May 03, 2006
Jason Fornicola
(202) 639-6448

Congress Subjects Privatization Review at Walter Reed Army Medical Center to Additional Scrutiny

Washington—The base operations support services privatization review at Walter Reed Medical Center is receiving additional Congressional scrutiny. The review, part of the Office of Management and Budget’s (OMB) Circular A-76 initiative, has gone on for six years.

In a recent letter to Army Secretary Francis J. Harvey, U.S. Senators Paul Sarbanes (D-MD) and Barbara Mikulski (D-MD) highlighted the controversial and costly nature of privatization reviews. Specifically, they requested a list of all privatization expenses from June 2000 through the present related to the Walter Reed privatization review, “including but not limited to costs related to consultant services, training courses, travel, supplies, legal representation, and pro-rated salaries of all employees who have participated in the privatization review.”

Additionally, in a letter dated April 11, 2006 to Kevin C. Kiley, Commander of the U.S. Army Medical Command, Congressman Martin Sabo (D-MN) asked that contracting officials be sure that the installation had complied with a requirement in the FY06 Defense Appropriations Bill that prevents contractors from getting an unfair advantage in a privatization review's cost comparison process by providing inferior health care benefits. Sabo added, “The law requires that health care costs be excluded from the cost comparison process when a contractor contributes less than that which is contributed by DoD for the health care benefits of civilian employees.”

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.

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