Inconvenient News,
       by smintheus

Sunday, March 04, 2007

  What's behind the current mess at Walter Reed? Privatization.

It's a story that shirah has been chronicling for years at Unbossed: the outrages against decency and common sense that have been committed by Bush & Co. in the name of privatization. On Friday came word that the appalling conditions at the Walter Reed Army Medical Center are due in large part to the implementation of one such privatization scheme.

My commentary at Daily Kos about Walter Reed gained some attention on line this weekend. But so far, the news media have not generally acknowledged that privatization run amok provides the key to understanding what went so badly wrong there. This is a repost of that commentary, slightly revised and expanded, with the purpose of focusing more public attention on the issue of the insidious effects of privatization.


The damage to Walter Reed's mission by the privatization of services, and the harm that this would visit on the badly wounded vets treated there, was predicted in advance; it was resisted by Democrats in Congress; and it was catalogued as it unfolded. But to no avail. The Army barged ahead with the privatization anyway, the mission be damned. Hell, the vets be damned!

This is the imperative to privatize. Since 2002, it has been steadily sapping the ability of the federal government to do its job. It's just another side to the elevation of ideology over responsibility, which has become the hallmark of the Bush administration.

Shirah has posted two overviews of the battle for the privatization of Walter Reed, here and here, and they're excellent: I'll return to them below. More generally, I'll also describe how she has been covering the privatization beat and warning of exactly these kinds of government debacles.

The latest revelations

The House Committee on Oversight and Government Reform, chaired by the unstoppable Henry Waxman, uncovered the background to the scandalous living conditions of some vets housed at Walter Reed. It turns out that last September Garrison Commander Peter Garibaldi wrote a memorandum (PDF), describing how the imposition of a privatization plan upon Walter Reed was rapidly undermining the Center's ability to serve its patients. The memo was sent through (and presumably at the behest of) the then commander of Walter Reed, Maj. Gen. George Weightman, to the Army Medical Command. The Army Times has the story [with my editorial insertions, for clarity]:

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 [House] committee’s letter [to Weightman] 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.”...

During the year between awarding the contract to IAP and when the company started, “skilled government workers apparently began leaving Walter Reed in droves,” the letter states. “The memorandum also indicates that officials at the highest levels of Walter Reed and the U.S. Army Medical Command were informed about the dangers of privatization, but appeared to do little to prevent them.”

The memo signed by Garibaldi requests more federal employees because the hospital mission had grown “significantly” during the wars in Iraq and Afghanistan. It states that medical command did not concur with their request for more people [what must be an earlier request, already rebuffed].

“Without favorable consideration of these requests,” Garibaldi wrote, “[Walter Reed's] Base Operations and patient care services are at risk of mission failure.”

Another summary of the issues can be found at ABC's The Blotter.

On Friday the House Committee subpoena'd Weightman after the Army refused to permit him to testify—without offering "a satisfactory explanation for the decision to prevent General Weightman from testifying,” according to the Committee letter issued that day.


Parenthetically, I'd ask you to consider just how brazen the US military has become in stiff-arming investigations into wrong-doing. Earlier this week, it essentially blocked US District Court Judge Marcia Cooke's investigation into the conditions of captivity of Jose Padilla and his deteriorating state of mind. One of Padilla's guards, who'd observed his mental condition in captivity, a guard who had since been moved overseas, was scheduled to testify to the court by phone. However he wasn't on hand, somehow, when the phone call was placed.

And at the end of the week it refused to permit Waxman's Committee to hear testimony from the fired head of Walter Reed. You don't suppose that this kind of arrogant treatment of the other two branches of government is being rewarded by the Executive?


Anyway, according to the House Committee's letter to Weightman (PDF), signed by Henry Waxman and John Tierney, the privatization scheme in question involved a $120 million contract with IAP Worldwide Services, a company headed by a former Halliburton official, Al Neffgen. IAP took over "facilities management services" at the start of February, but even before the change-over fully 80% of the federal employees involved had left their jobs. Many of them apparently believed that IAP would fire the workers en masse. And indeed after IAP took over, they replaced all 60 remaining federal workers with a total of 50 private employees.

This is a sign of the degree to which the push to privatize federal jobs under the Bush administration had become something akin to a mania. From the Committee letter:

...the decision to privatize support services at Walter Reed led to a precipitous drop in support personnel at Walter Reed. Prior to the award of the contract, there were over 300 federal employees providing facilities management and related services at Walter Reed. By February 3, 2007, the day before IAP took over facilities management, the number of support personnel had dropped to under 60. Yet instead of hiring additional personnel, IAP apparently replaced the remaining 60 federal employees with only 50 IAP personnel.

The conditions that have been described at Walter Reed are disgraceful. 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...

