- The Washington Times - Sunday, March 18, 2007


An Army contract to privatize maintenance at Walter Reed Medical Center was delayed more than three years amid bureaucratic bickering and legal squabbles that led to staff shortages and a hospital in disarray just as the number of severely wounded soldiers from Iraq and Afghanistan was rising rapidly.

Documents from the investigative and auditing arm of Congress map a trail of bid, rebid, protests and appeals between 2003, when Walter Reed was first selected for outsourcing, and November last year, when a five-year, $120 million contract was awarded.

The disputes involved hospital management, the Pentagon, Congress and IAP Worldwide Services Inc., a company with political connections and the only private bidder to handle maintenance, security, public works and management of military personnel. Although medical care was not directly affected, needed repairs went undone.

Press reports last month detailed subpar conditions at the 98-year-old hospital in Northwest, and substandard services for patients sparked a furor on Capitol Hill. Three top-ranking military officials, including the secretary of the Army, have been ousted.

After IAP won the contract, further delays caused by the Army and Congress delayed work until Feb. 4, two weeks before the first press reports and two years after the number of patients at the hospital hit a record 900.

“The Army unfortunately did not devote sufficient resources to the upfront planning part of this, and when you do that, you suffer every step of the way,” said Paul Denett, administrator for federal procurement policy at the Office of Management and Budget.

The contract includes management of Building 18, which houses soldiers with minor injuries and has been highlighted as symptomatic of poor conditions: black mold on the walls of patient rooms, rodent and roach infestation, and shoddy mattresses. Those 54 rooms are now vacant. Interior work cannot be started until a badly damaged roof is repaired, and that will need another contract because it’s not covered in the IAP contract, Walter Reed officials said.

The Army has confirmed the timing of the contract delays but declined several requests for comment on why the protest and appeal process took so long, even as more injured soldiers were arriving.

In 2003, the Army asked for competitive bids on nonmedical jobs at Walter Reed. At the time, the Pentagon was aggressively pushing for increased outsourcing.

One company responded: Johnson Controls World Services Inc., which would be acquired by IAP in March 2005. It initially bid $132 million, but it and Walter Reed’s management agreed that the Army was underestimating the cost. By September 2004, the Army had decided it would be cheaper to continue with current management, which said it could do the work for $124.5 million. Johnson filed a protest with the Government Accountability Office.

The protest was dismissed in June 2005, but the Army agreed to reopen bidding three months later to include additional costs for services. In January 2006, after two rounds of protests by IAP and two appeals by Walter Reed employees to the U.S. Army Medical Command, IAP won, said Steve Sanderson, a Walter Reed spokesman.

In an unusual turn of events, the contract wasn’t awarded for another 11 months, the GAO said. Walter Reed officials blame several factors, including another protest to the GAO by Deputy Garrison Commander Alan D. King, a separate appeal to the Army Medical Command by Walter Reed’s public works director, at least one intervention by Congress, and delays on required congressional notifications about government employee dismissals.

IAP spokeswoman Arlene Mellinger said, “It was up to the Army to decide when to begin that contract.” The company was ready to start at any time, she added.

In August, lawmakers led by Sen. Barbara A. Mikulski, Maryland Democrat, asked Army Secretary Francis J. Harvey to hold off on the contract until Congress finished work on the fiscal 2007 defense appropriations bill. Congress approved that bill Sept. 29.

The Army’s plan then was to eliminate 360 federal jobs at Walter Reed in November and turn over the work to IAP, according to the American Federation of Government Employees union. But the Army failed to notify Congress the required 45 days in advance, so the turnover was delayed until early this year.

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