Published on Thursday, August 12, 2004 by the Los Angeles Times
Army Turns to Private Guards
The military is criticized for risking security at bases and for a process that awarded $1 billion in contracts without competitive bidding.
by T. Christian Miller
WASHINGTON — Stretched thin by troop deployments in Iraq and Afghanistan and security needs at home, the Army has resorted to hiring private security guards to help protect dozens of American military bases.
To date, more than 4,300 private security officers have been put to work at 50 Army installations in the United States, according to Army documents obtained by The Times.
The work was awarded to four firms — two of which got the contracts without having to bid competitively. The contracts are worth as much as $1.24 billion.
The Army says the maneuver lets it free up more soldiers for military duty while quickly putting private guards in place to meet the need for additional security since the Sept. 11 attacks.
But the Army's action has drawn criticism on two grounds: that it compromises domestic military security, and that it amounts to abuse of a law intended to aid impoverished Alaska Natives.
Two five-year contracts worth as much as $1 billion went to two small Alaska Native firms with little previous security experience. The firms, which operate under special contracting laws enabling them to avoid competitive bidding, subcontracted part of the work to two of the country's largest security firms: Wackenhut Services Inc. and Vance Federal Security Services.
Thirty-six bases are covered by the Alaska Native contracts — including three in California: Ft. Irwin, the Sierra Army Depot and the Presidio of Monterey.
"I'm concerned about the protection of our military facilities," said Rep. Lane Evans, an Illinois Democrat who serves on the House Armed Services Committee and has called for hearings on the contracts.
"Some of these installations house chemical weapons and intelligence materials and should not be compromised with questionable contracting processes and poor security."
Democrats, watchdog groups and independent contracting experts said that the Army's contracting arrangement with the Alaska Native firms amounted to a back-door deal to send taxpayer dollars to Wackenhut and Vance, which lost out the only time they faced open competition against other companies for the security contracts.
"It's a total abuse of the intent of the law," said Danielle Brian, the executive director of the Program on Government Oversight, a watchdog group. "The law was designed to benefit companies that need a special boost. At the end of the day, if Wackenhut is benefiting, it's just a blatant abuse of the system."
The move is part of a larger trend of hiring private contractors to do many jobs previously done by the military. Since the war in Iraq, the shift toward private contractors has accelerated. Private companies now do everything from washing soldiers' laundry to protecting senior American officials from attack.
At Army bases in the United States, officials said that security requirements arising from the Sept. 11 attacks had forced them to use thousands of active duty and reserve units to set up additional patrols and guard posts.
Defense officials saw private security guards as a way to perform the additional security duties, free up more soldiers to fight in the field and make it possible for reserve units to return home when their service commitments expired.
Defense Department officials first had to lobby Congress to lift a nearly 2-decade-old federal ban on hiring private security guards at military bases. The ban was enacted after government unions said they feared losing nonmilitary Defense Department guard jobs to private companies.
Army officials said that by the time Congress acted, they didn't have enough time to mount a full and open bidding competition for the work.
The ability to award contracts to Alaska Native firms without any competition enabled the Army to quickly install private security guards. The Army decided in July 2003 to issue contracts to two firms, each with a cap of $500 million over five years.
Wackenhut's partner is the Alaska Native firm Alutiiq Security and Technology, based in Chesapeake, Va. The other Alaska native firm, Chenega Technical Products, based in Panama City, Fla., subcontracted to Vance.
At about the same time it awarded the Alaska Native contracts, the Army also decided to issue two more contracts to provide base security through typical open competition. The Army said it had more time for the second round of contracts, which were awarded in September 2003.
In that competition, Wackenhut and Vance entered the bidding but lost to other companies, the Army documents showed.
The two winning companies, Coastal International of South Carolina and Akal Security of New Mexico, were given $74 million worth of contracts to guard 12 bases.
The Army said that the private guards have performed well, and were trained to the same standards as Defense Department civilian guards, who work at Army bases along with military police officers.
