Quantico Tactical

Why Has Controversy Over US Army Rights To Use Scorpion Camouflage Led To A Quest for New Camouflage Printers?

To be sure, Operational Camouflage Pattern is the way ahead for the US Army. That fact is not at question and I’m very happy to see our Soldiers getting something effective. It is definitely an improvement over the Universal Camouflage Pattern that it is replacing.

But exactly what OCP is, and who actually owns it, are a bit more perplexing. With two distinct patterns sharing the same name, there’s sure to be some confusion. Turns out, ownership can be established based in records and a few pointed questions. But then there’s this whole printing issue that’s recently, and inexplicably come up. How that ties in, will all make sense, by the time you get to the end of the story.

As you know, the US Army selected the Crye Precision Multicam Pattern in 2010 and decided to call it Operation Enduring Freedom Camouflage Pattern, as it was intended specifically for use in operations in Afghanistan. Then, the Army began a Multi-year Camouflage Improvement Effort (aka Phase IV) that cost tens of Millions of Dollars and ultimately resulted in no new capability. During the Army’s rather protracted, ill-fated search, for a family of camouflage patterns for use in the world’s various operational environments, Congress decided to act, fearing waste. With the passing of the 2014 National Defense Authorization Act, the Defense Department had to stick with what whatever camouflage they already had. The Army reacted by renaming OCP to a simple “Operational Camouflage Pattern” to give it a more universal feel and started negotiations with Crye Precision to adopt the pattern service-wide. Unfortunately, the Army abruptly stopped talking to Crye Precision with the Army reportedly unhappy with the pricing provided by Crye.

20140802-183641-67001414.jpg

Then, in May of 2014, the Army’s leadership chose a course of action that would adopt a new flavor of OCP called Scorpion W2. It was a camouflage pattern created by modifying Scorpion, a developmental pattern designed in the early 2000s as part of the Objective Force Warrior Program and tested during the 2002-2003 camo studies. This new OCP variant also looked suspiciously similar to the existing Crye Precision MultiCam version of OCP. Interestingly, the Scorpion W2 pattern was tested for mere weeks before being certified fit for service, while the Phase IV testing went on for well over a year of actual testing and analysis with no final solution selected.

No sooner than the Army unveiled this variant did people start to question who “owned” the pattern. This was fueled partly by assertions by COL Robert Mortlock, Program Manager for Soldier Clothing and Individual Equipment that it would be less expensive than using MultiCam leading many to believe that the Army owns it. In fact, Scorpion W2 is a 2010 government modification of Crye’s patented Scorpion pattern and exhibits quite a bit of similarity to the MultiCam it is intended to displace as OCP.

To find the answer to the ownership question, I went to PEO Soldier, who’s Public Affairs Team directed me to the US Army’s Office of the Chief of Public Affairs. I asked some very specific questions about ownership of the Scorpion camouflage pattern and its use as a option under the NDAA. While they did reply in a timely manner, unfortunately, it wasn’t very forthcoming.

The Army possesses appropriate rights to use the Operational Camouflage Pattern (OCP) on its uniforms and equipment. Congress is aware of the Army’s intent and Army has been informed that it complies with the NDAA.

William J Layer
DAC, OCPA

From the response, we know this; the Army doesn’t own Scorpion W2. We asked specifically if they do. Rather than a simple, “We own it,” they instead claimed, “appropriate rights to use” the pattern.

The question then comes back to, who owns Scorpion? For that, we have to look at the Scorpion patent (USD487848), issued on March 30, 2004. This patent for a “Camouflage Pattern Applied To Substrate” was granted to Caleb Crye and assigned to LineWeight LLC, Crye Precision’s IP holding company. Later, after the patent was granted by the US Patent and Trademark Office, the Army asserted its “appropriate rights to use” Scorpion based on a correction letter amendment in June of that year:

After claim, insert the following:
–Statement as to rights to inventions made under federally sponsored research and development.
The U.S. Government has a paid-up license in this invention and the right in limited circumstances to require the patent owner to license others on reasonable terms (emphasis added) as provided for by the terms of contract No. DAAD16-01-C-0061 awarded by the US Army Robert Morris Acquisition Natick Contracting Division of the United States Department of Defense.–

The Army has never challenged the validity of the patent or who holds it. Not in 10 years. Instead, as is often the case with Federally Funded Research and Development, the Army had the USPTO amend the patent with that statement above. It is also important to note that this same amendment was applied to patents for all of the various technologies that spawned from the Scorpion effort, not just the camouflage pattern. Like I said, it’s pretty much boiler plate. Finally, it goes without saying that the Army does not enjoy this same position regarding the later MultiCam patent (USD572909).

The issue at hand is whether the Army has lived up to its end of the deal they applied to the patent. It reads, “paid-up license in this invention and the right in limited circumstances to require the patent owner to license others on reasonable terms.” As you can see, it’s not just enough to have established who owns what. We now have to take a look at whether the Army should be paying for the “rights to use” Scorpion. It seems that based on this language, they can use it as they see fit. I can see where they feel that this assertion would give the Army the right to have modified the base pattern to the W2 variant. But that only covers their use. The issue arises when they pay others to print it and that is what brings this last “reasonable terms” bit into question. Even in cases of “eminent domain” where private property is seized by the Government for use, they must always pay a reasonable fee for the value of the property. The Army isn’t printing the pattern. Instead they are purchasing material provided by vendors that incorporate the invention. This is where things get sticky because these private companies have existing agreements in place.

According to industry and government sources, the companies that are currently printing the Scorpion W2 fabric unto fabric are paying Crye Precision a royalty fee. Yes, for Scorpion. It has been an open secret in industry for some time. I’ve even alluded to it once or twice. The fee isn’t being paid because the Army is living up to the verbiage it had inserted into the patent, but rather due to commercial, contractual obligations between the printers and Crye Precision.

Those same sources who’ve indicated that the royalties are being paid have also said that there are those in the Army’s acquisition community who are incensed at the notion. And how much is this outrageous royalty? As I understand it, the Army is paying less than $1 per uniform. Ironically, this is a similar price to what Caleb Crye asserted the Army would pay for the use of MultiCam in a statement released earlier this year (less than 1% price difference between MultiCam and UCP).

