News | June 7, 2018

Full transparency, trust are key goals of DLA’s 10th Cost Summit

By Beth Reece

Operations and finance officials from the Defense Logistics Agency renewed their goal of transparency on all things cost related with the 10th Cost Summit at the McNamara Headquarters Complex June 4.

The meeting, held twice a year to update military customers on financial issues affecting the agency and service customers, was co-chaired by DLA Finance Director Gretchen Anderson and Mike Scott, deputy director of DLA Logistics Operations. Attendees included guests from the Office of the Secretary of Defense, each branch of the military services and DLA major subordinate commands.

“I remember 10 Cost Summits ago when we first came up with the idea of bringing folks together,” Scott said. “At that time there was a fair amount of cross service/DLA dialog on the cost topic. Lately, from where I sit, it’s getting back to that kind of fevor pitch, so I would encourage everybody, whatever is on your mind, share it.”

Anderson welcomed guests and introduced them to the new DLA Cost Transparency brochure, which lists information such as sales breakouts, cost recovery rates and comparisons and DoD fuel facts. We’re all about disclosing costs and transparency here, she said.

DLA Finance’s Kevin Abney provided an update on the Program Budget Review 2020, noting that the agency expects to continue reducing its long-term cost-recovery rates, the margin DLA charges customers to cover its operating costs. Fiscal 2018 sales for the agency’s eight materiel supply chains are projected at $25.2 billion, $1.7 billion more than planned. DLA Distribution’s processing workload has also increased. And DLA Energy pricing remains a concern, despite a new DoD-directed standard price, since the market costs DLA pays for fuel continue to increase.

Service representatives followed up with an outline of the impacts the increased DoD budget may have on maintenance and operations, and DLA Disposition Services described the return on investment of property the MSC has processed this fiscal year through April.

Patrick Cihak from DLA Logistics Operations introduced attendees to the DLA Enterprise Dashboard, which provides a near-real-time view of readiness rates for platforms and weapons systems operated by the services. The Dashboard, a compilation of metrics from DLA systems and the services’ common operating pictures, is expected to help officials improve readiness through close scrutiny of supply metrics like materiel availability and backorder status.

DLA officials also announced the creation of DLA Logistics Operations’ new Service Readiness Demand Planning Summit, which is expected to improve DLA planning by giving the services a chance to provide input on influences such as changes in operational tempo and maintenance schedules. The first summit will take place July 12-13 at the McNamara Headquarters Complex Commanders’ Conference Room.

Other topics included market basket review, audit readiness and material obligation validation.