“But the push to privatize support services there accelerated under President Bush’s ‘competitive sourcing’ initiative, which was launched in 2002. According to OMB, the goal of President Bush's competitive sourcing initiative was to allow the private sector to compete for nearly half of all federal jobs.

In September 2004, the Army determined that the in-house federal workforce at Walter Reed could perform support services at Walter Reed at a lower cost than the bid received from IAP Worldwide Services. IAP protested this determination. As a result of the protest, the Army Audit Agency was directed to reevaluate the bid from the federal employees. It has been reported that the Army Audit Agency withdrew its certification of the employee bid and unilaterally raised the bid by $7 million, thereby making the employee bid higher than the contractor bid. The Army then reversed its determination and resolved the [bidding] process in the favor of IAP.

You really will have to read the Waxman/Tierney letter in full. The details of this case are truly shocking, particularly the outright manipulation of the bidding process to favor IAP.

Background on 'Competitive Sourcing' and Bush administration privatization

The fight over the manipulation of the bidding process, and resistance to the contract because of the danger that privatization presented, continued throughout 2006. On Friday Shirah has posted a summary of the stages of the battle in 2006, by which this impending train-wreck at Walter Reed, so often predicted by responsible and informed people, eventually occurred: Walter Reed and Privatization - A Chronology of Shame. It's a must-read. On Sunday, she added further details: AFGE versus the Bush Privatization Machine. The fight was led among others by Eleanor Holmes Norton and the American Federation of Government Employees. But sadly despite several victories against the IAP contract, the military marched right ahead with the plan anyway.

I'll highlight one point touched on in shirah's Friday post that has perhaps great significance to the current investigation. In 2005, the Army command at Walter Reed tried unsuccessfully to block the manipulation of the contracting process. The AFGE stated in a press release:

Walter Reed employees, represented by the American Federation of Government Employees (AFGE), initially won the $120 million base operations support services contract in 2004. However, the Army failed to complete the privatization review in the time allowed by law. The Army tried to cancel the privatization effort, but DoD officials refused the request. Earlier this year, over the objections of Walter Reed managers, the Army reversed its earlier decision and awarded the work to a contractor.

The Waxman/Tierney letter is more specific about that attempt by the WR command:

Alan King, the Deputy Garrison Commander at Walter Reed, filed a protest of the contract award with GAO, but under the A-76 rules in place at the time, federal employees had no standing to object to A-76 determinations.

The Commander at Walter Reed at that time was Maj. Gen. Kenneth L. Farmer. Farmer was succeeded six months ago by MG Weightman...that is to say, after the Army had barged ahead with the privatization scheme despite all kinds of opposition to it. Heck, the House tried to strip funding for it just last June, though the Army secretary for Privatization and Partnerships was insistent on proceeding.

It's hard to see, then, why Gen. Weightman alone has been held responsible for this debacle. The train-wreck was well under way when MG Weightman came on board last August. All the alarms had already been sounded, and nobody in the Pentagon or White House seemed to care. MG Weightman tried in September, almost as soon as he assumed the command at Walter Reed, to ameliorate the impending disaster by hiring more staffers. Evidently the Army Medical Command turned down the request.

No doubt the determination of Bush & Co. to award this contract to IAP was based in part upon the number of former Halliburton and KBR employees running the company. Again, shirah has the details. There's more here, thanks to operculum.

On the absolutely notorious incompetence of IAP during the Katrina relief efforts, which the Waxman/Tierney letter mentions, see also this story from the WaPo


And what shocking contempt this episode betrays for the federal workforce. The idea that 300 skilled workers at Walter Reed could be replaced by a mere 50 private employees—merely because they work through a private contractor—is so ridiculous that it beggars the imagination. And yet it will come as no surprise to anybody who has been following Bush & Co.'s crusade for privatization.

Consider this report by shirah from January 2006: Call for Special Prosecutor to Investigate Veterans Affairs Spending. It begins...

John Gage, President of the American Federation of Government Employees (AFGE) has asked Attorney General Alberto Gonzales to appoint a special counsel to launch a criminal investigation into the Veterans Affairs Department's alleged misuse of federal funds for deciding whether to contract out work. Rather than spend money allocated for health care on health care, the VA is using the money to privatize VA operations.

She refers to a Dec. 2005 press release from AFGE, which specifies that the head of the VA had been warned repeatedly that its misuse of VA funds was illegal:

AFGE has made previous attempts to alert the VA of the violations. In July 2003, AFGE officials sent a formal Cease and Desist letter to Former VA Secretary Anthony J. Principi informing him that the VA’s actions were against the law. In November 2003, after learning that the VA management was once again using scarce health care appropriated funds to illegally perform outsourcing studies, AFGE again contacted VA officials and requested that they cease and desist from their illegal activities.

