Walter Reed’s decision to privatize scrutinized

WASHINGTON – The scandal over treatment of outpatients at Walter Reed Army Medical Center has focused attention on the Army’s decision to privatize the facilities-support work force at the hospital, a move commanders say left the building maintenance staff shorthanded.

Some Democratic lawmakers have questioned the decision to hire IAP Worldwide Services, a contractor with connections to the Bush administration and to KBR, a Halliburton subsidiary.

Last year, IAP won a $120 million contract to maintain and operate Walter Reed facilities. The decision reversed a 2004 finding by the Army that it would be more cost-effective to keep the work in house. After IAP protested, Army auditors ruled that the cost estimates offered by in-house federal workers were too low. They had to submit a new bid, which added 23 employees and $16 million to their cost, according to the Army.

Friday, the American Federation of Government Employees, the largest federal workers union, blamed pressure on the Army from the White House’s Office of Management and Budget for the decision to privatize its civilian workforce.

“Left to its own devices, the Army would likely have suspended this privatization effort,” John Gage, president of the organization, said in a statement. “However, the political pressure from OMB left Army officials with no choice but to go forward, even if that resulted in unsatisfactory care to the nation’s veterans.”

The Army selected IAP for the five-year deal in January 2006, but IAP did not take over management until last month. During that period, the number of facilities management workers at Walter Reed dropped from about 180 to 100, and the hospital found it hard to hire replacements.

Maj. Gen. George Weightman, who was Walter Reed’s commander until he was relieved last week, testified last week that the privatization – in combination with a decision by the Pentagon in 2005 to close Walter Reed by 2011 – “absolutely” contributed to the problems.

IAP said in a statement it has “responded with a sense of urgency to address maintenance concerns throughout the (Walter Reed) complex.”

The White House did not respond to a request for comment.

IAP, based in Cape Canaveral, has provided such services to the government as delivering ice in the Gulf Coast after Hurricane Katrina and helping maintain Afghanistan’s air traffic control system. In 2006, the firm had $393 million in military contracts, according to Pentagon data.