Challenges With Spare Parts
In reference to, “Defense Auditors: Why So Many Spare Parts?”
(July 21, NationalDefenseMagazine.org/blog), we are a service-disabled, veteran-owned small business whose only customer is the U.S. government, and one of the top 500 Defense Logistics Agency suppliers.
All our contracts are firm fixed-price and we compete by being the lowest price on the solicitation. Even after being the lowest bidder, the solicitation is then subject to negotiation, then put on a reverse auction and negotiated again. Once awarded, we are immediately asked to expedite delivery at no additional expense to the government.
From our perspective, the government is expecting cost and pricing that is unrealistically low, often below our cost to produce an item. They are also waiting way too long to award the contracts for the spare parts given the lead times needed to supply them.
As far as holding inventory for the government, we have found that unless the government is willing to commit to purchasing the parts, having inventory on hand is prohibitively expensive for small businesses with no guarantee of sale. We know other small business suppliers that have millions of dollars worth of inventory that may never be bought by the government. That cost comes off the bottom line and needs to be considered when quoting the government.
We do not disagree that the parts procurement process is broken, just in ways other than what you describe in your article.
James M. Dyle
Coordinated Defense Supply Systems Inc.Fixing Defense Acquisition
In regards to Lt. Gen. Lawrence Farrell Jr.’s July 2013 editorial, “Time Is Right to Clean up Defense Acquisition,”
you have identified a most critical problem by describing what is happening in the current defense acquisition process. Most of the Defense Department program managers are PMs without meaningful technical backgrounds in the topic areas for their projects.
Until the late 1980s or mid-1990s, one encountered PMs with advanced degrees.
Contractors were expected to defend their ideas and products. The discussions were focused and challenging.
The situation changed quite quickly. Many PMs are primarily concerned with schedules and spending rates. They cannot discuss technical matters meaningfully, if at all, and they may have to engage other contractors to explain what might be going on. As you’ve pointed out, this creates a very steep, slippery slope with disastrous consequences to our technological/industrial base, national economy and national defense.
The same holds true concerning the topic addressed in the July 2013 column by Sandra I. Erwin, “Pentagon Tries to Recapture Tech Glory Days,”
on the ability to efficiently and effectively initiate and perform critical defense research and development.
We may not be able to change the current situation until we can develop an effective government-industry-university partnership, and ensure that the right people are in place. Unfortunately, this cannot be changed by governments or universities. The initiative must be taken by the defense industry, in cooperation with universities, to convince government — possibly through Congress, if it can get its act together — to change the way defense acquisition is done, from concept, through R&D, to industrial production and operational implementation.
Center for Infrastructure
Protection and Physical Security
University of Florida