March 10, 2007

Did Privatization Undo Walter Reed?

The focus of blame for the deplorable conditions of a portion of Walter Reed Army Medical Center has now fallen on the Army's decision to privatize its maintenance workforce. After the canning the Secretary of the Army and the commander in charge of Walter Reed, critics blame a contract with a KBR subsidiary -- and a sister of Halliburton -- for the poor state of the facility:

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 workforce at the hospital, a move commanders say left the building maintenance staff undermanned.

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.

Yesterday, 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.

Well, maybe. Even if the OMB played a rather heavy-handed role in this decision, it's one within their purview. Defense contracts have routinely underestimated costs in order to lock in contracts that then have to be expanded to ensure continuance of services; it's a story that goes back farther than my own experience in defense contracting. OMB has to ensure that bidders properly state their costs, especially in cost-plus contracts, and IAP had every right to complain if they saw unfair bidding practices in play by the federal workers for the contract.

The problem appears less one of privatization than of management of the process. IAP got the contract in January of 2006, but didn't take over the job until a year later. In that period, almost half of the maintenance staff left Walter Reed, and the facility didn't replace them. It's hard to maintain a facility as large and complex as Walter Reed with only half of the necessary facilities management personnel, and over the period of a year, things will fall apart.

The Army runs Walter Reed. If they saw the need for more people, they should have moved people into these positions until they were ready to have IAP take over the functions themselves. Critics should be asking why it took the Army over a year to transfer responsibility to IAP, not blame IAP and privatization for the problems caused before they had the authority to resolve them. It's not the fault of the facilities management staff left holding the bag after half their peers quit last year, either.

The Army had the responsibility for ensuring the proper staffing and maintenance of Walter Reed, and they allowed more than a year to go by without any supervision of facilities management. That's really the beginning and end of the problem.

Note: I haven't covered this story, mostly because I believed it to be old news. Anyone who reads newspapers knows that the VA has chronic problems in serving veterans. Hollywood made a movie about it called Article 99 fifteen years ago to capitalize on the controversy over it then, a silly but earnest affair that tried to capture the essense of M*A*S*H but fell far short. (Hell, it didn't even have Fred Dalton Thompson!)

However, I underestimated the national scope of this story. It's obviously more intense now with the war on terror, especially in Iraq, and the shortcomings of the system need more exposure. It wasn't one of my better editorial decisions.


TrackBack URL for this entry:

Listed below are links to weblogs that reference Did Privatization Undo Walter Reed?:

» Bill's Nibbles // Open Post -- 2007.03.10 from Old War Dogs
Some Bill's Bites posts, some things I excerpted and linked but I'm sending you to the original post. I may rearrange the order of the items within this post as I add new things that I think belong above the [Read More]

» Did Privatization Undo Walter Reed? from Bill's Bites
Did Privatization Undo Walter Reed?Ed Morrissey The focus of blame for the deplorable conditions of a portion of Walter Reed Army Medical Center has now fallen on the Army's decision to privatize its maintenance workforce. After the canning the Secretary [Read More]