Fort Belvoir, Virginia –
Senior finance and logistics personnel from the Defense Logistics Agency and the Defense Department discussed cost savings and stewardship during the DLA Cost Summit June 29 at the McNamara Headquarters Complex.
The meeting followed two previous cost summits, held in December and March, which educated customers on how DLA bills the military services and how the service’s requests for materials can impact costs.
Co-chaired by DLA Finance Director Tony Poleo and Mike Scott, deputy director of DLA Logistics Operations, the summit also included senior officials from the Army, Air Force, Navy and Marines, as well as representatives from DLA’s field activities.
“As you know, those of you that have participated in all the summits, it’s a journey,” Poleo said. “I think we keep getting more and more transparent at a lower and lower level. I will say that in my tenure, which is a long time here, I don’t think we’ve ever gotten this transparent with the services. … We’re trying to be transparent about where we’re really incurring costs, and not necessarily how we’ve been charging you, because that’s not always one and the same.”
By laying some of those cost factors out, both the military services and DLA can be more informed in making changes to cut costs, Poleo said, adding that DLA’s pricing structure needs to be responsive and reactive to those decisions.
“Obviously the cost summit is in the vein of maintaining and collaborating with our customers to really show you better where costs are being occurred,” he said.
With DLA’s first full audit scheduled for September, keeping track of costs doesn’t just make good business sense, but it’s good stewardship as well, Poleo said. Financial stewardship is one of the five key goals DLA Director Air Force Lt. Gen. Andy Busch outlined in the recently released DLA Strategic Plan.
“As good stewards of our customers’ and ultimately the taxpayers’ dollars, we must be more precise about forecasts, cost comparison and cost reduction,” Busch wrote in the plan. “When should we strive to be more transparent to our customers and show the full cost of doing business – how costs impact pricing? This goal provides an opportunity to ensure we help the customer be more efficient by providing accurate numbers and detailed information.”
Other agenda briefings included cost trend comparisons of the top items requisitioned by the military services, program budget reviews and DLA’s operating costs compared to the commercial sector.