How did this royalty come about? The answer is quite sublime. When the US Army selected Crye Precision’s MultiCam for use in 2010, they insisted that Crye license about 11 new printers to use the MultiCam pattern. Eventually, over time, these limited use licenses were converted to also cover commercial printing. The contents of the agreements, which remain confidential, I am told contain stipulations that the printer agrees to not print patterns with similar shapes or colors to MultiCam in order to discourage knockoffs. Seems reasonable to me that Crye Precision and a commercial printer would enter into a legally binding royalty agreement but this situation apparently has some in government hot under the collar.

Circumstances being what they are, the question of whether the royalty should be paid looks to have been answered. Contracts exist. The question has transformed to why the US Government is taking action that could be construed as to impede those contracts.

At least three times over the past month, DLA Troop Support and PEO Soldier have held private, by-invitation-only meetings with representatives from various parts of the supply chain to discuss the Army’s transition to the OCP Scorpion W2 variant. One important conversation point has been the royalty fee and if there is a mechanism to avoid paying it. Printers have been queried as to whether they would be willing to stop paying Crye Precision the royalty. Another suggestion has been that perhaps a printer could be purchased by a vendor or even a new one stood up that was unencumbered by any contractual obligations with Crye Precision. I am told that as these conversations were being guided by PEO Soldier, members of industry glanced nervously at one another wondering, “What’s to say they won’t turn on my company next?”

You could easily dismiss this information as hearsay, if it weren’t for a Sources Sought Notice released on 8 September, 2014 by the Defense Logistics Agency Troop Support entitled, “Operational Camouflage Pattern Fabric MIL-DTL 44436B Class 14“. In this FBO posting by the Defense Logistics Agency – Troop Support, they are looking “for printing capability and capacity of Operational Camouflage Pattern (OCP) on wind resistant poplin nylon/cotton cloth.” All-in-all, DLA needs about 6-9 Million Yards per year of OCP NYCO in order to manufacture enough Army Combat Uniforms. As if they didn’t already know, based on years and years of interaction with the supply chain, not to mention those numerous secretive meetings, they are trying to figure out who can print cotton here in the US. I’m not buying it.

A few very interesting things stick out in the Sources Sought. First, there’s these disclosures that potential offerors must comply with:

52.227-6 Royalty Information APR 1984

52.227-9 Refund of Royalties APR 1984

Those would be so they can identify who actually has a royalty agreement with Crye Precision although, as I understand it, the exact contents of those agreements are confidential, and could not be disclosed to the Government.

Another very curious statement caught my eye and made me realize that there was actually something to those clues I had been picking up.

This notice is intended to identify firms that either have the equipment or are willing to make capital investments to obtain the equipment necessary to support the aforementioned requirements. Warstopper funding may be available to firms needing to make some capital investments. (emphasis added)

The domestic printing industrial base has stayed fairly constant over the past 10 years and exists almost solely to support DoD’s Berry requirements. It’s more than held its own supporting military printing (of which the Army’s is the single largest user). If anything, that printing capacity has taken a beating over the past 18 months or so, as the Army has half-stepped toward a camouflage way ahead and they curtailed purchase of UCP ACUs. Now that the Army has decided what they are going to do, the existing printing industry should be more than ready to go to work. So why offer up taxpayer money to set up a new printer? What are they up to?

I looked into this “warstopper” funding program to see if there was a good reason. Here’s what I found:

The Warstopper Program was created to preserve and/or expand the industrial base for critical go-to-war items that had insufficient peacetime demands to keep the known industrial base producers in operation.

Since NYCO fabric is used for ACUs and the Army fights in FR uniforms, I have to question this notion of OCP printed NYCO being something that we need to stockpile as a nation. Then, there’s that whole existing supply chain infrastructure that seems to be able to hold its own.

So I dug more and found they’ve established criteria for commodities purchased with the program. Maybe those will hold the answer:

1. Mission Essential or Critical

2. Low peacetime demand but high wartime demand

3. Limited shelf-life

4. Long production leadtime

5. Cost effective alternative to War Reserve Inventory

No. In fact, peacetime or wartime, demand for NYCO remains constant and that fabric has a long shelf-life. None of those seem to apply.

Consequently, several questions come to mind. Why does DLA Troop Support want information on printers’ commercial royalty agreements? And, why do they want to establish new printers? Perhaps the current crop of printers aren’t suitable? If not, why? Wouldn’t it be less expansive and faster to help them come into compliance?

Doing the right thing is critical to the acquisition community. But it’s not just enough to follow the Federal Acquisition Regulations to the letter or to field great equipment. The end does not justify the means. Professionals must also avoid the appearance of impropriety. Unfortunately, as this story unfolded over the past couple of months, I’ve seen a lot of things happening that I’m concerned with; shake and bake testing, negotiations with IP owners breaking down, lack of transparency.

You should be concerned too and we deserve answers. We deserve to know why the Army and DLA are willing to invest taxpayer money in new printers that will compete with companies already struggling due to decreased government demand for their wares. We deserve to know why the Army and now DLA aren’t standing by the government’s own language by seeming to be interfere with private businesses negotiating “reasonable terms” with Crye Precision for the use of their Intellectual Property. Once again, I’ll echo a concern that has been voiced to me by members of industry, “If the Army can do this to Crye, what makes us think they might not do something to us later?”

I urge the Army and DLA to become more transparent in this process and explain why they have taken steps that appear to be made to avoid paying a company for the use of its intellectual property and why they are so interested in using taxpayer funds to establish new businesses in an already crowded space.

Tags: ,

107 Responses to “Why Has Controversy Over US Army Rights To Use Scorpion Camouflage Led To A Quest for New Camouflage Printers?”

  1. JB says:

    The people working at PEO Soldier are a bunch of scum bags with no honor. They need to be rounded up and thrown in jail. Disgusting.

    “why they are so interested in using taxpayer funds to establish new businesses in an already crowded space”

    Would anyone be surprised if these new businesses are owned by cronies of this lot?

