The Scandal of Privatization at Walter Reed

Waxman, Henry, chairman of the House Committee on Oversight and Government Reform. 2007. “Letter to Major General George W. Weightman, former commander of Walter Reed Army Medical Center.” (2 March).

Click to access 20070302131606-66371.pdf

“We have learned that in January 2006, Walter Reed awarded a five-year, $120 million contract to a company called IAP Worldwide Services for base operations support services, including facilities management. IAP is one of the companies that experienced problems delivering ice during the response to Hurricane Katrina. The company is led by Al Neffgen, a former senior Halliburton official who testified before our Committee in July 2004 in defense of Halliburton’s exorbitant charges for fuel delivery and troop support in Iraq.”

“According to multiple sources, the decision to privatize support services at Walter Reed led to a precipitous drop in support personnel at Walter Reed. Prior to the award of the contract, there were over 300 federal employees providing facilities management and related services at Walter Reed. By February 3, 2007, the day before IAP took over facilities management, the number of support personnel had dropped to under 60. Yet instead of hiring additional personnel, IAP apparently replaced the remaining 60 federal employees with only 50 IAP personnel. The conditions that have been described at Walter Reed are disgraceful. Part of our mission on the Oversight Committee is to investigate what led to the breakdown in services. It would be reprehensible if the deplorable conditions were caused or aggravated by an ideological commitment to privatize government services regardless of the costs to taxpayers and the consequences for wounded soldiers.”

“In September 2004, the Army determined that the in-house federal workforce at Walter Reed to perform support services at Walter Reed at a lower cost than the bid received from IAP Worldwide Services. IAP protested. The Army audit agency was directed to reevaluate the bid from federal employees. It was reported that the agency withdrew its certification of the employee bid and unilaterally raise the bid by $7 million making the employee bid higher than the contractor.” see Mandel, Jenny. 2007. “GAO declines to Hear Protests of Walter Reed Competitive Sourcing Decision.” (24 February)

http://www.govex who

The employees were not allowed to appeal the ruling. The IAP bid received no similar cost review.

The committee also released an internal Army memorandum reportedly written in September in which the Walter Reed garrison commander, Col. Peter Garibaldi, warned Weightman that “patient care services are at risk of mission failure” because of staff shortages brought on by privatization of the support work force at the hospital.

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