WASHINGTON – 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.
While medical care was not directly affected, needed repairs went undone as the number of nonmedical staff shrank from almost 300 to fewer than 50 in the last year.
An investigative series by The Washington Post last month sparked a furor after it detailed subpar conditions at the 98-year-old hospital in Washington and substandard services for patients. Three top-ranking military officials, including the secretary of the Army, have since been ousted.
Documents from the investigative and auditing arm of Congress map a trail of maintenance bids, rebids, protests and appeals between 2003, when Walter Reed was first selected for outsourcing, and 2006, when a five-year, $120 million contract was finally awarded.
The disputes involved hospital management, the Pentagon, Congress and IAP Worldwide Services Inc., the only private bidder to handle maintenance, security, public works and management of military personnel.
IAP is owned by a New York hedge fund whose board is chaired by former Treasury Secretary John Snow, and it is led by former executives of Kellogg, Brown and Root, the subsidiary spun off by Texas-based Halliburton Inc., the oil services firm once run by Vice President Dick Cheney.
IAP finally got the job in November 2006, but further delays caused by the Army and Congress delayed work until Feb. 4, two weeks before the Post series was published.
The Army asked for bids on Walter Reed in 2003. 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 then-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; Johnson Controls filed a protest.
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 was named the winner.
Instead, in an unusual turn of events, the contract wasn’t awarded for another 11 months, the Government Accountability Office said. Walter Reed officials blame several factors, including an additional protest to the GAO filed by Deputy Garrison Commander Alan King, a separate appeal to the U.S. Army Medical Command by Walter Reed’s public works director, at least one intervention by Congress, and delays on required congressional notifications.
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.
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