"The overall performance of the [security guard program] has been excellent and to the standards of the contract," the Army said in a written response to questions from The Times.
The private security firms also dismissed the complaints.
Wackenhut said the criticisms were part of a labor battle against the company involving one of the country's largest service unions, Service Employees International Union, which wanted to unionize Wackenhut guards.
Alutiiq said its performance rating justified the Army's decision.
The firm's previous security experience consisted of fielding a 120-man private police force for Kwajalein Atoll, a missile test site in the South Pacific.
"We are paying [our guards] a little higher. But we're getting quality performance as a result. You get what you pay for," said Bruce Swagler, the head of Alutiiq's security program. "Quality-wise and performance-wise, as far as the government is concerned, we're doing a great job."
After hearing about the Army's interest in hiring private security guards, company officials said Alutiiq and Wackenhut pitched their partnership: Alutiiq provided the contracting speed, and Wackenhut provided the experience. The two firms jointly recruit the guards, 51% of whom become Alutiiq employees and 49% Wackenhut employees as set out in the contract.
Alutiiq said that as far as it knew, one of its guards was an Alaska Native.
"When it was clear that the Army needed to do something and do it quickly, we believed it was headed toward Alaska Native corporations,"' said James L. Long, the president and chief executive of Wackenhut Services, a subsidiary of Wackenhut. "We made it clear to the Army that we had a relationship with Alutiiq and Alutiiq made sure that the Army knew they had a relationship with Wackenhut."
Alaska Native corporations — sometimes called "Stevens Act" corporations because the firms were strongly supported by Sen. Ted Stevens, the Alaska Republican who headed the chamber's Appropriations Committee — were created in 1971 as part of a settlement of land claims with Alaskan tribal groups.
Small businesses belonging to such corporations can receive no-bid contracts of unlimited value, an advantage not enjoyed by other types of businesses. And though Alaska Natives must own the company, tribal members do not have to do any of the work, meaning the firms can subcontract work to other companies.
The reasoning was that profit generated by the firms returned to impoverished Alaskan tribes, which could use the money to pay dividends or set up scholarship funds.
Although dividends in some years have been more than $50,000 per shareholder, they more typically amount to a few thousand dollars.
The military guard contracts awarded to Alutiiq and Wackenhut so far total $90.4 million to guard 16 bases, while Chenega and Vance have received contracts worth $89.9 million to guard 20 bases.
Because Wackenhut and Vance lost to other companies when faced with competitive bidding, contracting expert groups questioned whether the Army was paying too much for the no-bid contracts.
Steven Schooner, a contracting expert at George Washington University's Law School, said the Army's actions showed a lack of planning.
"If it's true that [Alaska Native corporations] are getting contracts of staggering volumes solely for the purpose of avoiding competition or being a funnel to the same firms that should be otherwise competing for the work it's offensive," Schooner said. "It's ridiculous."
Unions and watchdog groups have raised concerns about Wackenhut's and Vance's performance on other contracts.
Unions have attacked Vance for acting aggressively against striking workers in situations where the company has been hired to protect factories and work sites.
Wackenhut has been accused by unions and government officials of allowing lapses in security at the nation's nuclear plants, many of which employ Wackenhut guards.
A Department of Energy report this year by the inspector general said current and former security guards at Oak Ridge nuclear weapons complex had complained that Wackenhut manipulated the results of drills by altering testing equipment and passing information to low-ranking guards prior to simulated attacks.
"It seems really irresponsible to have Wackenhut, which was found to have cheated on government security tests, doing security work at U.S. military bases," said Stephen Lerner, the director of the security division at the Service Employees International Union, which maintains a website critical of Wackenhut.
"This isn't about mowing the lawn. This is about guarding places that are potential terrorist targets."
Wackenhut defended its performance, noting that it continued to receive work from the government. It also said that the inspector general's criticisms were directed more at the Department of Energy than at Wackenhut.
"We do what we're told to do. We do what we're contracted to do," Long said.
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