Book Description

Section 347 of the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 requires us to evaluate the extent to which the Defense Logistics Agency has implemented best commercial inventory practice initiatives contained in a schedule submitted to Congress on May 19,1998. The National Defense Authorization Act for Fiscal Year 1998 required that the Agency develop and submit the schedule and that implementation of the initiatives be completed by November 2000. A best commercial inventory practice is defined in the 1998 act as a practice that enables the Agency to reduce inventory levels and holding costs' while improving the responsiveness of the supply system to user needs. Many of the initiatives in the schedule are long-term contracts in which the Agency agrees to purchase items from a vendor for 1 or more years or corporate contracts in which multiple requirements with the same vendor are consolidated under one contract. These initiatives reduce or eliminate processing individual purchase orders and leverage the Agency's buying power to obtain lower prices. Other initiatives use techniques such as prime vendors under which a portion of the inventory management responsibilities are transferred to a single vendor, allowing military customers to order supplies only as they are needed and receive supplies on a timely basis. The schedule also includes electronic commerce initiatives that enable Department of Defense customers to search for and order supplies electronically.