Military contractors difficult to fire

WASHINGTON — ITT Federal Services International, a defense contractor hired to maintain battle gear for U.S. troops in Iraq, repeatedly failed to do the job right.

Combat vehicles ITT declared as repaired and ready for action flunked inspections and had to be fixed again. Equipment to be sanitized for return to the United States was found caked with dirt. And ITT’s computer database for tracking the work was rife with errors.

Formal “letters of concern” were sent to the contractor. Still, the Army didn’t fire ITT. Instead, it gave the Colorado Springs, Colo.-based company more work to do. Since October 2004, ITT has been paid $638 million through the Global Maintenance and Supply Services contract.

The Army’s ongoing arrangement with ITT, detailed in an audit from the Government Accountability Office, shows how captive the military has become to the private sector for overseas support. Even when contractors don’t measure up, dismissing them may not be an option because of the heavy pace of operations.

Sen. Claire McCaskill, D-Mo., co-author of legislation creating a special commission to examine wartime contracting, said poor-performing contractors are more likely to get bonuses than to be penalized.

“It has just been a mess,” said McCaskill, a former state auditor. “It’s bad enough how much this war is costing. But it’s heartbreaking the amount of money that has just gone up in smoke.”

In ITT’s case, there were too few soldiers to handle the maintenance duties and no other contractors ready to step in quickly, according to Redding Hobby, the Army Sustainment Command’s executive director for field support operations.

In a brief statement, ITT said it objected to the GAO’s conclusions and has “taken numerous corrective actions.” The company also said it has met the Army’s requirements.

Contract personnel working for the Defense Department now outnumber U.S. forces in Iraq and Afghanistan; there are 196,000 private-sector workers in both countries compared to 182,000 troops.

During a congressional hearing on Jan. 24, Jack Bell, a senior Pentagon official, called the situation “unprecedented” and one “that, frankly, we were not adequately prepared to address.”

The office of the Special Inspector General for Iraq Reconstruction has 52 open cases related to bribery, false billing, contract fraud, kickbacks and theft; 36 of those cases have been referred to the Justice Department for prosecution, according to the Inspector General’s Office.

The Army Criminal Investigation Command is busy, too. The command has 90 criminal investigations under way related to alleged contract fraud in Iraq, Kuwait and Afghanistan, according to spokesman Chris Grey.

To deal with the problem, the Army is implementing many of the recommendations of a blue-ribbon panel formed last year to reform contracting procedures.

The audit by the GAO, Congress’ investigative arm, does not say there were any improprieties stemming from the ITT contract. Rather, neither the contractor nor the government were ready for the demands.

The terms of the contract called for ITT to be compensated for all labor costs. That meant the company was often paid twice to fix equipment it didn’t repair correctly the first time.

The ITT contract and other similar support arrangements will be changed so a company’s profits are linked to performance, Hobby said.