The M1126 Stryker Interim Combat Vehicle is a Twenty-First Century combat personnel transport for U.S. Army Brigade Combat Teams. It is notable for the number of configurations being produced. The U.S. Army lists two main variants, the Infantry Carrier Vehicle (ICV) and the Mobile Gun System (MGS). However, the ICV has eight configurations, including: Reconnaissance Vehicle (RV), Mortar Carrier (MC), Commanders Vehicle (CV), Fire Support Vehicle, (FSV), Engineer Squad Vehicle (ESV), Medical Evacuation Vehicle (MEV), Anti-tank Guided Missile Vehicle (ATGM), and NBC Reconnaissance Vehicle (NBCRV).

We call it a Twenty-First Century combat vehicle because of its history. That history also illuminates its production challenges, as well as the challenges associated with maintenance and repair of the Strykers in the field. We quote—

The Stryker family of vehicles acquisition program began before the events that would lead us to war in Iraq and Afghanistan. As a part of acquisition reform, the Stryker vehicle was a nondevelopmental item, lending itself to a performance-based logistics approach through the use of CLS [Contractor Logistics Support] because the technical data for the vehicle were not readily available. PMO Stryker stated that the pace of acquisition became an extremely rapid effort that took 31 months from contract award to the initial operational deployment in Iraq.

In addition to the rapid effort, the Army’s deployment needs created complexities requiring concurrent development and production of a common chassis for the 10 original Stryker variants before completion of production verification testing.

Additionally, the program had little operational tempo data from garrison deployments that could be used to identify performance-based logistics metrics for deployment, as well as the first brigade deployment to Iraq, which included CLS, that was in October 2003. This escalated to three Stryker brigades deployed to Iraq in 2006, that required sustainment for 2 years. As brigades were eventually redeploying from Iraq, other brigades were deploying to Afghanistan. The Stryker brigades were now spread across two operational theaters with differing environments, operational tempos, and threats.

Metrics gathered from one theater were not applicable to the new theater. The new threat in Afghanistan led to an urgent requirement to change the design of the flat-bottom Stryker vehicles to a more survivable double-v hull model. Design, test, production, and fielding were accelerated to get this new design into the hands of the soldier within 18 months. This added another new complexity to fleet support as both flat-bottom and double-v hull vehicles required support. The Army deployed a second Stryker brigade to Afghanistan, requiring additional CLS support. The double-v hull vehicles increased the variants to 17, which caused additional development, production, and sustainment complexities. The deployed fleet increased operational miles 10-fold from when fleets were in garrison/peacetime deployment. The operational environment, tempo, objectives, deployment, and utilization plans were all fluid as the threat would change in theater, creating a higher level of complexity for identifying performance-based logistics metrics.

[Emphasis added.]

The foregoing history is quoted from a recent DOD Inspector General report reviewing issues associated with the logistics support for the Stryker PMO. The CLS is provided by General Dynamics Land Systems, who was also the Prime contractor for production. GDLS seems to be doing a bang-up job with respect to CLS—despite the huge challenges described above by the DOD IG—because (according to the DOD IG) it is achieving an operational readiness rate in excess of 96 percent—far in excess of the readiness goal of 90 percent.

So that part was working quite well but, nonetheless, the DOD IG managed to find other issues to squawk about. It reported that the PMO Stryker team “did not properly account” for nearly 20,000 line items of Government property being managed by GDLS, which had a value of nearly $900 million. To be clear, these were property items that had been acquired by GDLS and were being managed by GDLS in the Government-Owned, Contractor-Operated (GOCO) Stryker warehouse, located in Auburn, Washington. According to the DOD IG—

The warehouse has about 700,000 square feet of internal storage space and 30,000 square feet of external storage space. General Dynamics’ personnel receive, store, manage, and issue Stryker inventory for a variety of Stryker efforts, including CLS, battle damage assessments and repairs (BDAR), Reset, and retrofit. … General Dynamics also managed two other Stryker inventory wholesale warehouses at its London, Ontario Canada, facility and the GOCO European Distribution Center in Germersheim, Germany.