  2. CAVstrong says:

    I was so excited when the news finally broke that they finally had a decision and we had a new camo pattern. Additionally I was very pleased with Scorpion W2, to me it seemed that a uniquely American Mylticam variant the we could use modify (bookends) and adopt DoD wide. As time goes on and the I initial thrill and novelty fades and start thinking more and more…. Let’s just adopt AOR or MARPAT and move on to other things like the GVC for a few years until there are truly dramatic advances in camo. This just serves to confirm my suspicion. Let’s adopt AOR and the NWU III or whatever DoD wife and be done.

    Seriously this is getting to the point where I want the DoD or congress (God Forbid) to step in and say that’s enough kids. This is your uniform and this is you camo and you’re gonna like it.

    SSD terrific story. Thank you for continuing to keep us informed…. Disheartening way to start the morning though.

  3. FHRITP says:

    Wow. Yall really went all out. Great article ssd. I know i lack the skills and know how to research all this on my own. Not to mention the patience.

    That being said its sounds like its getting worse before getting better. Hopefully the higher ups will pull it together and get us into a usable camouflage asap. I feel like they did this alot faster than what they were able to process and didnt give any room for the hiccups and x-factor. Hopefully they will stand by their words and let us use the stuff they issued for afghanistan. HOPEFULLY they will make it mandatory that we can wear it if we have it and take the decision completely out of all the hooah csm’s and commanders hands.

  4. mcs says:

    Brilliant investigative work, and some confounding suggestions brought to light by it.

    I think the real elephant in the room is the unreleased results of the now several year old CIE trial. If the results were to indicate a clear winner, it would lay bare whatever intrigues are currently wriggling under the surface and instruct an actual evidenced-based decision that would honor the time, money, and Effort put into the program. Can someone do a FoIA request already?

    • Mitchell Fuller says:

      SSD posted an article on this awhile back and per Caleb Army in phone call informed him CP’s entry for family of camo was the winner. I haven’t read anywhere Army refuting his statement.

      • mcs says:

        While it is true that Mr. Crye has written this and we have no reason to doubt him on the subject, the point remains that the Army itself has not released either the official results, or the technical results of the most recent trial, as it has done with the previous camouflage trials. This combined with other factors begins to show a concerning lack of transparency in the process.

        • SSD says:

          Begins? I am beginning to believe that there is something there that they don’t want us to see.

          • SilverDragon says:

            I have a solution to the “Camo Wars” issue and the standard issue uniform for the US Army will be OD Green BDU shirt and Khaki BDU pants. Now the higher ups in the US Army can stop being idiots by using my proposed standard uniform solution.
            (note: I’m a civilian who offers a potential solution on this camo wars issue.)

  5. Ray says:

    I am ready for the drama surrounding this whole thing to be done with, but after reading this article it seems like it is just getting started. I just hope they hold true to the May 2015 date that we can start wearing the OCP uniform and get out of the UCP (Useless Camouflage Pattern)

    • Overwatch says:

      This goes beyond politics. After reading this I come away with the impression that senior Army officers are conspiring to steer contracts. The question is why?

      • Just A Civie says:

        Military Industrial Complex?

        • Mac says:

          More than likely it’s just plain old “Not Invented Here Syndrome” aka ego. “We didn’t invent it (Multicam), so we don’t want it—but we have something that looks and works a lot like it…”

          • SSD says:

            The problem is, Crye invented that too.

            • Mac says:

              Not disagreeing with that. I think the Army is hoping for enough of a distance to not get called out on it-which seems to be failing…due to some excellent articles you’ve written.

              Multicam=us buying a commercial pattern that everyone recognizes as a commercially available pattern

              Scorpion W2=a pattern developed for the Army in a cancelled project that looks and performs similarly to Multicam

              It’s a fucked up way of thinking, but I’d bet that’s part of what’s driving all of this.

  6. 10thMountainMan says:

    I have opinions regarding this that I will keep to myself. Whatever the politics however, I just hope I’m in a usable uniform a year from now.

  7. Matt F says:

    This is a fantastic article. I’m glad that someone’s doing the detective work and keeping the spotlight on the flawed acquisition process.

    • Mick says:

      This. SSD, this is the main reason I come here, is your excellent reporting and analysis on stuff like this. Well done.

    • bloke_from_ohio says:

      The “Flawed” in “flawed aquisitions process” is unnessisary. It is a DoD aquisitions proccess and it is therefore flawed by its very nature.

  8. Overwatch says:

    I want to get this straight. So the Army is paying the same thing for Scorpion W2, which they barely tested that they’d pay for Multicam which they know works. Who approved that?

    • Lt M, UK says:

      From what I remember of SSDs posts, Caleb Crye quoted a number to the Army which was within limits of the 1% difference, but the Army rejected the quote as being too expensive. The Army then proposed a buyout of Multicam from Crye, with Crye very understandably rejected.

      From http://soldiersystems.net/2014/03/18/ssd-exclusive-crye-precision-speaks-regarding-us-army-efforts-adopt-new-camouflage/

      Army representatives approached Crye to discuss the market’s pricing of MultiCam® gear (such as uniforms) and told Crye that it would have to deliver “significant cost savings”. Since Crye does not supply the Army’s uniforms, Crye informed the Army that it, just like any other supplier deep in the supply chain, has no visibility on or ability to mandate the prices the government is charged by any of the uniform or gear makers. Crye agreed to do its part in the only way it could, which was by reducing already nominal fees it receives from its licensed fabric printers. Significantly, those fees represent only a very small part of the end-item cost and are deeply embedded in the supply chain (just as a fiber manufacturer or a dye provider is, for example.) Crye asked for nothing in return for offering this fee reduction. Crye’s proposal, which offered the Army a path to achieve immediate cost savings, was rejected outright by the Army.
      […]
      Continuing its efforts to reduce costs to the Army and in an attempt to eliminate the Army’s concerns that MultiCam® was more expensive than UCP, Crye submitted several formal proposals which proved that the Army could procure MultiCam® gear at prices within 1% of UCP gear. Crye’s proposals additionally showed that this could be accomplished with no upfront cost to the Army.

