DLA and industry need to work together to lower costs and improve buying power

////DLA and industry need to work together to lower costs and improve buying power

DLA and industry need to work together to lower costs and improve buying power

DLA and its industry partners were told this week that together they had to improve buying power and cut costs in order to become more efficient and provide more value for the taxpayers’ dollars.  Vice Adm Alan Thompson, in a conference call to reporters from the 2010 DLA Enterprise Supplier Conference Exhibition in Columbus Ohio, identified numerous areas in which the agency needs to act  to meet Sec. Gates’ call  to reduce the costs of operation.  He said that DLA “will pursue price reductions by as much as 10 percent in selected areas.”  He also stressed the need to consolidate purchases of depot-level parts and supplies into one type of contract.  DLA will respond to Sec. Gates’ call to reduce IT redundancy by consolidating legacy systems for managing energy products.  DoD Comptroller Bob Hale, also participating in the conference call, seconded the call for action, but generally praised defense agencies’ operations.  He told reporters that even though defense agencies, unlike the private sector, have to operate under special rules prescribed by Congress, many of  the agencies operate efficiently.  Thompson reinforced this thought by pointing out much of DLA’s efficiency is due to the success of its enterprise business systems allowing it to better forecast demand.  Nevertheless, Thompson urged the DLA community push to improve.  Shay Assad, director of defense procurement, underscored the necessity of taking strong cost-cutting actions.  He told conference attendees that the move for more efficiency will provide more value for every dollar spent to support the warfighter.  Reaching out to defense contractors, Assad said that this does not have to mean lower profits for industry partners because  “those contractors who can demonstrate they’ve reduced their costs of operations will be rewarded.”  Assad and DLA Small Business Programs Director singled out small businesses for special attention.  They said DLA will put more emphasis on its goal for small business participation.  Currently, DLA’s small business partnerships stand at 19 percent, short of its 23 percent goal.  They are working to develop new strategies to increase the participation rate.

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