Troops deserve better than then lowest bidder

The deplorable conditions at the Army's Walter Reed Medical Center revealed by the Washington Post's recent investigative reports have resulted in a number of high-profile resignations and firings, including the most recent one reported today:

Lt. Gen. Kevin C. Kiley, the Army's surgeon general, agreed to step down from his position after weeks of intense public criticism stemming from revelations about poor conditions at Walter Reed Army Medical Center, defense officials said yesterday.

Though there had been repeated calls for Kiley to resign as the Army's top doctor during hearings on Capitol Hill, he refused to step aside even as he was grilled about horrid living conditions and a tangled bureaucracy at the Army's flagship hospital. Kiley at first played down reports of problems at Walter Reed-- where he had served as commander from 2002 to 2004 -- but later was far more contrite.


The Army's initial playing down of reports of rodent infestation, mold and bureaucratic delays at Walter Reed angered senior officials at the Pentagon and drew concern from top administration officials -- including President Bush. Defense Secretary Robert M. Gates was quick to seek accountability at the highest levels, forcing Harvey to resign days after firing the commander of Walter Reed, Maj. Gen. George W. Weightman, two weeks ago.

Ongoing probes could lead to more firings, two defense officials said yesterday.

Questions remain, however, regarding how one key player was hired in the first place.

During a Congressional inquiry into the Walter Reed scandal, it was revealed that services at the medical center had been outsourced to IAP Worldwide Services. Who is IAP Worldwide Services? According to this summary of their involvement:

IAP Run by Former Halliburton Executives. IAP, which is based in Cape Canaveral, Fla., has more than $1 billion a year in revenue and more than 5,000 employees around the world, according to the company's Web site. It is owned by Cerberus Capital Management LP, a private asset management firm. The firm has grown exponentially in recent years in part because of contracts in Afghanistan and Iraq. It recently recruited high-ranking Halliburton Co. official Al Neffgen to be its chief executive. IAP's President is Dave Swindle. Prior to IAP, Swindle was Vice President, Business Acquisition and National Security Programs and an Officer for Kellogg Brown and Root. In this capacity, he was responsible for the Government and Infrastructure Division's Business Development Operations for KBR Americas, Asia-Pacific, Europe-Africa, and the Middle East. [IAP Website, Accessed 3/5/2007; Washington Post, 10/20/2005]

If the name IAP Worldwide Services sounds familiar, it's because it is the same IAP that was awarded a $120 million contract by FEMA to deliver ice to Katrina victims, among several others. You may recall what happened next:

The somewhat befuddled heroes of the tale will be truckers like Mark Kostinec, who was dropping a load of beef in Canton, Ohio, on Sept. 2 when his dispatcher called with an urgent government job: Pick up 20 tons of ice in Greenville, Pa., and take it to Carthage, Mo., a staging area for the Federal Emergency Management Agency.

Kostinec, 40, a driver for Universe Truck Lines of Omaha, Neb., was happy to help. But at Carthage, instead of unloading, he was told to take his 2,000 bags of ice to Montgomery, Ala.

After a day and a half in Montgomery, he was sent to Camp Shelby, Miss. From there, on Sept. 8, he was waved onward to Selma, Ala. And after two days in Selma, he was redirected to Emporia, Va., along with scores of other frustrated drivers who had been following similarly circuitous routes.

At Emporia, Kostinec sat for an entire week, his trailer burning fuel around the clock to keep the ice frozen, as FEMA officials studied whether supplies originally purchased for Hurricane Katrina might be used for Hurricane Ophelia. But in the end, only three of about 150 ice trucks were sent to North Carolina, Kostinec said.

So on Sept. 17, Kostinec headed to Fremont, Neb., where he unloaded his ice into a government-rented storage freezer the next day.

"I dragged that ice around for 4,100 miles, and it never got used," Kostinec said.

To be sure, IAP can't be held entirely responsible for FEMA bungling, but the company is under increasing scrutiny for their role in the Walter Reed scandal. From the Army Times:

The committee wants to learn more about a letter written in September by Garrison Commander Peter Garibaldi to Weightman.

The memorandum "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,'" the committee's letter states. "According to multiple sources, the decision to privatize support services at Walter Reed led to a precipitous drop in support personnel at Walter Reed."

The letter said Walter Reed also awarded a five-year, $120-million contract to IAP Worldwide Services, which is run by Al Neffgen, a former senior Halliburton official.

They also found that more than 300 federal employees providing facilities management services at Walter Reed had drooped to fewer than 60 by Feb. 3, 2007, the day before IAP took over facilities management. IAP replaced the remaining 60 employees with only 50 private workers.

"The conditions that have been described at Walter Reed are disgraceful," the letter states. "Part of our mission on the Oversight Committee is to investigate what led to the breakdown in services. It would be reprehensible if the deplorable conditions were caused or aggravated by an ideological commitment to privatize government services regardless of the costs to taxpayers and the consequences for wounded soldiers."

According to the article, the privatization process began in 2000, and accelerated in 2002 "under President Bush's 'competitive sourcing' initiative."

IAP has been the target of criticism on other "competitive sourcing" initiatives, including a $103 million contract with the IRS:

The agency reports that it is planning to reduce a $103 million contract with IAP Worldwide Services, changing the plan to outsource its data collections from seven centers to just two.

The IRS said that the outsourcing was reduced to ensure "to ensure that a sufficient number of employees with the required training and security clearances are in place to manage the files during the upcoming filing season."


Colleen Kelley, president of the National Treasury Employees' Union (NTEU), chided the agency for contracting with IAP despite the fact that IAP recently admitted it would not have five of the original seven data centers ready by the beginning of tax filing season.

Kelley also criticized the agency for not performing better oversight of the contractors it works with, especially in terms of ensuring the privacy of individuals' Social Security numbers.

"For an agency like the IRS, with such a poor record of contractor oversight, these actions are virtually open invitations to disaster for taxpayers," Kelley said. (Hat tip: unbossed)

In addition to their involvement with Walter Reed, FEMA, and the IRS, the multi-talented IAP has also profited nicely from a number of lucrative contracts related to the War on Terror, according to the Center for Public Integrity:

IAP Worldwide Services began to participate in preparations for the war in Iraq as early as December 16, 2002, when a $7,750 task order was placed on a previously awarded contract with the U.S. Army Corps of Engineers for four-wheel drive vehicles and cell phones, at Camp Doha, Kuwait. The contract with IAP originally was signed in November 2002, as a one-year, indefinite delivery contract worth a maximum of $29.5 million, and with an option for an additional four years of service.


By September 22, 2003, the total value of task orders on the contract had reached $22 million-$14.3 million going to activities for the war in Iraq and $7.5 million to activities in Afghanistan-nearing the maximum $29 million contract allowance. On September 25, the Army Corps of Engineers announced that based on potential contingency requirements of the U.S. Central Command it was increasing the contract's maximum value by awarding a $494 million task order for the full five year life of the contract to rebuild Iraq's electrical system, including equipment, operations, maintenance, and training Iraqi Ministry of Electricity personnel. The increase brings the total value of International American Products contracts in Iraq to over $508 million. A USACE spokesman told the Center for Public Integrity that the $496 million increase was "a fully competed, best-value negotiated procurement." Reg Pelham, president of IAP, said that all contract information was "considered confidential" and declined to comment on any IAP contracts or media reports.

All of this suggests that having friends in high places is good for business. But the question remains, is it good for taxpayers, and more important, is it good for wounded American troops returning from Iraq? Hopefully, Congress will perform its long-neglected duty of oversight and provide the answers.