Army launches $1 billion wholesale logistics project

The Army last week kicked off a billion-dollar-plus project to modernize and eventually privatize key elements of its wholesale logistics system, which supplies troops with everything from helmets to helicopters.

The Wholesale Logistics Modernization Program (WLMP), which includes a $9 billion inventory managed by the Army Materiel Command's Communications-Electronics Command (Cecom), Fort Monmouth, N.J., goes far beyond developing new automation systems, according to Maj. Gen. Norman Williams, deputy chief of staff for logistics at AMC. Williams said in a recent speech that the Army needs "a revolution in military logistics" because top Army leadership "began to realize several years ago that the way we conducted business, and especially logistical business, was not keeping pace with commercial practices."

Currently, the Army relies on what Williams characterized as "a mass-based logistics system" consisting of a large inventory of parts and systems required to satisfy the Army's former "just-in-case" mission requirements. The Army wants to use WLMP to switch to what Williams called "a distribution-based system— one that relies on velocity instead of mass."

Thomas Michelli, former commander of the Army Information Systems Activity at Fort Monmouth and now a consultant, described this approach as "the just-in-time delivery" system used so well by Wal-Mart Stores Inc. as well as other commercial companies.

The request for information for WLMP released by Cecom puts adoption of the best commercial practices at the top of its requirements and emphasized that the Army wants to use proven commercial methods and systems without having to adapt them to its needs.

New information technology systems will play a key role in the WLMP program, according to A. David Mills, principal deputy for logistics at AMC. The Army's current wholesale logistics management system consists of the Commodity Standard System and the Standard Depot System and associated applications. The two systems run at Defense Department megacenters operated by the Defense Information Systems Agency and are supported by Central Design Activities (CDAs)— which design software— in St. Louis and in Chambersburg, Pa.

Both of these systems, Mills said, "were put in [in] the early 1970s, and all the state-of-the-art capabilities [developed over the past two decades] have [passed] us by."

AMC intends to use WLMP to upgrade these systems by privatizing the logistics software support functions. Another key component of the RFI asks potential contractors to describe how they would provide for the continued employment of the personnel working at the two CDAs. AMC also wants bidders to assess the future role of the DISA megacenters in the WLMP, asking them to present scenarios ranging from a retention of the status quo to a contractor-operated system to a partnership between DISA and a contractor.

Michelli estimated that the Army spends about $110 million a year on logistics IT and would like to see costs pared. But, Michelli added, "the real money in this contract is in helping the Army whittle down its inventory."

Cecom has put WLMP on a fast-track schedule, with responses to the RFI due March 23 and a draft request for proposals planned for release in April. Cecom anticipates that it will end up with three bidders. Industry sources expect Boeing Computer Services Inc., Electronic Data Systems Corp., Lockheed Martin Corp., Raytheon Corp. and TRW Inc. to respond to the RFI.