DOD launches next logistics system

The Defense Logistics Agency is taking an unconventional approach in a contract to improve the logistics support provided to the military services' maintenance centers.

From the beginning DLA's procurement tactics on its Virtual Prime Vendor (VPV) solicitation have departed from the traditional. When the agency posted a notice in the Commerce Business Daily last month seeking industry participation the agency also placed advertisements in such publications as The Wall Street Journal. And instead of asking for a response to a technical specification DLA is requesting "concept papers" detailing the bidder's plans for boosting logistics support.

"It's a competition for ideas as opposed to an end product " said Navy Capt. Bill Jenkins deputy director for procurement at DLA. "DLA cannot define the ultimate solution we are looking for industry to help us do that."

DLA is conducting VPV as a broad agency announcement (BAA) an approach used historically in research and development projects. The call for papers has an administrative deadline of Dec. 12 although Jenkins said the BAA would remain open beyond that deadline.

In its call for papers DLA is seeking an industry team to propose ways of partnering with the agency to provide integrated supply-chain management. The traditional supply chain involved manufacturers distributors and the Defense Department logistics system acting as independent entities all of which have fallen "out of step" with customer requirements according to the CBD notice. What DLA envisions is an integrated supply chain that employs revised business practices and such technologies as electronic data interchange to link the formerly independent groups.

The goal of integrated supply-chain management is to tap commercial distribution channels to get DLA out of the costly business of maintaining inventory. One challenge to industry will be how best to deal with the surge in demand for supplies during times of military mobilization. Demand forecasting will be a key issue Jenkins said.

"We have to be able to rapidly respond to needs and in years past we did [that] by holding inventory " Jenkins said. "Because holding inventory is too costly we have to prove we can tap into the commercial distribution channel and support the warfighter with equal and better sustainment." Jenkins said the integrated supply-chain management approach will not apply to ammunition and other "unique military end items" that require greater security in handling.

DLA believes teams of systems integrators developers universities and research institutes will respond with papers. In the integrator community BDM International Inc. Computer Sciences Corp. Electronic Data Systems Corp. and Lockheed Martin Corp. are experienced in DOD logistics work. A CSC spokesman said the company is looking at VPV.

Bob Dornan senior vice president of Federal Sources Inc. said he was encouraged by DLA's search for innovation. "They at least appear to be wide open to suggestions " he said. He added however that companies may be reluctant to fully detail their solutions out of concern that their ideas would be cited in a request for proposals. DLA however does not mention a forthcoming RFP in its CBD notice. The notice states only that DLA reserves the right to select all some or none of the concept papers.

Before DLA commits to any ideas the agency plans to conduct proof-of-concept tests Jenkins said. He said the agency will validate the new logistics procedures "before we tear down infrastructure that supports warfighters."Although VPV is different DLA's BAA is similar to more typical procurements Jenkins said. For example the VPV BAA will be conducted competitively. Technical-evaluation criteria established for VPV include enterprise-linked logistics information technology management plan industrial readiness past performance competition goals small disadvantaged business participation and DLA mentoring business agreements.

The DLA's BAA approach will be used in future deals as well but it is not applicable in every case. "DLA will selectively use BAAs in areas where we are clearly charting unknown territory " Jenkins said. "Where we can define the requirement with reasonable assurance we will use a request for proposals."