      The Army rejected all of Crye’s proposals and did not present any counter proposals, effectively saying that a proven increase in Soldier survivability was not worth a price difference of less than 1%.

      • Lt M, UK says:

        And from this, you can see that Crye themselves were actually willing to reduce royalty fees to provide MultiCam uniforms at affordable costs.

  9. Craig says:

    Awesome work guys!

  10. No the other mike says:

    FAR 27.202-1 (A) The gov has a duty to eliminate excessive royalties. In order to do this it looks like they need to peak into a contractor’s cost info, hence 52.227-6.

    Government rights for anything developed using government funding is found in DFAR 227.7103-5 (a). Since Scorpion came from a gov contract, why wouldn’t they be allowed to license it out to print material and do so without paying excess royalties?

    • SSD says:

      The issue here isn’t excess royalties. The government is making moves to pay no royalties whatsoever. By their own language inserted into the patent, the patent holder is due reasonable terms.

      • No the other mike says:

        How about 31.205-37: Royalties are allowable unless the government has a license or right to a free use of the patent. So as I understand it we have these rights under the scorpion patent that we didn’t have with OCP. We can let a pool of contractors print this stuff all we want without paying royalties, because we already paid for the data rights in DAAD16-01-C-0061. The pool of printers pay royalties to Crye currently, but we want that to stop by using the -6 clause and the cost principles. That is my theory as to what is going on anyway. Program contracts aren’t my flavor. Thank god.

        • Overwatch says:

          We? I see you use “we” a lot. Are you from the office that caused this mess?

          • joe says:

            Are you American? Then it’s we. We, the American people, are directing our employees to avoid unnecessary fees. That said, our employees would be guilty of negligence if no effort was made to avoid these royalties. So, sources sought solicitation gets published by us to study how we can avoid the cost.

            If you were the contracting officer, would you be willing to risk personal liability for the sum of royalties paid on enough fabric to cloth and equip the Army?

            • SSD says:

              That should have been done before the decision was made. They are now doing this once they realized they screwed up. They are trying to close the barn door now that the horses are in the yard.

          • No the other mike says:

            We as in Army. No, I don’t work for that office.

            • Overwatch says:

              What’s your position on this new government controlled socialist printer?

              • Jack says:

                Go be a troll elsewhere.

                • SSD says:

                  Yeah, maybe his choice of words is a bit inflammatory but his sentiment is in the right place. I see where there’s a lot of government support for using the FAR to validate the actions already taken by the PEO’s office. What I’m not seeing is a valid explanation of this move to set up a new printer with taxpayer dollars. I’d love to hear how this can be substantiated.

              • No the other mike says:

                If we are acting within the rules of the FAR, then we are right. If we are wrong then Crye will sue. We certainly seem to think we have the right to do this and I can’t imagine we came to that conclusion without consulting legal council.

                • SSD says:

                  Remember, it’s not just enough to follow the letter of the law. We expect our government and its officials to do the right thing. We, as in the American taxpayers, are in this situation because someone failed to conduct due diligence. It is obvious that a lot of effort was put into figuring out how to avoid paying a royalty. Much more than was put into attempting to negotiate a reasonable fee. It’s unfortunate that an equal amount of effort wasn’t applied toward working with the industrial base to identify issues such as this before the Army leadership made its decision.

                • SSD says:

                  That’s a pretty scary statement. It doesn’t sound like you’re too sure. I’d like to know that the government is doing the right thing and not placing itself at risk to lawsuits.

      • Steven S says:

        With all these years with Multicam as OCP, it’s monopoly in SOF, and recreational/civilian market. Maybe the Army feels like they already given Crye enough reimbursement, to justify printing Scorpion with no royalty costs.

        • Steven S says:

          *”reimbursement”*

          To further expand my last comment:

          Maybe the Army considers Multicam as kind of its own, since its based on the Army’s funded Scorpion pattern. With this huge commercial success Crye was able to do with Multicam, maybe they feel like Crye owes them.

        • SSD says:

          That is the position I have heard.

          Perhaps you’re sick of paying Coca-cola that extra little bit of money for the flavor since you’ve been drinking them all these years? Sounds fair right?

          • JB says:

            EXACTLY. This vendetta against Crye Precision is sickening.

            • DBACK020 says:

              Does this vendetta really have an impact on Crye? With the Multicam boom in the civilian market, yes it was definitely a boom, if anything does this not make Crye able to feel free again. They can sell, I would say the most successful camo on the market, without worry of hitting against a govt contract. Now we see “Team Multicam” Multicam race cars, Multicam Shoes, and all kinds of apparel…maybe not getting the contract was a good thing for Crye…I mean, they can’t be hurting too bad from not getting the contract. While the rest of the Army will use W2…what will all the special forces use? Will Crye still have some foot in the door? Will the US Air Force use W2 or Multicam? There are so many questions that extend outside of the general Army.

              Here’s a real question though, Crye knew that the Army was looking for a family of patterns, all of a sudden we have new Multicam Tropic, Arid, and Alpine….was Crye expecting to get that govt contract? Is that the reason that family of camouflages were made?

      • Brian says:

        If the government has “government purpose rights” to scorpion, then they owe no royalties for its use. The royalties they are trying to avoid paying is for a patent they already have rights to.

        Why is that a bad thing?

      • Justin says:

        Didnt the government fund the initial development?

        • SSD says:

          Did it?

          • Rob says:

            SSD, do you have a copy of contract No. DAAD16-01-C-0061 you could post? I haven’t been able to find a copy of it.

            • SSD says:

              No, unfortunately I do not because I believe it will be quite revealing.

              • Rob says:

                I have submitted a FOIA request and will inform you of the results. However, as with all FOIA requests, this issue might be old news by the time anything comes to light.

              • Michael says:

                SSD, is Crye prohibited from releasing the contract? Also, has Crye made any statements regarding the Army’s recent actions (or do you think they are waiting to let their lawyers do the talking)?