GLDS performs its CLS responsibilities under a 6 year CPFF contract valued at roughly $1.5 billion. The DOD IG stated—

General Dynamics is responsible for performing scheduled and unscheduled maintenance; requesting, receiving, storing, and issuing all Stryker vehicle spares and repair parts; and documenting all part consumption and vehicle repairs.

The inventory valuation problem stemmed from the fact that, when GDLS delivered the incoming parts and equipment to the GOCO warehouse, it was properly classified as “government property”—but the PMO Stryker team (i.e., the Government folks) incorrectly classified those inventory items as “contractor-acquired property (CAP).”

It’s a subtle difference perhaps best appreciated by a Government Property Administrator or contractor Property Manager. We’ll let the DOD IG explain the issue to you—

PMO Stryker relied on the CAP definition in FAR Part 45, Government Property,” which defines CAP as “property acquired, fabricated, or otherwise provided by the contractor for performing a contract to which the Government has title.” CAP business rules for cost-reimbursable contracts were generally designed to address “property acquired, fabricated, or otherwise provided by the contractor” that would eventually be delivered to the Government as part of a higher level end item, not as used by the Army on its logistics services contract with no end item deliverable.

While Stryker inventory consumed during the contract period of performance for the logistics services contract could possibly be considered CAP, the inventory identified in this report was from prior-year periods and needed to be officially delivered and accepted by the Army and accounted for as Government property. In regards to BDAR and Reset efforts, the situation was basically the same because both efforts had specific periods of performance so inventory not consumed during periods of performance needed to be officially delivered and accepted by the Army and accounted for as Government property.

[Emphasis in original.]

The end-result of the inventory nomenclature SNAFU was that “the Stryker inventory was not reported on either the contractor’s or the Army’s financial statements, resulting in no visibility of the Army assets (parts and value).”

Hey, no big deal. That was only $892.3 million that was not being reported on anybody’s financial statements. It’s not like that was a material amount of money, or anything.

When the DOD IG auditors pointed out the SNAFU to the Stryker PMO team, they got push-back. The PMO team’s position was that the property wasn’t delivered to the Government until the item in inventory “was placed on a Stryker vehicle.” In other words, the Stryker PMO team—including the DCMA representatives—believed that GDLS retained accountability over the inventory, because GDLS managed the inventory. They did not believe that the inventory was government-owned until it was installed on a vehicle.

The DOD IG didn’t buy that interpretation, responding—

… the Stryker inventory stored at the GOCO warehouse does not support the production of Stryker vehicles that are later delivered to the Army and accepted by DCMA. Instead, the Stryker inventory consists of spare parts that are used to sustain fielded Stryker vehicles for which the Army had already taken delivery. Therefore, based on the interpretation of the CAP guidance by PMO Stryker and DCMA officials, the Army will never take delivery of the Stryker inventory, assign the inventory a value, record it in an appropriate Army property accountability system, and recognize the inventory on the Army’s financial statements.

[Emphasis added.]

The DOD IG also asserted—

Although PMO Stryker and Army Contracting Command officials classified the Stryker inventory as CAP, the officials did not require General Dynamics to account for the inventory as CAP, follow guidance and accept delivery of CAP by contract line item where the material then becomes Government property, or identify the actual cost of the CAP inventory acquired on previous contracts and transfer the inventory cost to the current Stryker CLS contract.

The DOD IG’s point was, if the Stryker PMO team really thought that all that inventory sitting in the Government-owned warehouse awaiting installation on a military vehicle was, in fact, contractor-acquired property, then they blew the accounting and control there, too.

There was more to the audit report. The PMO Stryker team got gigged for some obsolete parts that should have been disposed of. (But how would they know the parts were obsolete, if they never recorded them in any Army inventory system? How would they dispose of obsolete parts that were never part of the official property records?)

