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News | Aug. 20, 2015

DLA Energy continues helium support for universities

By Christopher Goulait DLA Energy Public Affairs

The Defense Logistics Agency Energy’s pilot program to provide academic researchers with helium for use in their federally funded research resulted in savings of up to 27 percent for several universities.

DLA Energy partnered with the American Physical Society and the American Chemical Society for a proof of concept program to supply seven universities with an affordable and reliable liquid helium supply for their academic research.

“On average, we saved between 14 and 16 percent versus what the universities were getting their product for, and in one instance, we saved 27 percent,” said Doug Smith, chief of the DLA Energy Aerospace Energy Supplier division. “The best news is this savings was inclusive of our cost recovery rate, or overhead, so DLA has recouped our costs and the customer is realizing that per unit savings.”

The idea for the program originated from a 2013 federal helium users group when a university representative was briefing on problems obtaining a consistent source of supply at good prices, Smith said. A proof of concept idea was developed, interest was solicited and 30 universities initially applied.

Several meetings narrowed the pilot program to seven universities, he said. Seven were chosen to be a geographically representative sample with variety between large and small requirements. Those universities provided information on what they required, how much, where and how often.

DLA Energy leveraged its relationships with helium vendors to benefit the universities.

“We have a number of helium vendors with whom we already do business in support of our existing (mostly Department of Defense and Department and Homeland Security) customer base,” Smith said.  “These vendors knew how we did business, knew our terms and conditions and knew what we were looking for, and we similarly knew they could do the work.”

The agency could also count on economies of scale to save money.

“In this case, we wrapped up seven locations on a single solicitation, so instead of the local vendors each bidding on just the one location, we were able to negotiate on behalf of all seven universities at once,” Smith explained.

“The universities being part of a federal program and part of a large consolidated buy provides some leverage in making sure they are not subject to the vagaries associated with helium shortages as occurred a couple of years ago,” added Ken Grams, chief of the Aerospace Energy Customer division.

The helium is primarily used to cool down analytical equipment like nuclear magnetic resonance machines, or it can used in superconducting experiments, Grams explained.

In addition to an average of 15 percent savings, access to helium for some customers was improved, said Mark Elsesser, a policy analyst with the American Physical Society.

“DLA was able to provide affordable and reliable liquid helium for users who may not have had access otherwise,” Elsesser said. “Professor Catherine Clewett (from West Texas A&M University) was having difficulty establishing a relationship with a helium vendor because they were a new, small customer. Through the program with DLA, she now has a reliable source of helium at a stable price.”

“From APS’s perspective, the program is a big win for the community,” he said.

Smith agreed, and said it was a success for DLA Energy as well. The helium contract has been awarded and now the agency’s Aerospace Energy team will ensure the ordering process is followed and the vendor delivers.

Following the results of the pilot project, DLA Energy is now planning a second phase to the program.

“We anticipate due to the value DLA offered the universities in the proof of concept, it is likely to have more universities interested in joining the program,” Smith said.

“Our goal in phase two of this project will be to line up our DoD customers and these universities together and make the economies of scale even greater,” he continued “More interest from vendors because of more opportunities equates to greater competition and better pricing for all of our customers. An increasing customer base means we can spread our overhead across a greater customer base, so costs go down to all even further.”

“We are excited for the potential to grow our customer base while saving taxpayer dollars, and ensure this important research is able to be completed,” Smith said.