DLA Plans for $13 Billion More in Budget Cuts Despite Recent Furloughs

GOVERNMENT CONTRACTING TIPS

System for Award Management ProblemsEven after the furlough of hundreds of employees, the Defense Logistics Agency (DLA) plans to perform over $13 billion more in budget cuts.  According to GovernmentContractingTips.com, the DLA told their customer service representatives to  only come into work Tuesday through Thursday.  This furlough work schedule lasted 6 weeks for some federal employees and 8 weeks for other employees.  Now just when it seems the dust has cleared for this agency the DLA Director Vice Adm. Mark Harnitchek  announced this past weekend that the DLA plans to cut back $13 billion more in operating and material costs.  Defense contractors are expected to play a large role in Harnitchek’s 13-in-6 strategy.  The 13-in-6 strategy is designed to follow last year’s plans of extended cost-cutting.  These measures are scheduled to lead all the way to 2019.

 

These budget cuts all sound well and good on paper, but has there truly been any real differences made from this 13-in-6 strategy?  According to Tonya Johnson, DLA Spokeswoman there has been a significant amount of reduction from this strategy.  The DLA reported a recorded reduction of $3.6 billion this year.  The DLA has determined that their total operation costs for a full year is about $2 billion, which half goes to infrastructure costs to properly maintain materials in stock.  “We can’t afford to have stuff we just don’t need.  This is an example of money that will go back to services,” stated Harnitchek.  The DLA plans to improve their strategies by implementing the following:

 

  • Partnering with industry to reduce excess inventory and increase use of reverse auctions.

 

  • Reducing contract delays, lowering pricing and using performance-based logistics, an acquisition model that rewards contractors for improving products and processes and delivering services faster.

 

  • Increasing small business opportunities.
  • Improving planning and forecast accuracy for purchasing items.
  • Consolidating and co-locating infrastructure, including limiting the number of DLA warehouses.

The DLA is in charge of creating CAGE codes for contractors interested in becoming properly registered government contractors.  In the recent weeks, due to the furlough of DLA customer service representatives System for Award Management (SAM) registrations have been back up.  Now that these federal employees have been back to work, more registrations have started to become approved.  US Federal Contractor Registration Case Managers have been working tirelessly properly registering contractors in SAM in the wake of these furloughs with the DLA.

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