Defense Logistics Agency to Enhance Industry Engagement

By Harper, Jon | National Defense, March 2018 | Go to article overview

Defense Logistics Agency to Enhance Industry Engagement


Harper, Jon, National Defense


Faced with the need to meet growing demand for the products and services it provides, the Defense Logistics Agency plans to strengthen its ties with industry.

DLA is tasked with managing a massive global supply chain for the U.S. military and other agencies. Last year alone, it provided more than $30 billion worth of goods and services to warfighters, including repair parts, clothing and consumables such as fuel and food. It oversees nine supply chains and supports more than 2,300 weapon systems.

Over the past six to eight months, there has been "an increasing demand that we're seeing within DoD ... across all the different commodities that we support," said Michael Scott, deputy director of logistics operations, in an interview with National Defense.

He attributed the uptick to the push for enhanced military readiness that is being spearheaded by Secretary of Defense Jim Mattis and other Pentagon leaders.

While most of the supply chain is running smoothly, "there's always somewhere our source is having difficulties or we're having trouble finding a source, or [intellectual property] has been sold to another party and we don't know who that is," said Michael Beebe, DLA's director of acquisition.

To deal with some of the procurement challenges it's facing, the agency plans to publish a new industry engagement plan in March.

Beebe declined to delve into the specifics of the plan prior to its finalization and publication, but he previewed some of its key themes.

It recognizes the value of enhancing existing relationships with industry, he said. "Communication and interaction is a central part of it," he said. "A lot of it is going to recognize the value of their feedback and . the fact that we need to understand that feedback and adapt as appropriate, which I wouldn't say that we have historically been particularly good at."

Additionally, the plan will include a push to look for new business partners that might not already be on the agency's radar. It will also address the need for DLA and industry to work together as partners to mitigate the risks that threaten the supply chain and military readiness, he noted.

As part of this effort, the agency seeks to improve its "market intelligence" to have a better picture of the vendor landscape. Rather than waiting until problems emerge, DLA officials want to know ahead of time where capabilities reside, how the commercial market is responding to demands and adjusting their manufacturing patterns, what interests may be domestic versus offshore, and what is being bought and sold, Beebe said.

The agency deals with a lot of aging weapon systems, he noted.

"With that comes issues where maybe we haven't sourced things for a long period of time, intellectual property may have been moved around [or] sold to other companies or other interests," he said. "That's where we end up struggling a little more."

This trend is most prevalent in the aviation community where sole sourcing is common, he noted. Some companies are scooping up intellectual property rights for key items and then jacking up the price when they are most urgently needed by the Defense Department.

"We at times reverse engineer the items to develop those specifications so that we can work with some other manufacturer or work on the competitive market," he added. Having better awareness of IP ownership across industry would mitigate the problem by enabling the agency to plan ahead, he noted.

In recent years, the agency has taken steps to increase the speed of contracting. It cut the amount of internal reviews and regulations by more than 90 percent, Beebe said.

It now takes on average about 50 days for items to be put on contract during the source selection process. Many of them are on contract within a single day or a couple of weeks, he noted. That is a marked improvement relative to how quickly the process moved several years ago, he added.

Ninety-two percent of the contracts that DLA awards are done in a competitive market, and about 80 percent of the dollar value of its contracts are competitive, Beebe said. …

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