Measure to block Walter Reed outsourcing fails in Senate

The Senate on Wednesday narrowly defeated a measure that would have blocked spending on a contract for operations support services at Walter Reed Army Medical Center, awarded following a long public-private competition process. But a key Senate supporter said she would continue to pursue the matter in conference.

In June, the House passed language similar to the defeated Senate measure, to keep the Army from moving forward with a plan to transfer work performed by about 350 federal employees to Cape Canaveral, Fla.-based IAP Worldwide Services.

The Senate amendment, presented by Sen. Barbara Mikulski, D-Md., during debate on the fiscal 2007 Defense appropriations bill, would have blocked spending on the contract already signed, though it would not have precluded the Army from carrying out a new public-private competition for the same work and would not have affected other ongoing or future competitive sourcing processes.

The Walter Reed competition has been criticized for its long duration -- it was launched in January 2000 -- and irregularities in post-bid contract revisions. Both the American Federation of Government Employees, which was involved in several protests, and contractor groups have said there were significant problems with the competition.

But after the Army denied a final employee appeal in March, a work plan was developed under which the contractor was slated to begin a transition phase in August and take over completely on Nov. 19.

In June, when the House passed its version of the bill with language to block the contract, Walter Reed Garrison Commander Col. Peter Garibaldi planned to continue with the transition, despite uncertainty over congressional intent. Plans included offering voluntary separation and retirement to affected federal employees.

But an Aug. 22 e-mail from Deputy Garrison Commander Stephen Brooks to employees said the handoff date would be pushed back due to a holdup in required congressional notifications. The Defense Department must inform Congress 45 days before issuing notices for a reduction in force, the message said, and RIFs cannot take effect until 60 days after the notices are issued.

According to the e-mail, Defense expected to provide that congressional notification sometime before Sept. 22, pushing the projected handoff date to late January or early February. Walter Reed officials were not available on Friday to respond to questions.

The delay would allow Congress ample time to resolve the differences between the House and Senate spending bills in conference. Congressional aides have indicated that a conference report on the defense spending bill could be filed as early as next week.

Mikulski, a member of the conference committee, said through a spokeswoman that she "was encouraged by the close vote, and will definitely fight for the language in the conference."

Jacque Simon, public policy director with AFGE, stressed the strong Senate support for the measure. She said the 48-50 split that defeated the amendment would have been a tie if two of the amendment's co-sponsors had not been absent.

The Contract Services Association, an industry group, expressed satisfaction with the Senate outcome. "In voting to defeat misguided efforts to overturn a fairly awarded competitive contract, the Senate took itself out of the contracting business -- and rightly so," said Chris Jahn, the group's president. Congressional interference "would completely undermine the competitive contracting process," he said.

Ironically, in light of the delay, Walter Reed may have to use temporary workers to continue operations until the matter is resolved. An e-mail obtained by Government Executive from the Army command to Garibaldi indicated that with some positions already vacant through early-out options, management would need to fill critical gaps using temporary or contract labor as a bridge.