Security for the Homeland, Made in Alaska
By LESLIE WAYNE
Published: August 12, 2004
Full Article:
NY Times
As the Pentagon shipped thousands of
military police to Iraq over the last year, it had to move quickly to
replace guards at important installations around the country, including Fort
Bragg, N.C., and West Point. So it turned to the private sector and quietly
awarded multimillion-dollar contracts without putting out competitive bids.
The winners hailed from Alaskan corporations representing native tribal
groups that are uniquely eligible to win Pentagon contracts in unlimited
amounts without having to compete against other companies. But perhaps the
main beneficiaries were their minority partners, two big security firms,
Wackenhut Services and Vance International.
The Pentagon has made no public announcements of the contracts, in which the
joint ventures are being paid $194 million to protect 40 properties. If
options to extend them are exercised, the contracts' value could reach $500
million, according to Army documents obtained by The New York Times from
officials briefed on the arrangement.
So far, there have been no complaints about the performance of the private
guards, who have been moving on to Army bases over the last year to protect
gates and patrol grounds.
But the prominent roles of Wackenhut, which is working with an Alaskan
native corporation called Alutiiq, and Vance, a partner of the Chenega
Corporation, also of Alaska, have raised a variety of concerns, from the way
the contracts were awarded to questions about whether the established
security companies that are doing much of the work are appropriate for the
job.
"The intent of the law is to help minority businesses, yet these are major
corporations who wouldn't otherwise need help getting contracts," said
Danielle Brian, executive director for the Project on Government Oversight,
a Washington nonprofit group that studies military spending. "You have a law
that was set up to benefit native American companies."
The government's urgency was clear: 4,100 soldiers were to be shipped
overseas. They would be replaced by 4,385 private security guards. Beginning
in early 2003, the Army began to survey which bases would get the private
guards and approached the Alaskan companies and their partners, which
ultimately received the awards.
Military officials have told Congress that the no-bid arrangement was made
to get "boots on the ground" quickly in Iraq, according to one Army
document. The document also said that given the Iraqi call-up, "contract
security guards are a viable manpower option."
"The reason for the privatization of gate guards is to free up the
war-fighter from doing garrison support and do what they are trained to do,
which is go and fight," said Jerome Kelly, a spokesman for the Installation
Management Agency, a division of the Army that manages military bases. The
Army began to let the contracts in late 2003.
Besides the lack of competition, the awards have raised other concerns.
Government investigators have repeatedly cited Wackenhut for security lapses
at other federal installations it was hired to protect. And Wackenhut is
foreign-owned, which means it is prohibited from some sensitive post-9/11
security contracts like airport screening.
"There is an irony in that Wackenhut is foreign-owned and a lot of the
profits will be going overseas," Ms. Brian said.
Vance International has received several high-profile assignments, including
the Athens Olympics, as well as having received $1.1 million so far to
provide security for the Bush-Cheney campaign. The company was founded by
the former son-in-law of President Gerald R. Ford, Chuck Vance, who has
since left the firm.
"We have to be careful," said Representative Lane Evans, Democrat of
Illinois, who is investigating the arrangement. "This is a real vulnerable
area. We are awarding contracts to one company that has a really bad track
record and now they are being handed out on a nonbid basis. We want to make
sure no harm will be done."
In January, the inspector general of the Energy Department cited Wackenhut,
a subsidiary of Group 4 Securicor, which is based in London, for serious
improprieties in conducting antiterrorism drills at a Tennessee weapons
complex. It has been criticized in several other inspector general reports
for other security lapses in the last three years. The company contends that
the reports are misleading and inaccurate.
Even so, the concerns have stymied a similar no-bid deal involving the
Energy Department and the same contractors. A $40 million "sole source"
no-bid contract awarded to Alutiiq and Wackenhut earlier this year to
provide security at nuclear laboratories in Idaho was withdrawn following
opposition from the state's Congressional delegation.
"By joining up with Alutiiq, Wackenhut can get to sole-source work instead
of having to compete for it," said John Revier, a legislative director for
Representative Mike Simpson, Republican of Idaho. "Alutiiq had no experience
in the field, and we did not want to experiment when it comes to securing
nuclear material."
In the case of the military bases, critics also say that the no-bid process
lacks oversight and that the security companies involved are exploiting a
loophole that allows them to avoid open competition in a crucial area of
national security. Under the law, no Alaskan even has to be employed under
these contracts.
