Bosnia

The Defense Department (DOD) has sent about 10,500 troops to Bosnia as part of NATO peacekeeping operations. DOD estimates that the cost of U.S. participation in the NATO-led mission will total $6.5 billion for fiscal years 1996-98. GAO previously reported on why the costs for U.S. participation exceeded earlier estimates. (See GAO/NSIAD-96-204BR, July 1996, and GAO/NSIAD-96-120BR, Mar. 1996.) In this report, GAO found that DOD has improved its process for estimating costs for contingency operations by requiring that cost estimates be a part of the decision-making process in undertaking any new operation or changing an ongoing one. DOD also created a high-level committee to review cost estimates. Quarterly reviews of estimates for ongoing operations allow DOD to react to changes in costs. DOD appears to have used a logical process to develop its cost estimates for Bosnia operations for fiscal years 1997 and 1998. However, operational changes continue to affect the costs. NATO's decision to extend the operation beyond December 1996 increased the fiscal year 1997 cost estimate by more than $1.8 billion. Recent operational decisions will boost the cost estimate for fiscal year 1998. Other decisions, such as changes in the size and composition of the force and the timing of the withdrawal, could further increase the cost estimate for fiscal year 1998.

GAO noted that: (1) DOD has improved its process for estimating costs of contingency operations by requiring that cost estimates be a part of the decision-making process in undertaking any new operation or changing an ongoing one; (2) it also created a high-level committee to review cost estimates; (3) quarterly reviews of estimates for ongoing operations allow DOD to react to changes in costs; (4) DOD based its cost estimates for Bosnia operations for fiscal years 1997 and 1998 on its fiscal year (FY) 1996 experience and operational decisions known at the time; (5) DOD appears to have used a logical process to develop these estimates; (6) however, operational changes have had and continue to have significant impacts on the costs; (7) the North Atlantic Treaty Organization's decision to extend the operation beyond December 1996 increased the FY 1997 cost estimate by over $1.8 billion; (8) recent operational decisions will increase the cost estimate for FY 1998; and (9) other decisions, such as changes in the size and composition of the force and the timing of withdrawal, could further increase the cost estimate for FY 1998.