Loading ...
Sorry, an error occurred while loading the content.

Military contractors are hard to fire

Expand Messages
  • Greg Cannon
    http://news.yahoo.com/s/ap/20080202/ap_on_go_ca_st_pe/iraq_contracts;_ylt=AsuIEEfay7AAX0Nb__cRNCgb.3QA Military contractors are hard to fire By RICHARD
    Message 1 of 1 , Feb 2, 2008

      Military contractors are hard to fire

      By RICHARD LARDNER, Associated Press Writer Sat Feb 2,
      6:00 AM ET

      WASHINGTON - ITT Federal Services International, a
      defense contractor hired to maintain battle gear for
      U.S. troops in Iraq, repeatedly failed to do the job

      Combat vehicles ITT declared as repaired and ready for
      action flunked inspections and had to be fixed again.
      Equipment to be sanitized for return to the United
      States was found caked with dirt. And ITT's computer
      database for tracking the work was rife with errors.

      Formal "letters of concern" were sent to the
      contractor. Still, the Army didn't fire ITT. Instead,
      it gave the Colorado Springs, Colo.-based company more
      work to do. Since October 2004, ITT has been paid $638
      million through the Global Maintenance and Supply
      Services contract.

      The Army's ongoing arrangement with ITT, detailed in
      an audit from the Government Accountability Office,
      shows how captive the military has become to the
      private sector for overseas support. Even when
      contractors don't measure up, dismissing them may not
      be an option because of the heavy pace of operations.

      Sen. Claire McCaskill, D-Mo., co-author of legislation
      creating a special commission to examine wartime
      contracting, said poor-performing contractors are more
      likely to get bonuses than to be penalized.

      "It has just been a mess," McCaskill, a former state
      auditor, said in an interview with The Associated
      Press. "It's bad enough how much this war is costing.
      But it's heartbreaking the amount of money that has
      just gone up in smoke."

      In ITT's case, there were too few soldiers to handle
      the maintenance duties and no other contractors ready
      to step in quickly, according to Redding Hobby, the
      Army Sustainment Command's executive director for
      field support operations.

      "I'm not sure that our manning levels would have
      allowed us to do anything except wring our hands and
      worry and work people harder and work people
      overtime," Hobby said in a telephone interview.

      In a brief statement, ITT said it objected to the
      GAO's conclusions and has "taken numerous corrective
      actions." The company also said it has met the Army's

      Contract personnel working for the Defense Department
      now outnumber U.S. forces in Iraq and Afghanistan;
      there are 196,000 private-sector workers in both
      countries compared to 182,000 troops.

      Contractors are responsible for a slew of duties,
      including repairing warfighting equipment, supplying
      food and water, building barracks, providing armed
      security and gathering intelligence.

      The dependence has come with serious consequences.

      During a congressional hearing on Jan. 24, Jack Bell,
      a senior Pentagon acquisition official, called the
      situation "unprecedented" and one "that, frankly, we
      were not adequately prepared to address."

      A shortage of experienced federal employees to oversee
      this growing industrial army is blamed for much of the
      waste, fraud and abuse on contracts collectively worth
      billions of dollars.

      "We do not have the contracting personnel that we need
      to guarantee that the taxpayer dollar is being
      protected," said William Moser, the State Department's
      deputy assistant secretary for logistics management.

      "We are very, very concerned about the integrity in
      the contracting process," added Moser, who appeared at
      the same hearing as Bell. "We don't feel that we've
      had major scandals up to now, but we don't feel like
      that we can continue in the same situation."

      The office of the Special Inspector General for Iraq
      Reconstruction has 52 open cases related to bribery,
      false billing, contract fraud, kickbacks and theft; 36
      of those cases have been referred to the Justice
      Department for prosecution, according to the inspector
      general's office.

      The Army Criminal Investigation Command is busy, too.
      The command has 90 criminal investigations under way
      related to alleged contract fraud in Iraq, Kuwait and
      Afghanistan, according to spokesman Chris Grey. Two
      dozen U.S. citizens have been charged or indicted so
      far — 19 of those are Army military and civilian
      employees — and more than $15 million in bribes has
      changed hands, Grey said.

      To deal with the problem, the Army is implementing
      many of the recommendations of a blue-ribbon panel
      formed last year to reform contracting procedures. The
      most significant are the creation of a contracting
      command to be led by a two-star general and the
      addition of 1,400 acquisition personnel.

      David Maddox, a retired four-star general who served
      on the panel, said the Army understands the need to
      change. He's less sure the message has spread
      throughout the Defense Department. That's necessary to
      drive the broader changes needed to curb future
      problems in defense contracting.

      "The Army is moving out," Maddox said. "I'm a little
      more concerned with the degree DoD is moving out."

      The audit by the GAO, Congress' investigative arm,
      does not say there were any improprieties stemming
      from the ITT contract. Rather, neither the contractor
      nor the government were ready for the demands placed
      on each.

      At one point, although the Army had documented several
      incidents of poor performance, ITT was paid an
      additional $33 million to overhaul 150 Humvees a
      month. Over a nearly yearlong period, the contractor
      never came close to meeting the mark but still got the
      money, according to the GAO.

      Many of the problems occurred in 2005 and 2006, when
      the insurgency in Iraq was at its height and there was
      a heavy burden on the contractor to get equipment back
      into the fight as quickly as possible, according to
      Hobby, the Army Sustainment Command official.

      The terms of the contract called for ITT to be
      compensated for all labor costs. That meant the
      company was often paid twice to fix equipment it
      didn't repair correctly the first time.

      "Although it sounds bad economically, back at the time
      we were trying to (implement) a repair program that
      would maintain equipment for our soldiers, and that
      was a good alternative," Hobby said of the ITT
      contract. "It was expensive. We knew there were risks
      there. And, quite frankly, we didn't have the
      government (personnel) in place to ensure success. But
      we've learned an awful lot of lessons from this."

      The ITT contract and other similar support
      arrangements will be changed so a company's profits
      are linked to performance, Hobby said.

      "We are transitioning to a contract that gives an
      incentive to the contractor," Hobby said. "Our
      argument would be, 'We paid you to fix these vehicles,
      they didn't get fixed on time, so you lose your award
      fee.' A penalty, so to speak."

      ITT's performance has improved substantially, Hobby
      said, and the Army will decide in the next few months
      whether to extend the arrangement for another year.

      Still, he doesn't diminish the gravity of the GAO's

      "I think if Joe Sixpack or Sally Homemaker read that
      report, they would probably have the same feeling,"
      Hobby said when asked why ITT's contract was not
      terminated. "I share your pain."


      On the Net:

      Army Sustainment Command: http://www.aschq.army.mil
    Your message has been successfully submitted and would be delivered to recipients shortly.