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Bush Administration push for privatization may have helped create Walter Reed 'disaster'
Ron Brynaert
Published: Saturday March 3, 2007
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The Bush Administration's drive for privatization may be responsible for the "deplorable" outpatient care for soldiers at Walter Reed Army Medical Center, according to a top Democratic Congressman investigating the scandal, which has already led to the resignation of the Secretary of the US Army.

A five-year, $120 million contract awarded to a firm run by a former executive from Halliburton – a multi-national corporation where Vice President Dick Cheney once served as CEO – will be probed at a Subcommittee on National Security and Foreign Affairs hearing scheduled for Monday.

A letter sent by Rep. Henry Waxman (D-CA), chairman of the House Committee on Oversight and Government Reform, to Major General George W. Weightman, the former commander at Walter Reed, asks him to "address the implications of a memorandum from Garrison Commander Peter Garibaldi sent through you to Colonel Daryl Spencer, the Assistant Chief of Staff for Resource Management with the U.S. Army Medical Command" in order to better prepare himself for his testimony at the hearing.

"This memorandum, which we understand was written in September 2006, describes how the Army's decision to privatize support services at Walter Reed Army Medical Center was causing an exodus of 'highly skilled and experienced personnel,'" Waxman's letter continues. "As a result, according to the memorandum, 'WRAMC Base Operations and patient care services are at risk of mission failure.'"

Waxman's letter states that "several sources have corroborated key portions of the memorandum."

"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," Waxman continues. "IAP is one of the companies that experienced problems delivering ice during the response to Hurricane Katrina."

Waxman notes that IAP "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."

Before the contract, over 300 federal employees provided facilities management services at Walter Reed, according to the memorandum, but that number dropped to less than 60 the day before IAP took over.

"Yet instead of hiring additional personnel, IAP apparently replaced the remaining 60 federal employees with only 50 IAP personnel," Waxman writes.

Waxman adds that "the conditions that have been described are disgraceful," and that the Oversight Committee will "investigate what led to the breakdown in services."

"It would be reprehensible if the deplorable conditions were caused or aggravated by an ideological committment to privatized government services regardless of the costs to taxpayers and the consequences for wounded soldier," Waxman writes, alluding to the Bush Administration's push for privatization.

A year ago, the Government Accountability Office "dismissed a protest filed on behalf of employees at the Army's Walter Reed Medical Center, ruling that the employee group had no standing to challenge the outcome of a public-private job competition initiated prior to January 2005," GovExec.com reported.

"The American Federation of Government Employees, which provided funding to back the protest, said the impetus to appeal came from Walter Reed managers who were disappointed to see how the competition process played out," Jenny Mandel reported in February of 2006. "While the initial employee bid was $7 million less than that of IAP Worldwide Services, a mid-stream solicitation change resulted in a recalculation of the bids by all parties and in IAP's bid coming in $7 million lower, said John Threlkeld, a lobbyist for AFGE."

The article continues, "Threlkeld said the process for recalculating the employee bid was flawed, resulting in the inflation of the estimate that rendered it uncompetitive with IAP's bid."

On Saturday, the Army Times revealed that the Garibaldi memorandum cited by Waxman states that "the push to privatize support services there accelerated under President Bush’s ‘competitive sourcing’ initiative, which was launched in 2002."

Excerpts from Army Times article:

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The letter said the Defense Department “systemically” tried to replace federal workers at Walter Reed with private companies for facilities management, patient care and guard duty – a process that began in 2000.

“But the push to privatize support services there accelerated under President Bush’s ‘competitive sourcing’ initiative, which was launched in 2002,” the letter states.

During the year between awarding the contract to IAP and when the company started, “skilled government workers apparently began leaving Walter Reed in droves,” the letter states. “The memorandum also indicates that officials at the highest levels of Walter Reed and the U.S. Army Medical Command were informed about the dangers of privatization, but appeared to do little to prevent them.”

The memo signed by Garibaldi requests more federal employees because the hospital mission had grown “significantly” during the wars in Iraq and Afghanistan. It states that medical command did not concur with their request for more people.

“Without favorable consideration of these requests,” Garibaldi wrote, “[Walter Reed Army Medical Center] Base Operations and patient care services are at risk of mission failure.”

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FULL ARMY TIMES ARTICLE CAN BE READ AT THIS LINK