DLA – The Good, the Bad, and the Ugly

October 8, 2009 on 5:42 pm | In The Profession | Comments Off

The Defense Logistics Agency supplies almost every consumable item America’s military services need to operate, from groceries to jet fuel to light bulbs. It provides approximately 95% of the military services’ repair parts and 100% of the services’ subsistence, fuels, medical, clothing and textile, construction and barrier material. It then disposes of surplus material and supplies. It has operations in 48 of the fifty states including Alaska and Hawaii (the neglected states are Vermont and Iowa) and would be #57 on Fortune’s 500 list (if it were a company). So in terms of basic commodities, if you are looking to sell to the government DLA is a key agency to consider.

DLA managed $2.07 billion in foreign military sales for FY 2008 and supports 126 allied nations. It employs 23,000 military and civilian employees. Manages 6.4 million items in eight supply chains and processes 114,000 requisitions every day. It conducts 11.200 contract actions every day and supports 1603 weapon systems. It spends about $35 billion every year, and that number went to $42 billion in 2008. It is a very busy and productive place. It’s contracting specialists are some of the best and working for DLA gets you vast experience very quickly. Speed and efficiency are key measures of success, and unlike many logistic functions – soldiers’ lives depend on DLA’s effective execution of its mission. It is a high-pressure, but very rewarding environment.

Historically, although its roots go back to WWII, DLA has only existed since 1961. In that year, Secretary of Defense Robert McNamara ordered that the previous single-manager agencies(where each branch of the armed services had responsibility for certain commodities) be consolidated into one agency. The Defense Supply Agency (DSA) was established on October 1, 1961, and began operations on January 1, 1962. In 1965, DOD consolidated most of the contract administration activities of the military services to avoid duplication of effort and provide uniform procedures in administering contracts. Officials established the Defense Contract Administration Services (DCAS) within DSA to manage the consolidated functions.

DLA took on its present name on January 1, 1977, when DOD changed the name of the Defense Supply Agency to the Defense Logistics Agency. In 1990, DOD directed that virtually all contract administration functions be consolidated within DLA. In response, the agency established the Defense Contract Management Command, absorbing its Defense Contract Administration Services into the new command. You might here some of us still refer to DCAS or DSA, much as we sometimes here references to the ASPR! Some old habits die hard.
This past September, however, Congress heard testimony from the Government Accountability Office that suggested that perhaps DLA was not functioning quite as it should. According to this report DOD faces challenges in making sure that DLA gets value for the taxpayer’s dollar and obtains quality commodities in a cost-efficient and effective manner. Key areas of concern include clearly defining its requirements, using the appropriate contract type, and effectively overseeing contractors. Specifically the GAO has found the following problems:

Accurate Requirements Definition – Without a good understanding of customers’ projected needs, DLA is not assured it is buying the right items in the right quantities at the right time. GAO’s prior work has identified instances where problems in properly defining requirements can lead to ineffective or inefficient management of commodities. For example, GAO reported in 2005 that while DLA had a model to forecast supply requirements for contingencies, this model did not produce an accurate demand forecast for all items, including Meals Ready-to-Eat. As a result, the demand for these items was underestimated and some combat support units came within a day or two of exhausting their Meals Ready-to-Eat rations.
Sound Business Arrangements – Selecting the appropriate [contract] type is important because certain contracting arrangements may increase the government’s cost risk where others transfer some of that cost risk to the contractor. For example, GAO noted in 2007 that DLA’s Defense Energy Support Center was able to purchase fuel and supply products for the forces in Iraq more cheaply than an Army Corps of Engineers contractor because DLA was able to sign long-term contracts with the fuel suppliers.
Proper Contract Oversight and Management – Failure to provide adequate contract oversight and management hinders DOD’s ability to address poor contractor performance and avoid negative financial and operation impacts. For example, in June 2006, GAO found that DLA officials were not conducting required price reviews for the prime vendor contracts for food service equipment and construction and equipment commodities. Agency officials acknowledged that these problems occurred because management at the agency and supply center level were not providing adequate oversight to ensure that contracting personnel were monitoring prices.

