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Military hospital repair held up
Bureaucratic bickering, squabbles delay contract for maintenance at Walter Reed

By Donna Borak
AP Business Writer

WASHINGTON — An Army contract to privatize maintenance at Walter Reed Medical Center was delayed more than three years amid bureaucratic bickering and legal squabbles.

This delay led to staff shortages and a hospital in disarray just as the number of severely wounded soldiers from Iraq and Afghanistan was rising rapidly.

Documents from the investigative and auditing arm of Congress map a trail of bid, rebid, 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., a company with powerful political connections and the only private bidder to handle maintenance, security, public works and management of military personnel.

While medical care was not directly affected, needed repairs went undone as the staff shrank from almost 300 to less than 50 in the last year and hospital officials were unable to find enough skilled replacements.

An investigative series by The Washington Post last month sparked a furor on Capitol Hill after it detailed subpar conditions at the 98-year-old hospital in northwest Washington and substandard services for patients.

Three top-ranking military officials were ousted in part for what critics said was the Pentagon’s mismanaged effort to reduce costs and improve efficiency at the Army’s premier military hospital while the nation was at war.

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 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 and two years after the number of patients at the hospital hit a record 900.

“The Army unfortunately did not devote sufficient resources to the upfront planning part of this, and when you do that, you suffer every step of the way,” said Office of Management and Budget official Paul Denett.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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