DLA strengthens supplier alliances during pandemic

By Beth Reece DLA Public Affairs

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COVID-19 has made the Defense Logistics Agency more aware than ever of the challenges and flexibility of its 11,000-plus suppliers, said the agency’s chief of acquisition programs.

“We already knew through events like hurricanes that the defense industrial base can quickly respond to the nation’s needs by doing things like adjusting their production lines. What our suppliers have managed to do in response to a pandemic that quickly impacted the entire globe is remarkable,” said Glenn Starks.

As DLA employees moved to mass telework March 16, agency acquisition professionals began tracking suppliers’ status and market conditions through daily updates from DLA’s major subordinate commands, calls with vendors, coordination with the Office of the Under Secretary of Defense for Acquisition and Sustainment, and partnering with the Defense Contract Management Agency. Those that hadn’t closed in March due to precautions or employee infections closed their doors in April in compliance with state mandates, but DLA continued reaching out through phone calls, emails and a structured question-and-answer survey that gave the agency specifics on production and shipping delays, how long suppliers expected to be closed and more.

“The survey was an easy way for our suppliers to report back to us in a structured way on how the pandemic was affecting them. On top of that, many of our suppliers were talking directly to our contracting officers, so we had multiple methods of gathering intel,” said Luis Villarreal, DLA’s industrial capability and Warstopper program manager.

Few contracts have been cancelled during the pandemic because staff at DLA MSCs like DLA Troop Support are working with suppliers to address concerns like production line disruptions and smaller staffs, Starks said.

“In some cases, suppliers have just 10 people working at a time versus 40, so we worked with them to modify contracts to make it easier for them to meet our needs. It was a collaborative process, and we’ve had to be flexible to resolve issues that none of us had a way of foreseeing or mitigating,” he continued.

Some suppliers enacted contingency plans by moving operations to other company locations, for example. DLA also participated in a two-day virtual information event hosted by DOD’s Joint Acquisition Task Force in July on increasing domestic sources for personal protective equipment. About 75% of participating vendors had never done business with the government before, said DLA Ombudsman Tim Stark.

While the pandemic has highlighted the need to increase the amount of U.S. suppliers that can meet DOD and whole-of-government needs, Starks said it’s also attracted 37 companies that hadn’t previously done business with DLA.

“A lot of those were small businesses, and that opens up a whole new market for them with DOD while helping America’s small businesses economically,” he said.

All DLA suppliers but three had reopened by early October though Starks said some may temporarily close again due to employee infections. The three that hadn’t reopened went out of business, one of them due to retirement rather than economic issues.

“Now the problem is layoffs. How many companies are laying people off and what’s the impact to DLA? So far the layoffs we’ve tracked have been on the commercial side rather than government,” he continued.

The agency will continue tracking vendor statuses and assessing impacts to DLA as long as the virus persists, and DLA’s understanding of things like industrial limitations and opportunities is expected to grow through a DLA-funded research and development effort called Applied Market Intelligence in Defense Acquisitions. Villarreal said AMIDA will use data sources and business techniques to provide details on market dynamics, supplier capability and capacities, and should-cost pricing models for improved warfighter support.

“This is work that very few people in the government do on a regular basis although private industry actually dedicates 10% of their acquisition workforce to doing just that,” he said. “We have some neat electronic tools now that can help us institutionalize our process for market intelligence and could help us get better prices in the future.”