View of Defense Logistics 2010

MLF 2009 Volume: 3 Issue: 10 (November/December)

To that end, MLF asked the same question to look for common threads to purposes. Industry leaders were asked, “Regardless of what the budget numbers for FY11 and beyond may refl ect, the next few years will be infl uenced by the drawdown in Iraq, the buildup in Afghanistan, the need to revitalize heavily used equipment sets, and BRAC—all during a time of expected reduced funding in many programs. With that as the foundation, what are your views on the challenges that face industry as it prepares for these years of change, and what is your company doing to serve the DoD customer in this new environment?”

Here is what they had to say.

AAR Corp.
Randy Martinez
Senior Vice President
Government & Defense Programs
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The biggest challenge we see for both industry and the Department of Defense will be the vast amounts of equipment and kits purchased for the Iraq war with supplemental funding. Much of this equipment is not in a program of record and therefore has ephemeral sustainment lines. During the Iraq war, redeploying units were directed to leave their equipment in Iraq for newly arriving combat forces. As equipment wore out in the combat zone, stateside equipment was shipped to replace it.

Ultimately, the only available stateside combat equipment sets were those used for pre-mission training for units preparing to deploy. Today, there are over 2.8 million pieces of U.S. equipment in Iraq—ranging from Abrams tanks and Bradley fighting vehicles to individual gear. This includes over 50,000 vehicles and 90,000 20- and 40-foot containers.

The services will likely do four things with this equipment— send some to Afghanistan; issue some to Iraqi units; return it to the U.S. for reset; or dispose of it. Services wanting to keep this equipment will be challenged to find reset and sustainment dollars.

The challenges facing service planners and their industry partners lie in determining how much supplemental money Congress will provide to affect these four alternatives. Without a clearly defined plan, or worse yet, a plan subject to the vagaries of Congress, the services and industry will struggle to accurately forecast how they might provision or service this equipment.

We believe that industry will not risk manufacturing spare components without contractual agreement. Therefore, repair part pipelines will shrink overnight. This will put a premium on those companies with an innate ability to manage supply chains in an environment of diminishing manufacturing sources and items pending obsolescence. AAR’s Defense Systems and Logistics professionals are the gold standard for SCM in this environment. AAR currently manages over $1 billion in assets for the government and has a superb performance record on programs as diverse as the U.K.’s AWACS, the USAF JSTARS, and the FMTV reset program at Red River; and on programs as small and complex as the Air Force Special Operations Command’s DIRCM.
 

Agility Defense & Government Services
George H. Allen
Senior Vice President, Business Development
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Unquestionably the military will go through great changes in operations tempo over the next few years. While there is a troop drawdown from Iraq that appears imminent, there is also a shift to Afghanistan. The shift to Afghanistan is a vastly different operational model than that of Iraq. The terrain is rugged, and the logistics support footprint is very different.

In addition to the above, there are three changes that impact logistics support: the movement of the Army Materiel Command community, the move of Forces Command, and the continuing need to provide all the depot level maintenance and logistics support to reset the force.

The latter is a very different type of logistics than the operational contingency based logistics we have seen for the past several years.

To prepare for this, we have shifted our priorities to match that of the force structure. We have concentrated on the massive movement of material in two ways: first, to get it out of Iraq as the drawdown approaches and second, to get it into Afghanistan to support the forces there. We have coordinated a joint operations office with our commercial arm to provide support on the ground (and over the transportation lanes) in the Afghan theater. We have also invested heavily in developing local sources of supply and supply support capabilities in that theater. We are prepared to invest in more commercial infrastructure in the Afghan area of responsibility as needed.

We have established partnerships with the maintenance contractors to ensure the material is moved rapidly and redistributed in an efficient fashion once DoD has decided where it goes and how it will be restored for readiness.

The challenges will be around the massive effort the U.S. government has to plan for this, developing the appropriate scope of work, and providing appropriate contract management to oversee all the private sector support needed to accomplish the diverse and massive set of logistics objectives that surround the core mission: providing for peace and stability in all theaters.
 

ITT Systems
Michael Gulino
President and General Manager
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The drawdown in Iraq and the buildup in Afghanistan will require continued flexibility by ITT, as well as other companies that support our nation’s service men and women in the Middle East area of operations. This has always been the case, and it is incumbent upon us to have the process and procedures in place to adjust to the inevitable change that is going to occur.

