Harnitchek: Long-term contracts, reverse auctions help DLA stay lean

FORT BELVOIR, VA, UNITED STATES

10.21.2014

Courtesy Story

Defense Logistics Agency   

FORT BELVOIR, Va. - The Defense Logistics Agency is using a variety of methods to keep its budget lean, DLA Director Navy Vice Adm. Mark Harnitchek told a predominantly Air Force crowd Oct. 21 at the 2014 Logistics Officer Association Symposium 2014 in Arlington.

“There is lots of pressure to be much more efficient. Times are leaner and we must be more efficient,” Harnitchek said. “At DLA, we use 15-year contracts, reverse auctions, and partnerships with private industry to do it.”

The symposium’s theme was “Leaner, Stronger, Connected,” and Harnitchek described businesses practices at DLA within that framework. He told the audience that DLA is getting stronger through its efforts to drastically lower its back orders.

“I hate back orders,” he said. “We’ve worked hard to get those down.”

DLA has expanded its forward stocking for the Pacific Air Forces and improved order response time, particularly for the Air Force.

“Air Force Materiel Command told me they wanted 90 percent of their parts in hand in a 48-hour window,” he said. “Last quarter, we hit 92 percent. We don’t buy inventory we don’t need, but we have mechanisms in place to get stuff in place fast.”

Harnitchek also discussed audit readiness. All Defense Department activities have a deadline of 2017 to be fully auditable.

“At DLA, we’re going to be there by 2015. We want to show people we are good stewards of the nation’s treasure,” he said. “And really, there is a lot of opportunity to find waste when you just open up the hood and look at the engine. We hadn’t looked at the engine in a while, but now we are.”

DLA is connected in Africa, Harnitchek said, where it is involved in the U.S. government effort to combat Ebola in West Africa. He said the agency is staying ahead through its strategic partnerships with industry and other federal agencies.

“It’s all about execution excellence,” he said. “We are very focused on our customers. As logisticians, you have to buy enough, buy on time, get it to the right place and enforce the contract.”

Harnitchek said it is important to negotiate wholesale pricing when writing contracts for the parts.

“This can’t be done by memorandum of understanding or legislation,” he said. “You have to talk face to face with your industry partners and build a relationship with them. Nobody knows this better than loggies. You just gotta work it.”

• Date Taken: 10.21.2014
• Date Posted: 10.29.2014 09:18
• Story ID: 146418
• Location: FORT BELVOIR, VA, US