                • SSD says:

                  Crye Precision has made no statements, public or otherwise since Caleb Crye released his statement to us earlier this year. I have asked Crye Precision for a copy of the Scorpion contract in the hopes that it would be faster than a FOIA. Unfortunately, they have not answered my request.

                  • Michael says:

                    SSD, so I’m betting they’re going to court. The colors in the original Scorpion 2 better be exactly what they are for OCP now, or they are going to lose, as color is everything (as we learned with UCP).

  11. Mike Nomad says:

    Damn Good article, Mr. SSD. I think you just flipped over a big ol’ rock, and found some… insects that are not used to the light.

    If I have read through this correctly, the situation is indeed beyond stupid…

    Two entities have a direct relationship with Crye: Big Army, and Manufacturers.

    The relationship between BA and Crye is simply, “we need a pattern.” BA can pay for it two ways: Direct payments for completed work, or indirect payments, based on a per unit sold basis. Crye does work for BA, Crye wants to get paid. Entirely reasonable. The idea that BA doesn’t need pay a royalty fee may be something of a canard: What where the conditions under which Scorpion W2 was created? If BA has paid for what is, ultimately, piece work, royalties should not be a factor. Unless, it was through royalties that BA planned on paying for the work…

    Manufacturers want to print fabric, using a pattern that Crye owns. Crye tells Manufacturers they have to pay up to print out. Again, entirely reasonable.

    Big Army doesn’t make uniforms. It buys them from manufacturers. Any notion that BA is somehow going to get around royalty payments is stupid: It would be built into the cost of manufacturing, since Manufacturers have a direct, contractual relationship with Crye.

    • Dom Hyde says:

      That’s just the point, isn’t it? Army doesn’t pay royalty on UCP, and manufacturers don’t pay royalty on it either, so there is zero royalty in that system.

      But Crye has contractual relationships with all the printers who currently print OCP/Multicam, meaning that in order to avoid paying that royalty, the Army needs to acquire printers which it can ring-fence to print on a royalty-free basis. Printers who are not beholden to Crye, and whose goods will go directly into the Army manufacturing and distribution chain with no royalty excised at any point.

      I wonder why the Army is so obsessed with avoiding payment for use of IP rights to a third party?

      • Mike Nomad says:

        Maybe I am not being clear…apologies.

        My take is that if any manufacturer is going to print a pattern where Crye owns the IP, they have to pay Crye. It doesn’t matter who Big Army gets to make them uniforms, the relationship is between the manufacturer and Crye. BA would be paying royalties, because the manufacturer is going to roll that cost into the purchase price.

        Big Army _may_ have made a deal with Crye: Make us a new pattern. The question there is, how was BA going to pay for it? As straight up piece work (give us a pattern, we give you a bunch of dollars), or were they going to pay for it through a royalty scheme (ie, per piece)? Once the payment question is answered, we can see who in this better-than-daytime-television drama is full of crap.

  12. Michael says:

    After reading this I was struck by a question. What does DLA and the Army in general have against Crye? Did he make enemies over there, or do they just not understand capitalism? How can industry be expected to put effort into government projects if they will only be cheated out of the fruits of their labor? This is the kind of information I hope gets picked up by the papers. The meat for a good story is there, especially when you add the initial adoption of UCP into the mix. (Though I also pray that this doesn’t hold up our transition out of this UCP crap.)

  13. joe says:

    So……

    Scorpion W2 was the government pattern removed from CIE competition because it was too similar to a submitted version (MultiCam?)?

    MultiCam family won but was too expensive/parties couldn’t agree on price?

    Scorpion W2 is selected because…. (it did/should perform better than the runner up?)

    Crye is interfering in USG acquisition of Scorpion W2 through prior contracts requiring royalties? Contracts with Crye by necessity require disclosure of sensitive or classified information (actual production output, etc) in order to figure royalties due?

    I can’t imagine what problems might arise here.

  14. max says:

    Well, I like the new pattern and also thanks to get a view into the “business” of the army and their pattern´s .

    I hope that i can one day greate my own pattern :)

  15. BAP45 says:

    Sadly not terribly surprising. My dad used to do contract work with the Navy and ended up having to retire/close up shop because of how much they would jerk him around on the contracts.

  16. AbnMedOps says:

    You might get your Pulitzer for this one. Or at least put on the blacklist. I’m eagerly waiting to see the suits be filed, and Stupid Army (SA) do a re-start on the ENTIRE camo fiasco.

    This epitomizes the fundamental failure of the acquisition system, and the MULTIPLE institutional failures of Stupid Army in so very many other spheres.

    However, nothing will change, as changing Stupid Army would require some fundamental redirection at the political level, like a Teddy Roosevelt-style reformer, and there simply is no one in modern public life of that caliber. We are doomed to many more decades of mediocrity.

  17. Travis Bickle says:

    Even as a civilian you can get fucked by the big green weenie.

  18. Brendan Smith says:

    Excellent work of journalism! This is a perfect case study of the nonsense of the government acquisition environment (and why I left DoD contracting after 20 years).

    I only hope that we can still get a more effective pattern in place for our troops. My son will be in the Army a year from now.

  19. straps says:

    I knew there would be multi-layered IP issues, especially when Army started “manipulating” SW2 into something that looks like contemporary Multicam.

    Surprises me not one bit that the printers looked at this stuff and said, “Um yeah, we’ll do our best to honor our contracts with you, but we’d prefer not to be sued so WE (you and us) are gonna pay Crye.

    Typical government subterfuge: Fulfillment of NDAA terms prohibiting “new” camo (except that the pre-NDAA Scorpion looks significantly different from current Scorpion, which is significantly similar to Multicam), and Army is NOT paying Crye (except it is–just not directly).

    Far as NyCo (vs. FR) being a warstoppper asset, NyCo is far cheaper than FR, so peacetime Homo/Sexual/Suicide Awareness training, equipment PMCS-ing and occasional FTX-ing can be performed in NyCo as FR stocks are warehoused for issue to deployers. The value in having the OCP stuff is (a) esprit de corps (which we’ve been bitching about here for YEARS) and (b) IFF–training for close combat (yeah, SOME people–even Big Army–still train for that) involves training the eyes to distinguish friendlies.

