Military contractors are hard to fire

[David]

AP


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 right.

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 requirements.

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 audit.

"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."

[PatoLoco]

Unfortunately with government contractors it's usually a set time-line contract, vice product or service. I hired contractors (when I was active duty) and was screwed over (for a product), I refused to pay them 100 percent of the funds (paid 50% up front, and they didn't get anymore). In that case, yes, you can "fire" them....or at least refuse to re-hire them for additional work (that particular company went out of business shortly afterwards). Now, I am one of those slime-ball contractors and we were hired for a four year (service) contract. If we screwed up, or didn't provide the service up to standard, the government had the option every year (every April) to replace us. But, as the article implies, those types of contracts are rarely canceled or reviewed. It's too much work. Of course, MY company did a great job.....we went through the four years just fine and are coming up on renewal. Hopefully, the government continues to be happy with us...

[Gimpy]

It's been happening for several years now.

It seems that the current ascending idea among an overwhelming majority of the current republicans in power is that "government involvement or interference" with any business practice violates the "inviolable" so-called natural law of the marketplace.

Yeah right.......those "ascending ideas" have been working REAL WELL these past seven years, huh?

This is the "New Republican" mantra (actualy it's the OLD one, just more common place these days!)......It's been wholeheartedly promoted by George W. Bush, Dick Cheney, Donald Rumsfeld and their cohorts from the very beginning of their prominence in the political arena in this country.

It's practice has florished during the current Bush adminisration with its' defanging of the government watchdogs of not only environmental, consumer protection, FTC and FAA. But of corporate corruption, deception and outright FRAUD as well!

Their continued promotion/propaganda of the "privatization" of practically EVERYTHING, including, former responsibilities of our military forces, as well as education, prisons and many others were SUPPOSED to "save money" and "increase efficiency & performance"......

The distasteful results however have seen that BILLIONS of the PUBLICS tax paying dollars have flowed into private business without so much as a HINT of sufficient or accountable supervision!

This is the square-headed idealogical bull$hit that has led us into not ONLY the current economic crisis, but the crisis of the current MIS-mangement of "troop support" of our beloved troops in Iraq and Afganistan!

"Up-Armored" Humvees poorly constructed, piss-poor body armor, empty privately held gasoline trucks going back and forth across miles of desert with U. S. Army convoys protection that endangered the very lives of our troops for nothing but KBRs' greedy attempts to defraud the government (check it out, it HAPPENED!)... all for the ALMIGHTY DOLLAR!----And, even though KBR (a subsidiary of Halliburton) was found GUILTY of this----NOT ONE SINGLE DOLLAR of any type of "fine" was imposed or collected by our DoD?

Guess Rumsfeld thought it was OK, huh?

These folks now in "power" have been the PROBLEM......NOT the solution.

Their "practices" and "programs" have brought nothing but disaster and economic ruin to the average working class American citizens!

That they clearly F--KED UP the processes of "military contracting" should come as no surprise whatsoever.

Gimp