But the companies defended their role, saying they had helped fulfill a need
for security at a critical moment.
"The Army had a most severe problem," said James L. Long III, chief
executive of Wackenhut Services in Palm Beach Gardens, Fla. "You literally
had thousands of military police, national guardsman and reservists working
as gate guards. The military had to do something. So private security
companies can fill the void."
As for the government's criticism of Wackenhut, Mr. Long said, some of the
reports referred to parts of Wackenhut that are not handling the Army base
contracts. In addition, he said, Wackenhut was doing what it was told to do.
Vance International, a subsidiary of the SPX Corporation, a technology
company in Charlotte, N.C., dismissed criticism of its ties to Republican
political figures. The ties, said Nicolle Watson, a spokeswoman, "probably
had little or no relationship" to its success in landing the Pentagon
contracts.
Ms. Watson said Vance specialized in security for special events and had
worked for both the Republican and Democratic national committees. "We're
bipartisan," she said.
Federal procurement law requires "full and open" competition" for government
contracts, with some exceptions for small contracts awarded to minorities
and small businesses as well as in situations where there is insufficient
competition and only two or three bidders exist.
Contracts for 10 other military installations, including Fort Campbell in
Kentucky and the Anniston Army Depot in Alabama, were bid out competitively.
In all, 17 companies, including Wackenhut and Vance, bid for the business.
Both Wackenhut and Vance were among the losers on the contracts.
But in a growing number of cases, including Iraq, where Halliburton was
awarded a no-bid contract to provide a range of services, the absence of
competitive bidding has become subject to debate.
"What we are seeing with the no-bid Iraqi contracts is not an aberration,
but is becoming the norm," said Dan Guttman, a procurement expert at the
Washington Center for the Study of American Government at Johns Hopkins
University. "They always cite a short-term need for no-bid contracts. But in
the long run, you end up with no accountability, no oversight and no
alternatives if the performance is not good."
The Alaska native corporations that Wackenhut and Vance are working with
were created in 1971 to settle claims by Alaskan natives in the building of
the Trans-Alaska Pipeline and to help improve standards of living.
Senator Ted Stevens, the Republican chairman of the powerful Senate
Appropriations Committee, has long championed these corporations. After they
fell into financial trouble in the 1980's, Mr. Stevens pushed through
legislation giving the Alaska native corporations special benefits not
available to other minorities - mainly no limits on the size of the
contracts and no requirements that members of the minority group be hired.
Most federal minority set-aside contracts have a $5 million ceiling.
As a result, the corporations have flourished, with the money flowing back
to tribal accounts, where individual tribal members are the shareholders.
The Anchorage-based Chenega, for instance, said it had revenue of $233
million a year and a broad array of federal contracts, from construction
projects at military bases to information technology services for several
agencies
On the Army military base contracts, both Chenega-Vance and
Alutiiq-Wackenhut have been hiring local residents near the military
installations to be the guards. Under Pentagon rules, responsibility for
overseeing the contract rests with the Alaska native corporation and the
Pentagon has no legal relationship with either Vance or Wackenhut.
Federal rules require that 51 percent of the work be done by the Alaska
native corporation. While profit-sharing deals may differ, Mr. Long of
Wackenhut, said Alutiiq would receive more than 50 percent of the profit
with his company taking the remainder.
Jeff Hueners, chief operating officer of Chenega, said: "We are well into
executing our contract. Chenega had a security group as part of one of our
core lines of business. We knew Vance in the marketplace and so we made a
link with them.
"We are a professional services provider for the federal government," he
added, "and we are providing a high level of service under the contract.
It's good for Chenega and good for the government."
At the United States Military Academy at West Point, Alutiiq-Wackenhut has
been hiring from the local community, including many retired New York City
police officers, to protect the installation's 16,000 acres. According to a
West Point spokesman, Lt. Col. James Whaley, the new guards were "quite
talented" and "take pride" in their jobs.
At the Carlisle Barracks in Pennsylvania, home to the Army War College, a
spokeswoman, Lt. Col. Merideth Bucher, gave similar high marks to the
Alutiiq-Wackenhut guards.
"They are a very, very professional guard force," Colonel Bucher said. In
one case, when local police were engaged in a high-speed chase, the security
guards quickly installed barriers that prevented the vehicles from entering
the barracks.
|
|
