Armored Vehicles Chronically Late
Thursday, July 12, 2007
The Pentagon inspector general's office has found that a program to deliver special armored vehicles to protect military personnel in Iraq from roadside bombs has been marred by delays and questionable contracting practices that may have endangered troops.
The office examined $2.2 billion worth of contracts for armored vehicles and kits to upgrade them, according to a report made available to The Washington Post yesterday. Investigators found, among other things, that the Marine Corps issued $416.7 million in sole-source contracts to Force Protection of Ladson, S.C., for armored vehicles. A sole-source contract is a deal awarded without competitive bidding, usually because the Pentagon determines the firm is the only one able to deliver a service or because it needs an item quickly. Yet the report found that Marine officials knew of other potential bidders and that some advocates of competition were overruled.
The contracts continued even though Force Protection "did not perform as a responsible contractor and repeatedly failed to meet contractual delivery schedules for getting vehicles to the theater," the report said. Under one contract issued in 2005, Force Protection failed to deliver 98 percent of 122 mine-resistant vehicles on time despite getting $6.7 million from the Marines to upgrade its production facilities.
The report, signed by Richard B. Jolliffe, assistant inspector general for acquisition and contract management, also found that a subsidiary of Armor Holdings of Jacksonville, Fla., was late delivering some crew-protection kits, which are added to vehicles' windows and doors, and provided others with missing and unusable components. The delays, including reinstalling the kits, "all resulted in increased risk to the lives of soldiers," according to the report, which is to be delivered to Congress today.
"With all Americans, we're disappointed in the report findings," Michael M. Aldrich, a vice president of Force Protection, said in a written statement. The delays do not reflect the performance of the vehicles but show "that even a minor glitch in the supply chain can push things back under such tight parameters," he said. According to the report, soldiers said the vehicles performed well and saved lives.
Armor Holdings spokesman Michael Fox declined to comment because the company had not had a chance to review the report.
The report covers some of the military's early efforts to combat roadside bombs, the biggest killer of U.S. troops in Iraq, by quickly delivering heavily armored vehicles, including some specialized vehicles known as Mine-Resistant Ambush-Protected, or MRAPs.
"I want to know if there is more influence-peddling involved" in awarding the contracts without competition, Rep. Louise M. Slaughter (D-N.Y.), who requested the report, said in an interview. "We have to make sure a lesson was learned here."
In a response included in the report, the Marine Corps said that the contracts were "executed within the law, spirit, and intent of the current acquisition rules" and that the prices were fair. The delivery delays were "not unexpected given the urgent nature of the action and the fact [the Marine Corps] was trying to procure and field a complex, new vehicle system without the benefit of a lengthy and costly development phase."
The inspector general also said the Marine Corps' justification for not holding competitions for the Force Protection contracts was questionable. It is not clear that a competition would have delayed delivery and raised costs as the Marines argued, the report said.
Force Protection continually failed to deliver vehicles on time even after the Marines gave the company money to upgrade its facilities. Of the 233 vehicles ordered from Force Protection, 60 percent were more than 30 days behind their original schedule, the report said. But under one of the contracts, the Marines declined to collect late fees that would have totaled $6.6 million because the contractor had "cash flow problems" and collecting the money would have caused the company "financial difficulty."
"Had Marine Corps officials provided the [extra money] to a competitor, the competitor may have been able to provide vehicles on an expedited schedule," the report said.
The report also found that Armor Holdings, which has provided armor for military Humvees, received $1.8 billion in sole-source contracts through two subsidiaries. But one of the subsidiaries, Simula Aerospace and Defense Group, was not a "responsible prospective contractor," partly because it did not have necessary quality assurance measures in place.