The VA’s actions have also caught the attention of the United States Government Accountability Office (GAO). Late last month, GAO issued the results of an investigation that verified the VA’s illegal use of funds appropriated for veterans’ healthcare. Despite these findings, and the AFGE Cease and Desist letters, the VA has denied any wrongdoing and has indicated it will continue with its illegal use of appropriated health care dollars to fund outsourcing studies.

The GAO report had in fact found that the VA was violating the law by spending money that Congress appropriated for VA care instead upon these studies of the potential for privatizing VA jobs.


Privatizing-mania, that's what it is. Nothing must get in the way of the imperative to privatize, certainly nothing as trivial as the wishes of Congress or the need for giving vets adequate medical care.

These privatization studies under Bush & Co. almost always lead to privatization schemes, whether or not the studies are adequately and honestly performed, or whether they point to likely substantial savings of federal dollars. That has been a theme of shirah's frequent reports at Unbossed on the documented effects of Bush's 2002 initiative, "Competitive sourcing".

One of the epi-phenomena of this privatizing mania has been the constant pressure placed upon political and even non-political appointees at the upper ranks to keep up a steady stream of new initiatives by which their own agency can ratchet up the privatization. For one thing, the administration created a web-based system by which agencies had to report how much "competitive sourcing" they'd accomplished—the Competitive Sourcing Tracking System.

Also, every year Bush & Co. rate the progress that federal agencies are making toward its goals, in a cheesy report entitled No Federal Agency Left Behind. It may not be coincidental that, as shirah reported in Dec. 2005 (Good Agency – Bad Agency), Bush & Co. ranked the DoD and the VA in late 2005 as two of those that were falling behind schedule in "competitive sourcing".

So the pressure was probably unusually strong in the DoD (as well as in the VA) in 2005 and 2006 to increase privatization. Hence the debacle at Walter Reed, as it unfolded, might well have been a lesser concern to Pentagon officials, than the need to win a "green sticker" from Bush & Co. under NFALB.


And it's not as if Bush & Co. have worried unduly about whether the contractors who replace federal workers actually do the job competently. If that hasn't become apparent to you, then you should check out shirah's report from July 2005, Failure is not an option. There is no position in government, no matter how specialized or critical, that this administration will not try to eliminate in favor of private contractors. Take for example this report from 2005 about the privatization of the EPA's primary enforcement lab, the National Enforcement Investigations Center in Denver.

It often has taken a monumental effort by federal workers, or the support of members of Congress, to block even the worst of the privatizing efforts, as shirah described a few months ago in Damming privatization.

One of the rare victories occurred with the Defense Appropriations Bill of 2005, when with bipartisan support provisions were introduced to rein in the frequently reckless and damaging practices of "Competitive sourcing" inside the Defense Department: Has Halliburton heard about this?


In short, the Bush administration has spent the last 5 years selling the citizens of this country down the river in the name of the half-baked ideology of privatization of government services. It can't be any surprise now that they've sold our country's wounded vets down the same river and for the same reason.

Slowly, those who've been fighting the good fight are gaining recognition for the merits of the battle they've been waging against this mania. The Walter Reed scandal should add some weight to calls for further investigations in Congress.

A special hat-tip to my colleague shirah, who has been unrelenting on this topic in posts at Unbossed going back several years. If you haven't been checking out her posts, then you'll want to start.


The reaction to the story I've sketched out above, among politicians and journalists, has been pretty underwhelming so far. Some of the news articles that appeared over the weekend essentially buried the lede, as for example reports in the NYT and

As for the administration and its apologists among the Republican Party, they've actually dared to try to stand the issue on its head—claiming that the failures at Walter Reed are representative of the inability of federal workers to deliver necessary services adequately. In this, Republicans have taken their lead from the President. Here is what George Bush had the gall to say on Saturday in his weekly radio address:

I was deeply troubled by recent reports of substandard conditions at Walter Reed Army Medical Center. Most of the people working at Walter Reed are dedicated professionals. These fine doctors, nurses, and therapists care deeply about our wounded troops, and they work day and night to help them. Yet some of our troops at Walter Reed have experienced bureaucratic delays and living conditions that are less than they deserve.

No, the vets are not suffering at Walter Reed merely because of "bureaucratic delays". The present scandal is due in large part to the fact that there aren't enough employees on hand to give them adequate care! The absent federal employees saw their jobs outsourced to a contractor with close connections to Dick Cheney--a contractor that manipulated the bidding to its own advantage then barged in unwanted and cut the payroll down to the bone. If only it were a question of "bureacratic" red tape, then the tape could be cut and the medical care delivered. But with nobody on hand to treat the vets, they are Strictly Out of Luck. Thanks to your ideology of privatization, Mr. Bush.

Crossposted from Unbossed

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