GAO-09-1040T

GAO acknowledged that DLA from its headquarters at Fort Belvoir in northern Virginia has taken some actions to address these challenges. For example, DLA has begun adjusting acquisition strategies to reassign programs to a best procurement approach. DLA has also established contracting officer’s representative training requirements to ensure these individuals are properly trained to carry out their responsibilities.

On the one hand it might be easy to say that after all this time, DLA should be able to get it right; that GAO should not still be finding these problems. When you look at these criticisms, however, they are identical to the very issues that EVERY contracting activity faces. Defining and understanding the requirement, placing the contract under the correct business arrangement, and overseeing the contractor are the three areas that require constant attention. Government contracting is very dynamic, resources are stretched too thin, and inadequate training conspire to create these perennial problems. No agency is immune.

But that doesn’t suggest that it is excused. Our profession MUST continually strive to properly define requirements and train those who do so. The variety of business arrangements must be understood. For example, when was the last time you saw a Fixed Price Redeterminable contract? Did you even know that such a contract type existed? Doing things a particular way because “that’s the way we’ve always done it” is just sloppy contracting. Contracting professionals MUST engage in continuous learning or they neglect one of the linchpins of being a professional. And having enough trained contract professionals is going to continue to be problem as the baby boomers continue to retire. These are not easy problems to solve. But that doesn’t mean we shouldn’t try. What can you do to address these three areas in your organization? The next GAO report might be a cut and paste from this one, only this time it will refer to your command, company, or service center.

Do You Pray for Your Contracts?

May 7, 2009 on 9:33 pm | In The Profession | Comments Off

Have you ever heard someone say, about a coworker who was taking on a significantly challenging task, that “He doesn’t have a prayer?” The obvious meaning is that even calling on your deity will not assist you in achieving your objective. Have you ever read a contract and had that same feeling? Would you normally pray for your contracts? And why would I ask such a ludicrous question?

Before you think me gone mad, or that I am one of those “loony Christians” (which by the way I am – Christian, that is. The jury is still out on the loony part,) let me assure you that my questions are quite reasonable – especially today. Today is the National Day of Prayer.

If you look at the history for the National Day of Prayer you find that it dates WAY back to the earliest days of our country’s founding.
1775 The First Continental Congress called for a National Day of Prayer.
1863 Abraham Lincoln called for such a day.
1952 Congress established NDP as an annual event by a joint resolution, signed into law by President Truman.
1988 The law was amended and signed by President Reagan, to be the first Thursday in May.

In honor of this day in 1982, Ronald Reagan sad, “Today, prayer is still a powerful force in America, and our faith in God is a mighty source of strength. Our Pledge of Allegiance states that we are ‘one nation under God,’ and our currency bears the motto, ‘In God We Trust.’ The morality and values such faith implies are deeply embedded in our national character. Our country embraces those principles by design, and we abandon them at our peril. Yet in recent years, well-meaning Americans in the name of freedom have taken freedom away. For the sake of religious tolerance, they’ve forbidden religious practice in the classrooms. The law of this land has effectively removed prayer from our classrooms. How can we hope to retain our freedom through the generations if we fail to teach our young that our liberty springs from an abiding faith in our Creator?”

Powerful words. This blog is too short to go through the presentation I often make in classes about whether or not America is a “Christian Country,” but suffice to say that Christian themes have predominated in our collective view of the underlying principles on which our country was founded. And even the use of “Christian” is being co-opted, much like other words that we learned in grade school, but today have completely different meanings. One of the preferred monikers now is “Follower of Jesus.” Seems people have abused the true meaning of Christian to the point that it is no longer a badge of honor and statement of the moral values you try to practice. Too much has been done in the name of Christianity for it to maintain its proper place of reverence in our vocabulary. And prayer is not unique to the Christian faith.

Regardless of your religious leanings (or lack thereof) most Americans believe in the power of prayer. And if you have a contract that seems hopeless, think about praying about it. It just might help.

Are You Staying Current?

