NORFOLK, Va. - Though it reports to the Department of Homeland Security, the U.S. Coast Guard functions much like a traditional military service and has many of the same supply needs, so the Defense Logistics Agency is working to expand its support to the Coast Guard to help the service accomplish its missions more effectively and efficiently.
DLA’s partnership with the Coast Guard first began in 2006 with a memorandum of agreement between the service and DLA Energy, said Heidi Byers, who until recently was the customer account manager for the Coast Guard. Since then, DLA and the Coast Guard have established several more agreements, to include performance-based agreements for engineering and cataloging support and an overarching interagency agreement for supplies and services.
This interagency agreement, which was signed in 2011, established a formal relationship between the Coast Guard and DLA and set the stage for expanding support in the future, said David Kless, National Account Manager for international and federal programs. That agreement allows DLA to support the Coast Guard with any of its consumable commodities and includes all items common to the other military services, Kless said.
Because the Coast Guard has many similar missions to the military and can be called upon to serve the Defense Department in a time of war, DLA is working to expand the way it supports the Coast Guard, Kless said. The ultimate goal, he said, is to have the Coast Guard on the same level as any other military service, where the agency can provide items unique to that service and manage all consumable items for the service.
“If you take out the fact that the Coast Guard falls under [the Department of Homeland Security], they look, smell and feel just like a military service,” Kless said. “They have aircraft, they have boats, so therefore, their customer requirements are very similar to the other services.”
Currently, the Coast Guard manages its own consumable items and goes directly to vendors to purchase these items, Kless said. Most of these vendors are the same ones DLA works with for the traditional military services, he noted, so the Coast Guard is in effect competing with DLA in the consumables market. Also, spending a lot of time on inventory management detracts from the Coast Guard’s real-world missions.
“Right now, from a federal government perspective, it costs the federal government more for the Coast Guard to manage their inventory because there’s no visibility of that inventory outside the USCG and it is managed using a stovepipe approach,” Kless said. “Quite often, the increase in cost is a result of other services and agencies competing with DLA for the same sources of supply. Inventory management is a core competency for DLA, and by having DLA manage USCG consumable inventory using the same methodology as other services, DLA is able to leverage our buying power, our economies of scale, and provide visibility of that inventory across all the services.”
DLA is in the process of assuming management of both common and unique consumable items from the Coast Guard. The initial focus is on 87-foot Coastal patrol boats, which are the Coast Guard’s largest population of vessels, Byers said. The Coast Guard has 73 of these boats, with 69 owned by the Coast Guard and four owned by the Navy. The fact that the Navy has a stake in these boats made them a logical choice for the initial effort, she noted. These patrol boats have 330 items that are common to all military services, so DLA is already supporting those, Kless said. An additional 151 items that meet DLA’s stockage criteria are unique to the Coast Guard, and these are the ones that are being transferred to DLA’s management, he said.
The transfer for the items in the 87-foot patrol boats will be happening very soon, Kless said, and then the focus will shift to the rest of the Coast Guard’s consumable items. Those items number more than 51,000, but the amount that will transfer will likely be lower after DLA does an evaluation and determines which are still active and meet the agency’s criteria, he said.
DLA has a goal of getting that evaluation started for the rest of the consumable items over the next year, and that effort will be led by Barbara Shaffer, the new customer account manage for the Coast Guard. This is a big job, and it’s a team effort by the federal programs team and other areas of DLA that involves working with the Coast Guard’s item managers on cataloging all the items and determining their “inventory position,” how many of each item the service has and where they are. Once those efforts are complete, she will be able to put together an execution plan that lays out how many items will transfer and what the timetable will be for the transfer.
“Over the next year, the plan and mechanisms will be in place,” Shaffer said. “That’s our goal.”
On the business side, transferring the items will not be too difficult because the Coast Guard is already able to interface with DLA’s military billing system, and all the proper infrastructure is in place for them to order from DLA, Kless said.
“All we’re doing is expanding the population of items that we provide to them now,” he said. “So unlike a federal agency, where we don’t have any of that ordering process in place, that already exists for the Coast Guard.”
The transfer of consumable items from the Coast Guard to DLA is the beginning of a process in which the agency will expand its support not only to that service, but to other federal agencies that fall outside of the Defense Department, Kless said. Logistics is DLA’s area of expertise, he noted, so it makes sense for the agency to help more federal agencies with inventory management, freeing up their resources for their core missions. This is especially relevant as purse strings tighten across the government in an effort to reduce costs, he said.
“If we’re already out there supporting a subset of customers but there are other customers that have similar requirements, … why should these agencies compete with the same vendors?” he said. “For years, we’ve focused only on supporting the Defense Department, but now there are opportunities to expand as budgets diminish.”
Expanding DLA support will not only free up resources in other agencies, which is the goal for the Coast Guard, but will also help DLA’s bottom line in a time of decreasing profits, Shaffer said.
“It’s a whole-of-government approach,” she said. “Logistics is our core competency, not the Coast Guard’s, so it’s an opportunity for the Coast Guard to refocus their resources on their core competencies. And for us, it brings in sales to the agency in a time of otherwise declining sales.”