    • Steve says:

      I’d understand if the Army were to try and save money nearly to the point of stealing IP in order to produce OCP in FR but going to these lengths for nyco uniforms doesn’t make sense except for maybe a personal attack on Crye. Has there been any word on printing the new OCP on defender M or is the plan to keep using multicam until the end of hostilities? In which case all the talk before about different patterns for deployments and garrison has come true in a way I couldn’t have anticipated.

      • straps says:

        Respecfully, you’re reading in too much. The Army doesn’t have to hate you to destroy you or even screw you over royally. SSD’s exhuastive, carefully-laid analysis reveals that:

        (a) Army wants to avoid paying Crye (directly or indirectly) by finding mills who have no pre-existing contractual relationship with Crye to…

        (b) print a NYCO uniform that comes in at a decent price point while while…

        (c) using a sketchy interpretation of the Warstopper law…

        (d) even though the newest variant of Scorpion is so similar to the current variant of Multicam that the existing base of mills are afraid that they’ll be in breach of Crye’s standing agreements with them. Full circle.

        Intent is even clear in context of the new AR 670-1 Ch 4 para. 1. b. –

        “The fire resistant (FR) combat uniform in the Operation Enduring Freedom Camouflage Pattern (OCP) is designed as a combat uniform for use in a designated combat area of operation.”

        Even if everything goes WELL, troops will be wearing OCP (Multicam) via personal purchase and legacy issue AND OCP (Scorpion W2). And that will be OK.

        My bet is on litigation, or implementation coming to a grinding halt because of the bureaucratic shenanigans.

  20. RJ says:

    I started to follow the camo update from the beginning, but once the back-and-fourth and rhetoric started, I did not follow as closely.

    One thing I see here is that the Army wants to dodge the fee it would have to pay for printing by setting up its own print shop. However, that print shop will still have to pay royalty not because of a contract with Crye but because of Crye’s patent(s). I dont see anything stopping Crye from filing a lawsuit and getting their peice anyway?

    All this because someone was butthurt about how much they were going to pay per uniform to use Crye’s pattern? Give me a break, Congress spends more than they make every year, why is this any different? Now they’re going to end up paying more than that just to try and skirt the pattern they should have gone with in the first place.

    • Steve says:

      I think one factor is being overlooked, Crye will probably do what’s best for the military and its killers, whether that’s lowering prices until there’s almost no profit or taking the high ground when being jerked around by acquisitions because Crye does a lot more than just camouflage and if they burn this bridge they might not get to provide us with such excellent tools in the future.

      • SSD says:

        They’re getting jerked around in other areas as well. Feel free to ask PEO Soldier about how they feel about Crye’s integrated knee pad patent.

  21. Jack says:

    This is some damn fine work, SSD. Thank you.

  22. S1 says:

    I can see the same thing happening in the automotive field.

    The government gives Chevrolet 10 Billion dollars to help design some sort of Army vehicle. The vehicle never comes to fruition.

    Fast forward five years. New technologies, vehicle models, and marketing strategies surround Chevrolet. The government steps back in and says, “Hey, you know that truck we helped design with your machines and materials a few years ago? Yeah, we want 150,000 of them, and we’re not paying for the Chevrolet name.”

  23. CRH says:

    Great article SSD. I think this a reflection of the current administration infecting the higher echelons of the military command structure with its over all lack of integrity, and transparency as well as piss poor leadership at PEO Soldier/Natick.

    Not to turn this into a political debate but all things considered in the bigger picture when you look at the entire track record of this administration it should scare the shit out of the industry that you have the US Government trying to flat out steal intellectual property that does not belong to them so they can save $1.00 per uniform. Unbelievable! Our forefathers would have been shooting by now.

    • chris says:

      Just feel comfortable in knowing that PEO Soldier was taking IP from Crye (and other innovative companies) and bidding out during the bush administration too.
      see NAPE pad for an example.

    • 11b says:

      This has… nothing to do with the administration. I’m sure the Army would have acted just the same regardless of who was president.

      • Mac says:

        Agreed. UCP happened under the Bush Administration, so definitely not political administrations causing this.

  24. tirod says:

    In fact, the Army doesn’t care who is President, it’s about getting the gear for the least cost possible.

    If we are going to start listing the number of small companies who invented or had in their IP a device, technique, or system that improved a soldier’s ability to wage war or survive it, even with a bit more comfort, that list woudld be far longer than this article.

    Colt, Wiggy’s, and others we may not even know have all been manipulated and even cheated. If you intend to supply the Army with something good and new, expect it. Bad enough too many times the terms of payment are delayed in order to coerce the company into compliance. And if they go out of business, so much the better as the IP rights are then up in the air.

    By the accounts given over the last year here and by others, it comes across as the same kind of underhanded business dealing. So much so that it raises this reaction – I have purchased Crye Multicam manufactured for uniform suppliers, and it’s marked as such. But – it may not be in my or Crye’s best interest to purchase Scorpion or any variant. Aside from the long standing and apparent superiority of Multicam, it’s really a matter of principle – would I want to support the Army or it’s vendors the coercion they are apparently exercising to force Crye not to collect their royalties?

    If it was MY patented creation, would I want the Army to strongarm me and let my work out for others to profit for free?

    Is that the kind of reputation we want our Army to sink to?

    Does it not also impede future contractors and those blessed with the insight to create new technology who would turn away because they understand it would simply be stolen out from under them?

    I think what we need to do is elevate our concerns to our elected representatives and clearly direct them to prevent the Army stealling Crye’s designs to save $1 a uniform. We have already wasted millions with the studies on camo, the advanced combat rifle, the SCAR, combat planes, trains, and whatever other ilk that the industrial complex milks from our government.

    It’s a dollar – and a soldier’s life, too.

    And who approved that hideous blue camo? Why are we STILL seeing his name shielded from public knowledge? That has to be the most closely held secret of the age.

  25. Mitchell Fuller says:

    Wow, insightful and unbelievable re Army OCP shenanigans.