May 11, 2007 on 8:28 am | In The Profession | Comments Off

If I had eight hours to chop down a tree, I’d spend six hours sharpening my ax.
Abraham Lincoln (1809 – 1865)
16th U.S. President

We are presently waiting on an announcement concerning a competition we have entered. The task will be to conduct six one-day training sessions for a federal agency on ethics This is a curse we have taught many times in different forums and formats, but this one, like all the ones before it, has its own differences and client expectations. Thus, now that we have submitted the proposal we have two choices. We can simply rest on our proposal and wait for the announcement. If we win, we have 15 days to provide a final course syllabus. If we lose, then we need do nothing but focus on the next opportunity. Alternatively we could begin constructing that syllabus in accordance with the RFP guidance. If we win, we will be well on our way to meeting the first deliverable. If we loose – well perhaps we have just wasted our time. Either way, because this is pre-award, there will be no cost recovery for any of the time spent doing this

But we don’t view it that way. Certainly it will be to our advantage to be prepared to perform, but even if we do not win the competition we do not view the time as wasted. Since we teach ethics often (for one recent example, check out the presentation we did at the NCMA World Congress in Dallas in April 2007, available here), we never consider a review of our materials or the preparation of templates and content as wasted time. What this does is prepare us to teach this class or any other with related course material. We improve our content, enhance the teaching methods, improve the teacher notes, and develop new innovative ways to present the material to an adult audience. In other words, we are spending time sharpening our saw. If you are a student of Covey, you see the similarity in his seventh habit of highly successful people – Sharpen the Saw.

What have you done today to sharpen your saw? Have you signed up for a training class? Have you reviewed the most recent advance sheets related to your profession? Have you sought out a colleague to discuss a particular issue? The important thing is to do something every day. Motivational teacher Brian Tracy has observed that there are some things you must do every day – eating seven apples on Saturday night is not going to cut it! That is very insightful.

Take time today to sharpen your saw. Do the same thing tomorrow…and the next day…and the next. Never let up. Stay on top of your game.

World Congress

April 23, 2007 on 8:46 pm | In The Profession | Comments Off

So here I am in Dallas at the NCMA World Congress! There are over 1300 contracting professionals here for three full days or training, education, and networking. This is truly an event that every contract management professional should attend!

The presentations run the full spectrum of contracting issues from finance to basics; from contract law to logistics. It’s all here!

I’ve got three presentations to do this week – two on Tuesday and one on Wednesday. Tuesday I will do one on Negotiation Ethics before lunch and The Contract Manager’s Role in Sarbanes-Oxley Section 404 Certifications just after lunch. On Wednesday I will do the session before lunch on Six Things Contract Managers Need to Know about Six Sigma. If you missed thees sessions, the presentations are available at NCMAHQ.org or just shoot me an email and I will send you copies of the presentations.

I have been an NCMA member for over 20 years now and it is great to catch up with old friends. We are all a little greyer and pudgier, but we have worked hard to serve the profession and we are looking forward to passing the batons on to other members. But we are not retiring yet! There is still so much to learn, so much to teach, and so many to mentor. These are the values that make NCMA great and we continue to serve.

 Enough nostalgia! Tomorrow is a new day. Cant wait!

World Congress Convenes in Dallas

April 21, 2007 on 12:56 pm | In The Profession | Comments Off

This weekend marks the beginning of the National Contract Management Association (NCMA) World Congress. Governance and other meetings take place on Saturday and Sunday, and the Congress itself begins on Monday. Sessions, both plenary and break-out, run through Wednesday, April 25.

One hallmark of a professional is that they engage in continuous education in their field. The NCMA World Congress is the preeminent event of the year. It has the largest attendance, the greatest number of vendors, and the greatest diversity of topics and events. It is the one event each year that every contracting professional should attend.

 Certified Contracting Solutions, LLC supports the Congress both by attendance of its various problem solvers, and the presentation at three breakout sessions. These sessions include The Ethics in Negotiation, Six Things Contract Mangers Need to Know about Six Sigma, and The Role of the Contract Manager in Sarbanes-Oxley Section 404 Certifications.

It is important for professionals in the field of contract management to take advantage of these learning opportunities, as well as the opportunity to share their knowledge as a presenter. Writing an article for Contract Management magazine, or some other professional publication, also serves the same purpose.

Every contract management professional should strongly consider their participation in professional development activities. And if it doesn’t measure up – GO DO SOMETHING!! For those of you who will be attending World Congress, look me up and say Hi.

Acquisition Workforce to Grow?

April 18, 2007 on 11:05 pm | In The Profession | Comments Off

One thing that everyone in our profession has realized is that the complexity and volume of procurement actions has steadily increased while the number of contracting professionals has dropped precipitously. Even GAO has made reference to that in several of its reports. But there may be a glimmer of hope on the horizon.

