In April 2007, William Winkenwerder Jr. retired from his position as assistant secretary for health affairs at the Department of Defense, where he had been in charge of all military healthcare. On June 1, he went to work for a Wisconsin-based private contractor named Logistics Health Inc., which hired him to serve on its board of directors and "advise and counsel LHI on business development," according to a company press release. It was a hire that seems to have paid quick dividends.
On June 13, 2007, the Department of Defense began accepting bids for a contract to give soldiers medical and dental exams before they head off to war. Logistics Health was among the companies bidding on the contract, which was worth hundreds of millions of dollars over four years. Before he left the DOD, in addition to running military healthcare, Winkenwerder had also been in charge of the office that wrote the contract.
On Sept. 25, Logistics Health won the contract despite bidding $800 million, meaning it was not the low bidder. At least one other company bid $100 million less.
After objections by competing companies, the contract has now been "stayed," or put on hold, while the Government Accountability Office, the investigative arm of Congress, evaluates those complaints. At least one firm alleging unfair bidding practices has also asked congressional watchdog Rep. Henry Waxman, D-Calif., to investigate. But the contract may still be awarded to Logistics Health; the GAO will issue a decision by Jan. 14. The contract, which at one time was also going to benefit a second firm with its own revolving door to the federal government, exemplifies the culture of cronyism in privatized military healthcare. Military healthcare is a lucrative wartime bazaar for private contractors that is largely free of oversight -- and of Halliburton- or Blackwater-size headlines.
Monday, December 10, 2007