Outsourcing Walter Reed

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http://www.tompaine.com/articles/2007/03/06/outsourcing_walter_reed.php

Outsourcing Walter Reed
Philip Mattera


Philip Mattera heads the Corporate Research Project, an affiliate of Good Jobs First.

Reports of substandard conditions at the Walter Reed Army Medical Center have outraged the country. But that anger should not be directed only at the callous Army officials running the facility.

The full story behind the scandal involves a misguided program to “reinvent government” through outsourcing, a company that botched the delivery of ice to victims of Hurricane Katrina and a giant hedge fund led by a former member of President Bush’s cabinet. The private sector has indirectly had a hand in converting the once legendary Walter Reed into a symbol of the shameful treatment of people who have been maimed in the service of their country.

The dismal state of some facilities at Walter Reed cannot be directly attributed to poor performance by a contractor. After all, it has been only a few months since a politically connected firm called IAP Worldwide Services started taking over many of the management functions at the medical center.

Yet a battle over whether to outsource those functions has been going on since early 2000, when the Army commenced a cost-comparison study of support services at the medical center. Such studies—which were being promoted by the Clinton administration’s “reinventing government” initiative led by Vice President Al Gore—forced groups of federal workers to compete with potential contractors to figure out which could perform a given function more efficiently.

The process dragged on for several years, and finally it was determined that the bid by federal civilian employees at Walter Reed was the better one. However, that decision was overturned by the Army Audit Agency, which was upheld by the GAO on a technicality. This allowed IAP to get a five-year, $120 million contract.

Rep. Henry Waxman, chairman of the House Committee on Oversight and Government Reform, has been gathering evidence that the prospect of outsourcing (and likely job cuts) had a detrimental effect on morale and efficiency at Walter Reed. That idea is not just theory. Last September, Walter Reed Garrison Commander Peter Garibaldi sent an internal memorandum to his superiors warning that substantial numbers of skilled workers were leaving because of the impending takeover by IAP.

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