subcontract workers carefully, for reasons of security and ethnic balance on the job, industry executives said.

But Brown & Root has learned about ethnic diplomacy on other missions. In Somalia, the company ensured that the 2,300 Somalians hired to help dig wells, build latrines and tents and clean uniforms represented all the nation's warring clans in equal measure.

"They'd fight and refuse to work," said Wayne Lucas, the company's Somalia manager. "We'd say, 'You have to work together.' ... On our job site, they'd work together, and when they left, they were enemies."

Brown & Root has done about $260 million of support work for the Pentagon since 1992, when it won a competition administered by the Army Corps of Engineers. Under its contract, the company is paid for its costs plus a 1 percent profit, and as much as 8 percent more in incentive fees. The firm, which has 40,000 employees, must be ready to swing into action to prepare base camps anywhere around the world within 15 days of notification.

Military officials say they are pleased with the company's hustle. General John Shalikashvili, chairman of the Joint Chiefs of Staff, wrote the company in 1994 praising its "magnificent work" in Somalia.

Brown & Root faces stiffening competition from such companies as Lockheed Martin Corp., Raytheon Co. and Dyncorp.

Farming out military functions isn't new. The Army hired companies to lay railroad tracks in the 1800s. Dyncorp and Brown & Root built military bases in Vietnam.

But the Pentagon was fully converted to capitalism's efficiencies only during the Persian Gulf War, when thousands of contractor employees worked -- 2,500, for example, just to service Apache helicopters.

Now the Defense Department has a contract with Federal Express to deliver hundreds of rarely used weapons parts anywhere in the world within 24 hours.