FORT BELVOIR, Virginia, Oct. 9, 2019 —
As part of a government-wide effort to increase efficiencies and effectiveness of the national supply chain, the Defense Logistics Agency and General Services Administration have several joint initiatives underway to address longstanding acquisition and logistic issues, including the first comprehensive Federal Supply Class review in almost 50 years.
"We are partnering on a number of fronts to optimize the movement of supplies to our nation's troops and reduce duplication in the federal supply chain," said Alan Thomas, commissioner of GSA's Federal Acquisition Service. "It's a great example of two agencies coming together to improve mission outcomes. FAS is rolling-up our sleeves and coordinating across offices to tackle tough challenges for our customer. It’s a new way of doing business and one you'll see more of moving forward."
FSC Review – Reducing duplication, improving buying efficiencies
The FSC review will involve all 600 FSCs, which categorize about 7 million items used by federal and military customers into groups of like items. FSC 5620, for example, includes tile, brick and block. The purpose of the review is to reduce purchasing redundancies among departments to improve buying efficiencies and customer responsiveness and readiness. It will ensure both organizations remain compliant with the strategic tenets of their longstanding agreement.
The 1971 Supply Management Relationship Agreement between the Defense Department and GSA gives DLA the authority to buy and manage supplies within assigned FSCs used by the military services regardless of their use by civil agencies. GSA manages items commonly used by federal agencies that are commercially available.
“Since then, we’ve changed, GSA has changed, our customers’ demands and buying patterns have changed, and the supply chain industry has changed,” said DLA Director Army Lt. Gen. Darrell Williams, adding that DLA was established in 1961 to reduce duplication for common items purchased across the Defense Department.
“What we are learning from the FSC review is that materiel management also varies between organizations, commodities and customers,” he continued.
Item management assignment is more complex now than it was when DLA and GSA operated similar wholesale supply systems, added Jay Schaeufele, GSA account manager for DLA Logistics Operation’s Whole of Government Division. Today, both organizations maintain contracts with vendors who deliver directly to customers. While GSA no longer warehouses supplies, DLA works with customers to forecast demand, then works with DLA supply chain representatives, vendors and DLA Distribution to ensure on-time delivery of items at customers’ locations around the world.
Building an automated tool for joint analysis
Item managers, demand planners and cataloging specialists from both organizations are also collaborating to build an automated tool that further categorizes FSCs for analysis. Once completed, the tool will produce summary-level data on all 7 million items to pinpoint specific supplies and supply groups that could be good candidates for logistics transfer. DLA and GSA representatives will then conduct a more comprehensive analysis of those items to determine if a change in acquisition strategy would lead to improved efficiencies and effectiveness for the government, customers and taxpayers. To transfer logistics management of items, both organizations must agree, and a value proposition will justify the change.
“Regardless of item transfer decisions, the process and tools we’ve developed in conducting this review provide an archive of information that supports FSC management determinations beyond the simple criteria identified in the 1971 agreement,” Schaeufele said. “This information is important as we navigate government and acquisition reform initiatives and evaluate potential economic efficiencies without losing vision of DLA’s first priority to warfighter readiness.”
Jeff Thurston, director of GSA’s Office of Supply Chain Management, said DLA’s leadership in developing the analytical tool is appreciated.
“GSA’s new business model challenges us to identify new ways to serve environments where stocking product was previously the go-to solution,” he said, also noting that the project taps deep historical roots in U.S. government supply management.
“Federal Supply Classes stem from the Defense Cataloging and Standardization Act of 1952. We are working within a congressionally mandated product identification schema used across the entire federal government and some NATO countries," he added.
Commercial Platforms Initiative – Increasing visibility of online spending
Through continued partnership and exploration, DLA is informing the development of GSA’s Commercial Platforms proof of concept. The Commercial Platforms Program will modernize how commercial products are bought by federal agencies through partnerships with commercial e-marketplace platform providers. It will enable agencies to access commercial platforms as part of a whole-of-government approach, improving visibility and insights into the estimated $6 billion of federal spending made with government purchase cards via the open market. Agencies currently lack visibility into online spending, resulting in increased supply chain risk and less time to focus on mission-oriented acquisition, said Laura Stanton, deputy assistant commissioner for Category Management in GSA’s Office of Information Technology Category.
“This three-year proof of concept will offer federal buyers easy access to e-marketplace providers and commercial products,” Stanton added. “Additionally, agencies will have better visibility and insight on purchasing patterns to bring one-off spending under management. The Commercial Platforms proof of concept offers a way for agencies to access commercial platforms as part of a whole-of-government approach, strengthening GSA’s commitment to maximize the government’s buying power through economies of scale.”
Category Management – Leveraging the government’s purchase power
In category management, DLA and GSA are supporting category management goals by consolidating purchasing, tracking and analyzing spending, and taking advantage of government-wide and best-in-class acquisition vehicles.
Supply Chain Management – Building resiliency and efficiencies
DLA and GSA are also collaborating to address supply chain issues like cybersecurity, counterfeit parts and fraud, and are working with the military services to determine best shipment routing.
“Together, DLA and GSA are managing risks within the national supply chain to build resiliency and efficiencies,” Schaeufele added.