SNAFU

The U.S. Army recently discovered $900 million worth of spare Stryker parts, many of which are obsolete or unnecessary, collecting dust in a warehouse. None of the parts appear on the Army’s property books, a $900 million accounting error.

From Stars & Stripes:

Take, for instance, the $57 million worth of obsolete infrared equipment the Army has not installed in Strykers since 2007. It lingered at the Stryker warehouse until the Inspector General called attention to it last year.

Or, the 9,179 small replacement gears called pinions the Army bought as a temporary fix for a Stryker suspension problem that surfaced between 2007 and 2009. The Army took care of the root malfunction in 2010, but kept buying pinions.

It needed only 15 of the gears. The 9,164 extra pinions are worth $572,000, the Inspector General reported.

Dan Goure of the Lexington Institute, thinks it “much ado about nothing” because it’s “essentially miscommunication.” Miscommunication? Apparently, fighting a war and keeping good records are mutually exclusive tasks, never mind the fact that the Stryker Program Management Office wasn’t actually fighting a war, but rather working in an air-conditioned office in Michigan not balancing their books.

I understand that, given the size of DoD’s budget, this is essentially a rounding error. Maybe that’s because it’s too abstract. Using the DoD Comptroller’s FY2013 Program Acquisition Costs by Weapon System report, I calculated the per unit cost for weapon systems. Here’s a list of nicer things we could have had for $900,000,000:

2 Littoral Combat Ships
5 RQ-4 Global Hawks
11 F/A-18E Super Hornets
31 CH-47F Chinook heavy lift helicopters
45 MQ-9 Reapers
150 Strykers
562 Joint Air-to-Surface Standoff Missiles
600 Tomahawk missiles

Or we can put this accounting error in the context of total military expenditures by country.

1. United States $689 billion
2. China $129 billion
3. Russia $64 billion

72. Serbia $920 million
73. Stryker PMO accounting error $900 million
74. Slovenia $788 million
75. Bahrain $731 million

Goure’s comments are actually insightful in that they show at least some segment of the defense community believes this incident to be completely normal. The lack of accountability will reinforce the business as usual response. The Department receives and spends so much money, and it’s so complex that it’s hard to keep track. And it’s never been audited so it’s nearly impossible to identify how it (mis)spends money except in cases like this where the Inspector General stumbles upon it. Panetta ordered DoD to be audit ready by 2014, which should force some degree of accountability.

So before we follow the recommendations of those who think DoD needs even more money, or that we can’t afford to cut a single dime, perhaps we should ensure the Department knows how to spend the money we already give it.

This entry was posted in Analysis, Defense Acquisition, Military, Slightly Larger Arms. Bookmark the permalink.

10 Responses to SNAFU

  1. Pingback: Fun with additional SNAFU context » Gunpowder & Lead

  2. Total says:

    So before we follow the recommendations of those who think DoD needs even more money, or that we can’t afford to cut a single dime, perhaps we should ensure the Department knows how to spend the money we already give it

    Not a single dime more for defense until they figure out their accounting. Shut down the Pentagon!

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  8. An XO says:

    As someone who was moved to an XO position about a month ago and is just getting up to speed on how the Army deals with property at the Company level this surprises me not at all.

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