Senior leaders from the Defense Logistics Agency and DLA Disposition Services, and ship recycling industry representatives met to discuss methods and ideas to develop partnerships during a “Captains of Industry” meeting March 5 at the McNamara Headquarters Complex.
The Captains of Industry meetings have helped establish strong relationships with suppliers and vendors in DLA’s various supply chains, leading to cost savings for the agency, DLA Director Navy Vice Adm. Mark Harnitchek said.
“DLA last recycled a Navy vessel in the 1990s before that mission was given back to the Navy,” he said. “In 2014, DLA will begin offering ship recycle contracts.”
Before beginning an open dialogue, Harnitchek briefed the panel on DLA’s overall global support footprint.
“We have a presence all over the world,” he said. “We move stuff and the information about the stuff. We are holding these meetings with industry representative from our supply chains to develop partnerships and learn better ways of doing business. The ultimate result will be cost savings and increased support to our No. 1 priority: the warfighter.”
Glen Clark, director of the Inactive Ships Office for Naval Sea System Command, explained his command’s current ship dismantling operation and talked about issues involved with the process.
“NAVSEA took back the ship disposal project from the Defense Reutilization and Marketing Service [now DLA Disposition Services] in 1998,” he said. “Between 2000 and 2011, 63 ships were scrapped successfully under SDP contracts.”
Currently, there are 54 inactive ships in the inventory, he said, but only six of those will be offered for sale to recycle. He explained that some ships are transferred to the General Services Administration, offered through the Foreign Military Sales program, or used to create artificial reefs.
Army Col. Richard Bezold, DLA Disposition Services’ acting director, said DLA has a target goal of offering three ship recycle contracts in 2014, beginning with opening bids projected for Aug. 14 with contract award by Oct. 14.
“We have four key considerations to look at in writing these contracts,” Bezold said. “We must be compliant with rules and regulations in regard to removing hazardous materials, perform proper demilitarization, the process must be executed in a timely manner and the correct Environmental Protection Agency and Occupational Safety and Health Administration notifications of sales must be done.”
Bezold opened the discussion between the industry representatives and DLA senior leaders by asking how DLA can strategically leverage its business processes to help reduce costs and what they see as cost drivers in doing business with DLA.
“We do not know very much about this type of business, so we need your help so we can learn and make this a successful partnership,” Harnitchek said.
“It’s a good time to be in the scrap business,” he said. “The type of divesture DoD is doing in Afghanistan happens about once a generation. It is cheaper to divest equipment in place than ship it home and sell it, and DLA can’t do that without industry’s help. Our partnership helps our future successes.”