Alaskan loophole for U.S. Army contracts

Alaskan loophole for U.S. Army contracts
Leslie Wayne NYT

International Herald Tribune
Friday, August 13, 2004
http://www.iht.com/articles/533784.html


As the Pentagon shipped thousands of military police officers to Iraq over the 
past year, it had to move quickly to replace guards at important U.S. 
installations, including Fort Bragg, North Carolina, and West Point, New York.

So it turned to the private sector and quietly awarded multimillion-dollar 
contracts without putting out competitive bids.

The winners were from corporations in Alaska representing native tribal groups 
that are uniquely eligible to win Pentagon contracts in unlimited amounts 
without having to compete with other companies. But perhaps the main 
beneficiaries were their minority partners, the security firms Wackenhut 
Services and Vance International.

The Pentagon has made no public announcements of these 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 U.S. 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 new private 
guards, who have been moving on to Army bases over the past 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 Chenega, also an 
Alaska-based corporation, have raised a variety of concerns, from the way the 
contracts were awarded to questions about whether the large 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. The law from which 
Wackenhut and Vance have benefited, Brian said, "was set up to benefit Native 
American companies."

The urgency of the matter was clear: 4,100 military personnel were soon to be 
shipped overseas and would be replaced by 4,385 private security guards. 
Beginning in early 2003, the Army began to determine which bases would get the 
private guards and approached the Alaskan companies and their partners, which 
ultimately received the contract 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 cited Wackenhut for security lapses at other 
federal installations that it was hired to protect. And Wackenhut is a 
subsidiary of a non-U.S. company, Group 4 Securicor, based in London, which 
means it is prohibited from some sensitive security contracts like airport 
screening.

Vance International has received a number of high-profile assignments, 
including the Athens Olympics, as well as having received $1.1 million so far 
to provide security for President George W. Bush's re-election campaign. The 
company was founded by a former son-in-law of President Gerald Ford, Chuck 
Vance, who has since left the company.

"We have to be careful," said Representative Lane Evans, a Democrat from 
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 for 
serious improprieties in conducting anti-terrorism drills at a weapons complex 
in Tennessee. It has been criticized in several other reports from the 
inspector general for other security lapses in the past three years. The 
company contends that those reports are misleading and inaccurate.

Critics also say that the no-bid process lacks oversight and that the security 
companies 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.

"The Army had a most severe problem," said James Long 3rd, chief executive of 
Wackenhut Services in Palm Beach Gardens, Florida. "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 criticism of Wackenhut, Long said, some of the reports referred to 
parts of Wackenhut that were not handling the Army base contracts.

Vance International, a subsidiary of the technology company SPX based in 
Charlotte, North Carolina, dismissed criticism of its ties to Republican 
political figures.

Those ties, said Nicolle Watson, a spokeswoman, "probably had little or no 
relationship" to its success in landing the Pentagon contracts.

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.

The New York Times

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