Regardless of the Stryker property SNAFU and the fun of pointing out that nearly $900 of MILSPEC parts were sitting off record, awaiting a potential eBay auction, nobody should ignore the most important fact of this story. This is a very, very, complex fleet of vehicles—with a very challenging operating environment. And yet, despite all obstacles, the PMO Stryker team and GDLS managed to maintain a 96 percent vehicle operational readiness factor.

And that’s simply outstanding.

Sometimes we write a blog article and put it out there, and we know almost right away it’s a grand slam. The article hit count takes off, and the e-mails come in. Once in a while, the phone rings and somebody wants to argue a point. In one instance, a Fed-Ex package arrived with a letter in it, written by the investor relations lead of a corporation we had taken to task. On those days, we feel good. Love us or hate us: at least we know somebody is reading these posts and that we struck a nerve.

Sometimes we don’t publish any articles for a couple of days, and we get a few e-mails asking if we’re okay, encouraging us to keep putting finger to keyboard. And those feel pretty good, as well.

But sometimes we write a blog article and put it out there … and nothing happens. Sure, the hit counts rise—slowly, as would be expected simply from the length of time the post has been on the internet—but there’s no other sign that we did good. There’s simply no feedback, none at all. And on those days, we wonder why we bother.

Such was the case with our article on Better Buying Power 2.0. Indeed, most of our articles on the initiative to increase efficiency and affordability of the Defense Department have dropped into the pond with scarcely any ripples, despite our attempts to be all provocative and edgy, like pointing out how BBP 2.0 targeted two areas near to our heart—the competency of DCMA acquisition personnel and the backlog of audits at DCAA. Even when we assert—as we have—that the primary output of the BBP initiative is the creation of more bureaucracy, we don’t seem to be striking the right nerves.

Perhaps it’s simply because the DOD Leadership doesn’t read our blog?

Even so, it’s nice when somebody else seems to agree with some of our intentionally provocative and edgy assertions. Such as when J. David Patterson, Director of the National Defense Business Institute at the University of Tennessee, writes an op-ed piece in the November 26, 2012, edition of Aviation Week that tells readers that the people charged with implementing BBP activities are bureaucrats themselves. Thus: “People within bureaucracies perpetuate self-sustaining behaviors despite the benefits of refining processes.” In other words, major process improvements, such as BBP, do not result in reduced bureaucracy. Quite the opposite is, in fact, true. Major process improvements just result in more bureaucracy, because the bureaucrats seeking to implement the process improvements simply can’t help themselves.

We wish we could give you a link to Mr. Patterson’s piece—entitled “Fix Bureaucratic Behaviors First”—but we can’t, because of copyright restrictions. But suffice to say, Mr. Patterson pointed out that the primary output from the original BBP initiative was the addition of “16 tasks and reports.” Similarly, he pointed out that the BBP 2.0 memo “institutes new processes while not detailing procedures, reports or reviews to be eliminated.” He concluded that, despite the lofty objectives of BBP, “the processes are addictive.”

According to Mr. Patterson, this is the expected outcome. Looking at the history of acquisition reform, he concluded that it is the “cultural behaviors” of the Pentagon bureaucracy that has “impede[d] progress in improving the acquisition system.” When the bureaucrats are invited to implement new processes or refine existing processes, so as to increase efficiency—they simply can’t do it. The historical result of such improvement attempts has been almost the exact opposite of the intended objectives. He asserted that “Suborning people to processes results in the least-productive bureaucratic behaviors.”

If one wishes to truly streamline the existing processes and to reduce the existing bureaucracy, then one must first address the cultural issues, according to Mr. Patterson. He wrote, “Acquisition community leadership must address workforce behaviors to achieve concrete, productive reform in how the Defense Department buys weapons, equipment and services.”

If this is not done, “the defense acquisition system will not improve.”

To which we can only add—Amen, brother.