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Procurement Chief Seeks 'Best Product at the Best Price'

By Gerry J. Gilmore
American Forces Press Service

WASHINGTON, March 26, 2002 – The Defense Department is adopting the latest technology and private-sector business practices to provide U.S. troops with "the best product at the best price," DoD's senior procurement officer said March 8.

Deidre A. Lee, director of defense procurement, said ongoing modernization of DoD's contracting and procurement systems has the dual benefit of enhancing national security and saving taxpayer dollars. Lee is responsible for the implementation of procurement and contracting policies involving more than $130 billion of annual business.

As an example of change, Lee said DoD once used an inefficient, slow and costly drug warehousing system. To transform the way DoD conducts its pharmaceutical business, she said, defense officials looked to private-sector practices.

"Defense Logistics Agency stepped back and said, 'OK, how does the commercial entity do this? How do hospitals and doctors around this country manage this supply?" Lee said.

DoD now buys pharmaceuticals and shipping service on a "just in time" basis so customers get what they need when they need it, she explained. That means no stockpiling and no overhead needed to maintain warehouses.

"We're still buying," Lee noted, "but we're buying more of a service. That quicker delivery of product, of course, generally results in a lower price, and certainly, a more modernized process."

This way, Lee said, warfighters and other DoD customers "get pharmaceuticals that are well-managed, the latest, properly shipped and properly maintained. That's a better way of doing business," she noted.

Technology, Lee emphasized, is playing an ever-expanding role in contracting proposals and selections, contractor- customer communications, payments, and the timely delivery of products and services to customers.

For example, she saluted procurement specialists for doing an "exceptional job" in quickly fielding the Joint Direct Attack Munition, a 1,000- or 2,000-pound iron bomb given a guidance package that relies on inertial navigation and global positioning systems. Kits used to convert bombs in the field weigh about 100 pounds and cost about $18,000.

Lee described the JDAM development program as "highly successful," because it was accomplished quickly -- less than three years -- and produced a highly affordable weapon. The estimated average cost of the first 40,000 units is less than half the target price specified in the initial requirements document for the program, she said.

Besides its relative low cost, JDAM's performance has been excellent, as evidenced by its extensive, successful use in Afghanistan. DoD has accelerated production of the weapons to ensure adequate numbers are available.

DoD worked closely with contractors during JDAM's development, Lee noted. It fast-tracked development by encouraging the contractor to use appropriate commercial specifications, parts and quality systems, she explained. DoD insisted low cost be a major consideration in the design process, she said.

Lee added that DoD required from the outset that the precision-guided munition be developed with the Navy and Air Force in mind so both services' aircraft could use it.

"It's incredible, as we watch what's happening in Afghanistan, what our weapon systems (and) the people behind them can and do accomplish," she said.

Lee praises DoD's contracting and procurement people. "They know how things work, they know how things should work, and they have great ideas on how to improve them," she emphasized.

Regarding new ideas, Lee noted that DoD has received more than 12,500 responses inside and outside government to its Broad Agency Announcement last October seeking ideas and concepts that could be quickly implemented to fight terrorism.

Every BAA response is being reviewed, Lee said, adding that some suggestions involve methods to locate difficult military targets. Some ideas, she added, have already been identified for further discussion.

"And, there are a few that are already at the level where we think we'd like to fund them," Lee concluded.

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