    Army leadership who (mis)managed this will receive commendations, promotions (and some may receive Stars) and pensions for this boondoggle.

    Again, I’m not an adherent to MC, but Army / industry / and especially soldiers would have been so much better off if senior leadership had cut a deal with CP. As reported here, look at ramp up (more like down) mess being created re fabric.

    Thank God we have the FCS to fallback on, what after billions spent that was cancelled?! Well at least if UCP is a camo failure and leaves troops exposed in combat they have the Comanche overhead to protect them, wait a minute, after billions spent that was cancelled too?!

    Funny, 26 million dollars is not sounding like so much money anymore…..

  26. MAC says:

    Corruption or incompetence? I haven’t seen this much confusion since a guy named Sanchez ran a war. To hell with it …everyone email you congressmen before with are marching in to Syria in snow camo.

  27. majrod says:

    SSD;

    In my short four years working in the Battle Lab at Benning I walked away with an insight that may be helpful. The Government (in this case the Army) doesn’t understand business. No one (well maybe 1/100,000) who works for the Gov’t has been in business. Gov’t service doesn’t really attract the creative, risk embracing, independent minded etc. Look, the overwhelming majority of people that leave the service don’t go out and create a business, they get a job. No shame in that but it does illustrate the mindset.

    It’s not personal (mostly) but just a belief they are doing the best for the soldier. Keeping Americans employed or protecting business just isn’t a priority. It’s that mindset where it is totally sensible to flood the market with excess production capability. It drives the cost down and forces those who want to remain in the industry to find even more efficient ways to make a profit (then they are the bad guys when they lay off people).

    This can’t happen in a capitalist system but it can in a socialist one where the gov’t controls the means of production overtly or covertly. When the gov’t changes the rules, doesn’t enforce the laws or chooses which ones to enforce they control the means of production. It’s just covert.

    Small arms development is illustrative of this approach. Where in a capitalist system does one demand suppliers divulge proprietary information in pursuit of a contract and then turn around withdraw the contract and submit a new request for proposals incorporating the proprietary info the companies gave you for the previous effort.

    This same drone bureaucratic approach is why you sometimes find a substantial quality of Air Force doo dads on an Army base PXs and vice versa. The AAFES staff is even worse. They get paid whether the stuff sells or not. All they have to do is trade time for money.

    I was really shocked, angry and disappointed when a special ops unit I introduced a product to, circumvented me and purchased it directly from my source. (BTW, this was totally done by NCOs so its not just the officers and DA civilians that are guilty of crushing the entrepreneurial spirit.) Didn’t help my bottom line but I bet finding that new item and getting it to the special ops troops ended up on someone’s evaluation form…

    What the Army is doing isn’t necessarily personal though I wouldn’t totally discount it. Some decision makers really do think the folks making a living supplying the military are blood suckers. To be brutally honest, some are. It doesn’t excuse a wrong but if one really wants to solve this problem or even be partially successful negotiating the labyrinth that is acquisition you better understand the environment and perspective of the players.

    The twisting of regulations to mean what the gov’t wants it to while heart breaking to those who value the constitution and rule of law must realize isn’t limited to the Army. The Fast & Furious, Benghazi, Media surveillance, IRS, immigration scandals etc. are all illustrative of how low we’ve sunk…

    • SSD says:

      I understand where you come from. On the government side you do see things differently and the service isn’t an environment where you learn about business or appreciate the motivation for profit. To the contrary, in government you strive to provide the best value. As a taxpayer, I applaud such efforts. Unfortunately, in some cases, this seems to go overboard and the baby is thrown out with the bath water. I see no gain in sacrificing what’s right in order to save a buck. In the case of camouflage, this thing went sideways quite some ago and officers who should know better, began to take actions that have resulted in further questionable actions, and so on. Now, we’ve arrived here. Things certainly look questionable. I can tell by the answer I received from OCPA that the Army has been playing this whole thing very close to the vest with very succinct, tailored answers to questions. It’s gotten them this far. Unfortunately, it’s facilitated their taking questionable action after action, That works great until someone comes along and asks questions that you are forced to answer. I think the Army is at the point where some investigative agency needs to get some actual answers out of the Army. They’ve got a lot of explaining to do.

      • majrod says:

        Can’t disagree and support your efforts. Just hope my insight helps you understand the animal and maybe share it with readers.

        • SilverDragon says:

          Camo Wars Episode 1
          In a galaxy far, far, far way, there were four planets represent each leader such as UCP, MARPAT, NWU (Aquaflauge),ABU. Planet MARPAT declares war on planet UCP and orders MARPAT death star to destroy planet Harold, an ally of planet UCP. In turn, planet UCP declares war on planet MARPAT which leads to planets NWU and ABU to declare war on each other. In the meantime, each planet taunted each other over who has the best camo pattern in the galaxy.

  28. Scott says:

    Ranger Green, Olive Drab, Foliage Green, Coyote Brown, MJ Khaki, Flat Dark Earth, Tan, Desert Sand, Scorched Earth Black on a Carrier…. Mix and mismatch pouches according to the dominant terrain colors. Go for a random macro pattern achieved by pouch placement, and avoid this micro pattern OCD. Micro patterns fail as soon as you play in the dirt, and they don’t work from a distance anyways. A set of some pants and shirts in solid dark earth tone colors will work just fine for most of the planet, Tan or Green as needed. Add a set of brown boots and your good to go! Just joking… it could never be this simple… could it? 😉

  29. BUG says:

    Excellent, well researched article!

    As a foreigner (Australian) I am incredulous not a SINGLE Politician appears to have called the Army to serious question?

    This is a bag of something that smells real bad in the noon-day sun.

    Instead of spending their time Obama-bashing, deserved or not, get off your fat duffs and help the troops! AND make sure a company gets paid as it appears to be (by the Manufacturers) and court-martial every single moron who is responsible for this mess in PEO or anywhere else.

    Being a Procurement & Contracts Manager in Industry, I’m appalled at the treatment and implied/actual attempts to “flog” CRYE again……..

  30. Dom Hyde says:

    Great piece of Woodward and Bernstein work, SSD. I hope this becomes the MSM scandal it deserves to be.