Lean will become the norm, and possessing the ability to adopt value-based improvements that achieve cost/quality-efficiencies across the life cycle spectrum of contractor supplied products and services will become a critical enabling element. The customer’s need for vehicle maintenance and logistics support in Afghanistan may require industry to adjust to lean changes, from heavy equipment maintenance support to providing more services to agile and light brigade sets.

Constant situational awareness and fluid/dynamic mission-area objectives will drive industrial/military partnerships to greater degrees of reliance to meet operational needs of engaged forces. Partnering and in-depth collaboration across the acquisition/execution environment will be paramount to meeting these needs.

As we prepare for buildup in Afghanistan, an important aspect for industry is to effectively support the restructuring of our Army customer sets that are now led by the newly realigned Army commands.

We are committed to providing continued support to the region and are well positioned to do so through our participation in key logistical support contracts such as First, GMASS, LOGCAP and others. It is our mission to provide the required support at whatever funding level is provided and wherever it is needed. We look forward to demonstrating the flexibility to accomplish that mission.
 

KBR
Bill Bodie
President
KBR North American
Government and Defense

Our industry must deal with a multitude of challenges as we assess emerging priorities for our deployed forces in Iraq and Afghanistan. We expect that with troop levels in Iraq going from approximately 130,000 today to 35,000-50,000 in 2011, the need for logistics support services will remain, albeit at a smaller scale. The escalation of activities in Afghanistan will create additional requirements on the part of the Army and Air Force for construction, operations and maintenance support.

The recent economic downturn adds an additional competitive dimension to the market environment, as more commercial firms are pursuing a broader range of government contracts. That means that traditional government contractors must work doubly hard to validate their value propositions. They must also contend with the fact that multiple award task orders, many with fixed-price elements, have become the preferred contract vehicles for the government.

Therefore, even though a company may be awarded a contract, there is no guarantee they will actually get work; they must still compete for a greater number of task orders with smaller revenue values. At the same time, the government is planning to increase its acquisition work force to enable better management of contracts and increased oversight. And, of course, there has never been greater scrutiny on contractors than in today’s political environment. Taken together, our industry faces substantial market changes as we move toward 2011 and beyond.

In spite of these pressures, KBR will continue to provide the unparalleled support that we have always given our customers. Our record in the field along with our accumulated domain knowledge and technical experience has established us as a reliable, experienced and trustworthy partner. KBR brings the military the resources and expertise to execute multiple task orders simultaneously, to respond to rapidly changing customer requirements, to deploy employees globally to remote and austere contingency areas, and to provide a cost-effective construction and logistics service delivery model.

Our goal is to remain the best contingency support provider, using lessons learned and improved processes to keep pace with the military’s needs, regardless of location, deployment size, or scale of service.
 

Partnet
Don R. Brown, Ph.D
CEO
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The challenge: How do you realign your programs for efficiency? This isn’t just about changing your marketing, throwing in the word ‘efficiency,’ and calling it a day. Companies need to take stock of what they’re offering and ask themselves how it can help the government to do its job better, get the job done faster, and save resources. Everything we do has a value—and that value has to be measured against the current alternative.

Change is always costly, but will the benefit make up the cost in the long run? It’s like changing to energy-efficient lighting. It’s going to cost you money to replace that tungsten bulb with a florescent, but it’s going to last you longer, use less energy, and burn brighter. We’re at a time of incredible change in DoD; any company that is offering the same old dim lighting isn’t going to cut it. We have to offer DoD a brighter alternative and communicate the value of that alternative— not just as something that will keep the lights on longer, but help the warfighter to advance the mission.

At Partnet we run on efficiency. We operate DoD EMALL, the largest online marketplace in the government. We’ve cut out the hard-copy magazines and catalogs, we’ve cut out the delay in ordering and we’ve offered the warfighter—any warfighter, anywhere—a full catalog of supply items to choose from. We’re about getting the warfighter what’s needed as fast as possible. We’re about offering comparison shopping to save resources in the purchasing process.

Our number-one priority is to save the warfighter time, to cut all of the slack out from defense logistics and get critical supply items to the scene faster and more efficiently. We’re always innovating new ways to do this, to shave even one more minute off the processing time, or provide one more option in our distributed catalog—that’s our mission at Partnet. In good times and in bad. No matter the budget. No matter the cost. To better understand the needs and more effectively support the mission of the warfighter. ♦

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