The number of contracting officers is half the number it was in 2001, while the number of contracts has doubled, according to Rep. Jim Moran (D-Va.) who wants to increase the number of acquisition employees. This would be a refreshing change since Congress has seen fit to REDUCE the number of 1102′s in the government service for every year recently. Even after Katrina, Congress saw fit to increase the number of AUDITORS(!) rather than contracting professionals. Rather than trying to spend the money properly in the first instance, Congress just wants to catch the mistakes for a good press op. Cynical? Yes. Accurate? Also yes.

Rep. John Murtha (D-Pa.), chairman of the Appropriations Committee’s Defense Subcommittee, has asked Moran to develop workforce provisions to be included in the fiscal 2008 Defense Department spending bill. The government must have more people to do the work intended for public employees, Moran said.

The average age of procurement professionals is going up by nearly a full year each year, suggesting that a mass retirement is potentially imminent. Paul Denett, administrator of the Office of Federal Procurement Policy, estimates that 20 percent of the 28,000 federal contracting employees are already eligible for retirement.

“A good contracting officer is worth their weight in gold,” said Rep. Tom Davis (R-Va.) during a speech at a recent conference. Procurement experts agree that the acquisition workforce needs to grow to handle a greater workload and fill the void from a potentially massive number of retirements.

As important as the total number of contracting professionals is the fact that more complex procurements demand more highly skilled professionals. In some cases people might claim 25 years of experience when in fact they have only one or two years of experience many times over. They know what they know and do it well, but that is all they know. Skill development is not keeping pace with the demands of the job. Paul Francis, director of acquisition and sourcing management at the Government Accountability Office (GAO), said the composition of the workforce — what skills are necessary to match future needs — is as important as the quantity of workers.

“Numbers don’t tell the whole story,” he said.

We can only hope that Congress is serious this year about remedying this growing problem. With literally billions at stake, we need well trained, experienced, and trusted professionals in those positions. We can do more with less for just so long, and then the system fails. We can ill afford problems or scandals at any point in time, but at this critical point in our nation’s history such failures would be all the more devastating.

Contact your Congressman, and Rep. Moran. Tell them you support this initiative and encourage them to not allow it to find itself on the cutting room floor during committee work. It is just too important.

Portions of this information were gathered from www. fcw.com/article98238-04-16-07-Print, accessed 04/18/07.

FAR To Be Printed Only in LARGE PRINT EDITION

March 21, 2007 on 8:15 am | In The Profession | Comments Off

There is concern about how the average age of contract management professionals is steadily rising. We do not have enough young people joining the profession to fill all of the needs that will continue to exist – in fact grow – over the next 15 to 20 years. If we do not act soon, we will only need to publish the FAR in a large print edition!

It is well known and accepted that there are very few degree programs that channel folks into our profession. The vast majority of us came from related disciplines such as law, accounting, finance, and admin. Much of the training that occurs is OJT, and many will admit that they wanted to get out of whatever they were doing and an opening came up in contracting. Not quite the well thought out career path!

Still, as our average age increases, what are we doing to entice more young people into what we consider our life-long profession? More specifically what are YOU doing?

One thing that CCS has started is to form two groups within MySpace. MySpace.com is a social networking site made extremely popular by teens. In more recent times it has gotten very popular with a more mature membership who are using the site not just for social networking, but for business networking. There are, as of today 19,899 business groups and over 164 million members! Those are pretty impressive numbers any way you look at it. We started two groups within MySpace – one specifically to promote the National Contract Management Association and one to simply promote the profession. These groups can be found at http://groups.myspace.com/OfficialNCMA and http://groups.myspace.com/governmentcontractingprofessionals . Membership in MySpace is free and all you need to get started is a digital picture of yourself (or your dog, or cat, or favorite
South Park character – people use almost anything!). Once you are signed on, look up the two groups and join us. We are trying to get some interesting dialog going there, and in the process attract some of the younger demographic into our profession. To do that, we need more experienced members to be in the group to answer questions, share thoughts, and possibly mentor others.

Do your part to keep the pipeline full. Share your thoughts on what else we might do to promote contract management as a worthy career goal.

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