The Challenge
The Defense Logistics Agency (DLA) manages the largest logistics effort in the U.S. Government – the global supply chain for the Department of Defense. The mission ranges from supplying food and water for troops to 86% of repair parts needed for military bases, vehicles, and weapons.
Being able to locate and secure necessary repair parts is essential to national security and at times a costly struggle. DLA discovered that 2 percent of them were mislabeled, mispackaged, defective, or even counterfeit resulting in items having to be left unused or thrown out.
This cost taxpayers $305 million in 2019 – about the price of three F-35 Joint Strike Fighters. Finding the correct replacement parts can take months as technicians have to parse technical documents, 2D drawings, and outdated and complex engineering diagrams to determine the exact specifications of critical replacement parts.
Traditional contracting mechanisms the DLA was required to use to source parts further complicated matters. Eager to finally solve the issue, they turned to BMNT for help.
The Resolution
BMNT worked with DLA’s Technology Accelerator (TA), which was designed to deliver prototype capabilities to the DLA – if necessary through commercial innovations. Through the program, BMNT designed a new contracting process that mirrors our Innovation Pipeline® and uses Other Transaction Authorities (OTAs) – contracts that are exempt from the traditional Federal Acquisition Regulations. The new approach quickly connected validated problems with diverse technology providers, then collaboratively and iteratively designed and deployed new solutions.
The new process uses flexible payment milestones, allowing the providers to refine their solutions and pivot as they receive feedback from end-users. It also inserts logic into the process, allowing DLA to remove unnecessary requirements that would be impossible or prohibitively expensive to meet. DLA’s OTA program isn’t simply about acquiring technology. The program focuses on transitioning solutions into daily operations and providing support to scale them. (You can learn more about launching your own OTA program here.)
DLA immediately put the new process to work, identifying two technology solutions that, when combined, could address their suspended stock issues: By using 3D scanning DLA could create authoritative records of items based on their geometry. That meant geometric search algorithms could be used to identify matches or similar objects.
Armed with these solutions and curated market research from BMNT, DLA awarded two OTA contracts to prototype automatic-scanning rigs and geometric search algorithms in less than a month. Within 15 days of signing their contracts, two companies, Direct Dimensions and Physna, created the largest known repository of 3D part files in the DOD. DLA now has an efficient way to get necessary parts to where they are needed most.
The Impact: Spare parts in days not months
The new OTA process helped DLA reduce the number of items in suspended stock and eliminated incorrect or duplicate National Stock Numbers. More importantly, the existence of a new process enabled a rapid, on-demand manufacturing capability that dramatically increased DLA’s supplier base by thousands of U.S. manufacturers while lowering the management requirement.
Now, parts that used to take more than three months to find can be sourced in less than two weeks.
