Cost and Financing of Operation Desert Shield

T-NSIAD-91-3: Published: Jan 4, 1991. Publicly Released: Jan 4, 1991.

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GAO discussed the estimated cost and financing of Operation Desert Shield. GAO noted that: (1) the total cost of Operation Desert Shield without any hostilities would exceed $130 billion in 1991 if the forces now in place remained there throughout the fiscal year (FY); (2) the cost of Operation Desert Shield consisted of a baseline cost estimated at $100 billion, an incremental cost of mounting the operation estimated at $30 billion, and related costs such as debt forgiveness and humanitarian assistance estimated at $7 billion; (3) the Department of Defense (DOD) obligated its FY 1991 appropriations for operations faster than normal and was expected to exhaust some of those funds by April or May 1991; (4) 35 countries furnished troops and equipment for the operation and DOD reported cash contributions of about $4.3 billion and in-kind contributions of about $379 million; (5) three suggested DOD financing options included supplemental funding, transfer of funds among DOD accounts, and additional contributions from allies; (6) uncertainties which could affect cost estimates included the unknown value of offsets, inadequate DOD guidance, and pending decisions regarding rotation; and (7) GAO believes that Congress should provide periodic appropriations instead of a supplemental lump sum, as actual costs become clearer.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Legislation was passed reducing the appropriation by assistance-in-kind received and/or expected and allowing DOD to pay for increased fuel costs only with money contributed by allies. Also, Congress retained some control over how the monies are transferred from the Defense Cooperation Account and the Persian Gulf Defense Fund.

    Matter: Congress should provide periodic appropriations during the fiscal year, as actual costs become clearer. Some of the uncertainties include: (1) the unknown value of offsets such as assistance in kind, including food and water; (2) inadequate DOD guidance on what constitutes Desert Shield costs; and (3) other factors, such as a decision to implement a rotation policy.

 

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