  31. Mike says:

    Congress needs to form a committee to investigate the entire Army acquisition system. There is so much fraud, waste, and abuse happening throughout.

    Program offices need to be shut down and replaced by temporary project officers and staff that are required to disband after specific periods of time.

  32. OakRat says:

    I think you mean “eminent domain.”

  33. Spartan says:

    I’m disgusted on so many levels. America should be better than this, especially military leadership. Thanks for bringing this to light. Please keep us all posted regarding any more secret dealing related to this issue.

  34. Jesus Built My Hot Rod says:

    JEBUS Christmas!!! This is turning out to be far beyond a Cluster fuck!!! I predict in the end this whole gaggle will have cost 6 times more than if they had just picked Multicam in the first place!!!

  35. NoneRequired says:

    SSD, Have a copy of DAAD16-01-C-0061? If not, then you really can’t know what the contract called for in way of development for Scorpion. If you don’t have that info, you have nothing since Multi-Cam came from that. That Crye thought they should have contracts with printers that would exclude them from printing patterns similar to Multi-Cam leads me to believe that maybe Crye was trying to collect on both ends of the business.
    Back to C-0061, if it paid for the development, then the Gov’t is going to get Government purpose rights at the very least. Crye trying to reduce the value of those rights by making printers sign a restrictive contract before they could print Multi-Cam…. see where that goes. Yeah, that’ll make friends in the acquisition community won’t it.
    If I’m the contracting officer, I’m going to do exactly what DLA is doing, try to find or start up someone who isn’t beholden to Crye to print what I already bought and paid for in C-0061. Or some variant of it that the GPR let’s me do.
    Now, mine version is as speculative as yours without seeing C-0061. But I’m looking at it from a different viewpoint it seems. As a taxpayer I feel like if Crye got paid under C-0061 then trying to shake down the Gov’t for more royalty money through the printers is crap. Good on DLA for not playing that game.

    • SSD says:

      The ironic thing about your line of reasoning is that all of those printers were licensed at the insistence of the Army. It literally created this situation.

      I’d also point out that those agreements were in place before the Army even started hinting toward Scorpion.

      And btw, that whole printing similar patterns thing in the licensing agreements is actually quite common. It’s meant to stop counterfeiting. I guess it’s working.

  36. SilverDragon says:

    How the Camo Wars actually started

    USA Gen. A, USMC Gen. B, USN Admiral C, USAF Gen. D decided to play a game of poker and all of them ended up being drunk on alcohol in the middle of the game. USMC Gen. A then said, I’m going to own Digital Desert and Woodland camo pattern. In turn, USA gen. B was furious and said, WTF, I’m going to own the UCP camo pattern, then USAF Gen D said, hell, I want to be special and therefore own the digital tiger stripes pattern. USN Gen. D got jealous and said, to hell with this, I’m taking the blueberry camo pattern fkc you

  37. Paralus says:

    I wish I could I say I find it incredible how Big Army keeps fucking this up, but I can’t.

    If it couldn’t stop the UCP monster from being designed. printed and issued in spite of its glaringly obvious ineffectiveness anybody with functioning Mark I Mod O eyeballs is testament to how incompetent Big Army is.

    And if it can’t get something as simple as a camo pattern down, what faith should we have any in acquisitions they make? GCVs, AMPV, Scout Helo replacement, carbine replacement?

    It is pathetic to watch news stories of foreign militaries in exercises with our soldiers who are wearing superior and effective uniforms compare to the eyesore that is UCP.

  38. SSD says:

    There have been some interesting comments that present the Government side of things which is essentially that, Crye Precision must not be paid royalties at any cost, even to the point of disrupting the supply chain.

    One thing that has not been addressed by them or me is the lay of the land. If the government’s case is so compelling, why are the printers who pay Crye Precision a royalty, continuing to do so? They are businessmen. Could it be that perhaps they have an insight into how this will go business-wise if they do the Government’s bidding at fail to live up to their agreements? Or, perhaps it could be information contained in this disclosure included in the Sources Sought Notice: 252-227-7025 Limitations on the Use or Disclosure of Government- MAY 2013.

    With its use the Government acknowledges the pattern is not their property and anyone who prints it in their behalf agrees to these terms:

    (c) Indemnification and creation of third party beneficiary rights. The Contractor agrees—
    (1) To indemnify and hold harmless the Government, its agents, and employees from every claim or liability, including attorneys fees, court costs, and expenses, arising out of, or in any way related to, the misuse or unauthorized modification, reproduction, release, performance, display, or disclosure of technical data or computer software received from the Government with restrictive legends by the Contractor or any person to whom the Contractor has released or disclosed such data or software; and

    (2) That the party whose name appears on the restrictive legend, in addition to any other rights it may have, is a third party beneficiary who has the right of direct action against the Contractor, or any person to whom the Contractor has released or disclosed such data or software, for the unauthorized duplication, release, or disclosure of technical data or computer software subject to restrictive legends.

    The Government is held harmless regardless if they are right or wrong and the printer accepts all risk.

    • Overwatch says:

      Why doesn’t the Army just sit down with Crye and just work this out?

    • No the other mike says:

      I think they are using this clause for the non-disclosure found in part B which would protect the contractor (aka patent holder, Crye) from prohibited uses of their patent by the support contractor (printers). Part C tells Crye, “If these printers break the NDA, it is not our fault. Take them to court.”

      I’ve been thinking about this acquisition and it occured to me that Scorpion by itself will not fullfill the requirement. The program called for a family of patterns and by my count, we are still short a desert and a tropic pattern.

      I have a feeling the best is still yet to come fellas.

      • SSD says:

        That’s one of the things about the FAR, it all applies.

        You bring up another important issue; Requirements. Other than the Phase IV solicitation which contains no promise of a fielded solution, show me the requirements documents for a new Army camouflage. One pattern, let alone a family of patterns.

  39. Overwatch says:

    Does this mean there won’t be any Scorpion fabric for custom gear? How did you get yours SSD?

  40. Benny says:

    Well done Eric!