Jun. 12, 2014 - By MARCUS WEISGERBER – Defense news
WASHINGTON — The organization that oversees the Pentagon’s vast supply chain and logistics empire is planning to shrink its yearly business as the US military prepares to exit Afghanistan.
The Defense Logistics Agency (DLA) is preparing to cut $13 billion out of its materiel and operations costs between 2014 and 2019, Vice Adm. Mark Harnitchek, the agency’s director, said Thursday.
“We’re going to be a lot smaller in terms of our people, our infrastructure, our inventory and our financial footprint by virtue of the fact that we’re a service organization,” Harnitchek said at a Defense Writers Group breakfast. “If the department’s budget is less by 30 percent, I have to be less by 30 percent because they have 30 percent less money to buy stuff from me.”
The agency spends about $40 billion per year on military items, such as food, fuel, uniforms, medical supplies and construction equipment. The military calls this type of equipment and supplies materiel.
DLA is looking to use reverse auctions, long-term contracts and performance-based contracts as a way of reducing its costs for these types of items, Harnitchek said.
“We have to be ready to significantly improve support at a whole lot less cost,” he said.