IAP Worldwide Services

IAP was founded in 1989 by former Army logistics officer Doyle McBride to provide non-military goods and services to the U.S. armed forces. These included food and power services as well as medical supplies, water purification systems, tents, construction supplies and a wide variety of everyday products. Based initially in South Carolina and known as International American Products, IAP first made its mark working for the Pentagon during the first Gulf War in 1991. When the U.S. military went to Haiti on a peace-keeping mission in 1994, IAP provided services ranging from laundries to recreational facilities.

The company did not rely entirely on Defense Department work. It also got contracts from federal and state agencies for disaster-relief services. The company’s taxpayer-funded growth attracted the attention of the giant hedge fund Cerberus Capital Management, which in 2004 purchased a majority interest in IAP.

In 2005 IAP acquired another outsourcing company, Johnson Controls World Services, and changed its name to IAP Worldwide Services. Johnson was a descendent of Pan Am World Services, a subsidiary of the now defunct Pan American airline that had been managing facilities (including the Cape Canaveral space launch complex) for the federal government since the 1950s.

The initial CEO of IAP Worldwide Services was Al Neffgen, a veteran of the larger military outsourcing company Kellogg, Brown and Root (KBR), then part of Halliburton. The post of chairman was held by Dave Myers, who had spent more than 25 years with giant engineering firms such as Fluor and the Washington Group. In August 2005 David Swindle, another former KBR executive, was appointed president of IAP.

IAP became one of the military’s main moving companies, wining a $225 million contract in 2005 to haul heavy equipment for the Army in Iraq and Kuwait. It also won other contracts for work in Iraq and Afghanistan, making it one of the largest contractors for the Pentagon in those theaters of operation, according to research by the Center for Public Integrity.

When Hurricane Katrina struck in 2005, IAP, which had previously been chosen by the Army Corps of Engineers as a prime contractor for disaster relief work, announced it was ready to act. About a week after the storm, the Federal Emergency Management Agency gave IAP an emergency contract to provide more than 200 million pounds of ice at a premium price. That turned out to be far more than was needed. FEMA cancelled some of the orders, but IAP ended up supplying 182 million pounds, much of which was put in storage freezers rather than being sent to the area affected by the hurricane. The company was awarded a new ice contract by the Army Corps in early 2007.

In late 2006 IAP went up against KBR in the bidding for massive Army logistics contracts to provide food and shelter for troops stationed overseas. After the Army snubbed it in favor of DynCorp, KBR and Fluor, IAP filed a formal protest with the Government Accountability Office. In October 2007 the GAO upheld the protest, forcing the Army to reopen the bidding. In the meantime, IAP had won a five-year, $388 million contract to provide air traffic services for the Navy.

In January 2008 Michael S. Williams, a former executive at Lockheed Martin and General Electric who had been one of the Cerberus representatives of the IAP board, was named IAP’s new chief executive. Cerberus (named after the three-headed dog which in Greek mythology guards the gates of hell) also controls companies such as Chrysler and GMAC Financial Services.