	Introduction

The Walter Reed Army Medical Center (WRAMC) was the subject of a controversy that called attention to several issues, including the policy and process governing the conduct of OMB Circular A-76 competitions, the state of the military health care system, and a planned Base Realignment and Closure (BRAC) action. A series of articles that first appeared in the Washington Post chronicled the dilapidated conditions and substandard outpatient treatment given to some returning veterans. Some media reports had suggested that one of the factors that may have caused or contributed to the substandard conditions, existing at some of the facilities at Walter Reed, was the push to privatize base support services. This report will examine the issues surrounding the WRAMC public-private competition conducted under OMB Circular A-76 and discuss some options that Congress may want to consider in its oversight role. 4986 , the proposed FY2008 NDAA, would impact the conduct of future competitions. The OMB Circular A-76, first issued in 1966, defines federal policy for determining whether recurring commercial activities should be performed by the private sector or federal employees. 5658 , the House-passed version of the FY2009 National Defense Authorization bill, has a provision (Section 2721) that would halt the closure of the Walter Reed Army Medical Center and discontinue the construction at the National Naval Medical Center and Fort Belvoir, VA of replacement facilities (beyond the construction necessary to complete the foundations of the replacement facilities) until the Secretary of Defense certifies to the congressional defense committees that each of the conditions imposed has been satisfied, and a period of seven days has expired following the date on which the certification is received by the committees. Another provision in the bill (Section 325) would temporarily suspend the conduct of future DOD public-private competitions (regarding the conversion of functions performed by DOD civilians to performance by contractors) from the date of the enactment of the bill until September 30, 2011. P.L. 110-181 , the FY2008 NDAA ( H.R. The bill contains several provisions that affect the conduct of future public-private competitions as described here. Others have questioned whether the desire to reach the Bush Administration's competitive sourcing goals overrode other considerations. The United States entered combat operations in Iraq in 2003. Possibly due to the Walter Reed controversy, the Army has announced its plan to cancel all future outsourcing contracts at military medical facilities for 2007 and 2008. Is A-76 inherently flawed, or is the Walter Reed situation an anomaly? While it may be unfair to generalize about all A-76 studies based on Walter Reed, it appears that the Walter Reed competition was poorly executed. Certain conclusions may be drawn from this competition. Some have suggested that the Army's constrained resources was the reason why repairs were not made to the reportedly substandard facilities at WRAMC. Congress may want to receive a quarterly update on the status of DOD competitions, to include the following information:
the number of older competitions under review, and whether these competitions have been granted waivers; the status of new standard multi-function A-76 studies, including how many competitions are in excess of the 12-months limitation, and how many have been granted waivers; the number of competitions that are in excess of 18 months, with or without waivers; the number of competitions in excess of 30-months, with or without waivers; and the demographics of the affected government employees in A-76 competitions, and whether any particular group of employees are adversely impacted by the A-76 policy, competition process or the final outcome. A-76:
The Office of Management and Budget A-76 circular provides for public/private competition for tasks that are not considered inherently governmental.
This report examines the issues surrounding the Walter Reed public-private competition conducted under Office of Management and Budget (OMB) Circular A-76 and its potential impact on future Department of Defense (DOD) competitions. Circular A-76 is a policy and a process first initiated in 1966 that was designed to determine whether federal employees or private sector contractors are best to perform activities deemed commercial. A series of articles that first appeared in the Washington Post chronicled the dilapidated conditions and the substandard medical treatment afforded to returning veterans. Media reports surrounding the competition have suggested that one possible contributing factor to the Walter Reed controversy was the decision to privatize base support services.
What caused the problems at Walter Reed? To what extent were the problems related to the A-76 competition? Did it go badly because A-76 is an inherently flawed policy, or was it a convergence of events? Should Congress draw any conclusions from the outcome of the Walter Reed competition for future competitions on military medical facilities? While it may be hard to draw conclusions of cause and effect, there may be lessons learned applicable to future competitions.
Some have suggested that constrained Army resources, due to a convergence of events, may have caused and/or contributed to the problems in the competition and led to the attrition of skilled base support services staff. Other factors that may have affected the process were the entry of the United States into combat operations in Iraq and Afghanistan, a 2005 Base Realignment and Closure Commission recommendation for the consolidation of Army and Navy military medical services into a single tertiary hospital at the campus of the Bethesda Naval Hospital (effectively closing the Walter Reed campus), a surge in the number of outpatient medical care visits for veterans returning from the war, and the Army's push to achieve the Bush Administration's competitive sourcing goals.
P.L. 110-181, the FY2008 National Defense Authorization Act (NDAA), includes several provisions that affect A-76 competitions. H.R. 5658, the House-passed version of the FY2009 NDAA, contains several new provisions which could impact the conduct of future competitions, including Section 321, which would limit the conduct of A-76 competitions to 540 days (about 18 months); Section 322, which would require the analysis and development of a single government-wide definition for the term "inherently governmental function;" and Section 325, which would temporarily suspend DOD A-76 competitions and prevent the conversion of civilian functions to performance by contractors.
This report will be updated as events warrant.