USA — Agency Works to Ensure ‘Every Dollar Counts’

WASHINGTON — The Defense Logis­tics Agency is tak­ing steps to cut costs and boost effi­cien­cy as part of a larg­er effort to reform the way the Pen­ta­gon does busi­ness, defense offi­cials said today.

“We rec­og­nize that we are ask­ing the U.S. Con­gress and Amer­i­can peo­ple for a lot of mon­ey to main­tain our nation­al secu­ri­ty,” Robert F. Hale, the Defense Department’s comp­trol­ler and chief finan­cial offi­cer, told reporters dur­ing a tele­con­fer­ence. “We’ve got to make sure every dol­lar counts.”

Ear­li­er this month, Defense Sec­re­tary Robert M. Gates laid out his plans to reform the way the Pen­ta­gon does busi­ness and to elim­i­nate duplica­tive, unnec­es­sary costs. Among his direc­tives, the sec­re­tary tasked the ser­vices and defense agen­cies to achieve up to a $100 bil­lion in over­head sav­ings over the next five years.

Join­ing Hale on the call, Navy Vice Adm. Alan S. Thomp­son, direc­tor of DLA, out­lined the steps his agency is tak­ing to com­ply with Gates’ ini­tia­tive.

“Warfight­er sup­port is our organization’s pri­ma­ry focus, but along with that comes the need to deliv­er prod­ucts and ser­vices effi­cient­ly and to reduce prices,” he said. DLA has tak­en sev­er­al steps toward that end, he added, with addi­tion­al actions planned for upcom­ing months.

Thomp­son said DLA will pur­sue a price reduc­tion of up to 10 per­cent across the board by pro­vid­ing a greater focus on rea­son­able prices, incor­po­rat­ing price reduc­tion fac­tors in strate­gic sourc­ing oppor­tu­ni­ties and estab­lish­ing more long-term con­tracts.

The agency also will work to improve busi­ness effi­cien­cy by enhanc­ing doc­u­men­ta­tion to ensure “non­con­form­ing” and coun­ter­feit parts don’t enter the Defense Department’s sup­ply chain, the admi­ral said. The Defense Depart­ment has a “zero tol­er­ance pol­i­cy” for sup­pli­ers that pro­vide coun­ter­feit parts, and while the major­i­ty of sup­pli­ers are above board, the agency must weed the oth­ers out, he added.

Thomp­son also touched on a new enter­prise busi­ness sys­tem that’s enabling DLA to do a bet­ter job of demand plan­ning and fore­cast­ing. The enter­prise busi­ness sys­tem, he explained, is the “engine” the DLA uses to run.

“We don’t want to under­buy, [and] we don’t want to over­buy,” he said. “This adds extra costs to our sup­ply chain.”

On the infor­ma­tion tech­nol­o­gy front, the agency plans to use a pro­cure­ment mod­ule, called e-pro­cure­ment, to replace its lega­cy con­tract writ­ing capa­bil­i­ty, Thomp­son said, and it also plans to merge a num­ber of lega­cy infor­ma­tion tech­nol­o­gy sys­tems.

An oper­a­tional eval­u­a­tion team also is look­ing to reduce the risk of pro­cure­ment fraud by seek­ing poten­tial vul­ner­a­bil­i­ties and devel­op­ing risk-mit­i­ga­tion strate­gies, Thomp­son not­ed.

“As a result of the team’s work, we’ve imple­ment­ed sev­er­al actions to tight­en up our acqui­si­tion process­es,” he said. To lever­age buy­ing pow­er, the agency is con­sol­i­dat­ing pur­chas­es across the agency rather than enter­ing into sep­a­rate, small­er con­tracts, the admi­ral explained.

Also, agency offi­cials are meet­ing with more than a thou­sand DLA sup­pli­ers and poten­tial sup­pli­ers to dis­cuss the need to work togeth­er to cut costs and increase effi­cien­cies. DLA is a high-vol­ume orga­ni­za­tion, Thomp­son not­ed, exe­cut­ing more than 10,000 con­tract actions dai­ly.

DLA has a his­to­ry of con­tin­u­ous cost reduc­tion, Thomp­son said, but it will redou­ble its efforts to meet Gates’ ini­tia­tive.

“We’re focused on warfight­er sup­port and, frankly, good stew­ard­ship of Amer­i­can tax­pay­er dol­lars,” he said. “We’re going to hold sup­port to the warfight­er con­stant at the very high lev­el we’ve been pro­vid­ing in recent years.”

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)

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