Current State of Pricing The Defense Logistics Agency

1. Current State of PricingThe Defense Logistics Agency Catherine Benavides January 9, 2007 DoD’s ONLY Logistics Combat Support Agency . . . Supporting the Military Services & Combatant Commanders for Over 40 Years

2. The DLA Enterprise Scope of Business FY02 Sales/Services: $21.5B FY03 Sales/Services: $25B FY04 Sales/Services: $28B FY05 Sales/Services: $31.8B FY06 Sales/Services: $35.5B FY07 Projected: $34.4B 54,000 Requisitions/Day 8,200 Contracts/Day #58 Fortune 500 – Above Sprint Nextel #3 in Top 50 Distribution Warehouses 26 Distribution Depots 5.2 Million Items – eight supply chains 25M Annual Receipts and Issues 1411 Weapon Systems Supported 132.8M Barrels Fuel Sold $14.6B Annual Reutilizations/Disposals Land/Maritime: $3.2B Aviation: $3.4B Troop Support: $11.6B Energy: $13.5B Distribution: $1.5B Other: $1.2B ~95% of Services’ repair parts 100% of Services’ subsistence,fuels, medical, clothing & textile, construction & barrier materiel People 20,805 Civilians 519 Active Duty Military 754 Reserve Military Located in 48 States/28 Countries Foreign Military Sales Sales: $1.02B Shipments: 520K Supporting 126 Nations

3. = Separate Pricing Office Senior Enlisted Advisor CSM David Roman United States Army Director Lieutenant General Robert T. Dail United States Army Vice Director Major General Loren Reno United States Air Force DES Enterprise Support J-1 Human Resources J-7 Acquisition Management J-5 EnterpriseTransformation J-6 Information Ops J-8 Financial Ops J-9 Reserve Forces Defense Supply Center Richmond Defense Supply Center Philadelphia J-3/4 Logistics Ops& Readiness Defense Energy Support Center Defense Distribution Center Defense Reutilization & Marketing Service DLA Pacific DLA Europe DLA Central Def Logistics Info Service Defense Logistics Agency Defense Supply Center Columbus COMMANDERS & DIRECTORS CORPORATE STAFF Special Staff SERVICE ACTIVITIES Document Automation & ProductionService Defense National Stockpile

4. Organizational Structure • Cost and Pricing is accomplished within the GS1102 series • Cost/Price Analyst or Procurement Analyst • Headquarters – • Pricing & Procurement Integrity Branch GS15 Supervisor • Reports directly to Senior Procurement Executive • 4 analysts • Field Pricing Offices – DSCC, DSCR, DSCP • Each has a GS13 Supervisor with GS9 through 12 Analysts • Field Offices – • DAPS, DDC, DESC, DRMS, DLIS – Contracting Officer responsible for pricing with HQ assistance

5. Headquarters Support • Provide direction and oversight of all pricing related matters at the HQ and field activity sites • Provide Integrated Acquisition Review Board Support • Review Pre-Award Acquisition Plans, Source Selection Plans, Contract Management Plans, etc. • Procurement Management Review Program • Cost/Price Analyst on every PMR. • Follow-Up PMR Program to ensure timely closure of action items/findings • Respond to Congressional and DoD Hotline Inquiries on pricing issues • Serve as Subject Matter Expert on various acquisition initiatives, i.e. EPA Clauses, and DFARS Cases

6. Field Pricing Support • Assist Contracting Officer (CO) in evaluating reasonableness of contractor’s proposal(s) • Written reports • Should Cost Analysis/Estimates • First Time Buy Analysis • Serve on Source Selection Teams • Act as Liaison with DCAA, DCMA, Contractors, HQ, and other sources in all matters involving cost, pricing or financial data • Advise/support CO in negotiations of price and/or contract terms and conditions • Provide government negotiation position

7. Field Pricing Support • Support other pricing related analysis • Serve on Procurement Management Review teams • Respond to Congressional and DoD Hotline inquiries on pricing issues • Serve as subject matter expert over the pricing aspect of the procurement process • Provide training on pricing topics to groups or individuals as requested • Perform post award reviews and initiate corrective action as necessary

8. Sole Bid/Offer Actions over TINA threshold Federal Prison Industries (FPI) acquisitions over $200K Unilateral Price Determinations 8(a) fair market price determinations Definitization over $500K Resolution of Defective Pricing Contracts to be executed under the authority of FAR 6.302-3, Industrial Mobilization When option prices are higher than the basic award price, if non-competitive or not evaluated at time of award Any contract action that is not FFP or FFP with EPA Any contract modification with an aggregate increase/ decrease > $100K Claims Premium Pay Price increase exceeding 25% Refusal to submit cost data. Analysis of First Time Buys Provide tailored support upon the request of the CO based on time and resources EPA Clauses Major Programs Field Review Thresholds

9. HQ Review Thresholds

10. Integrated Acquisition Review Board

11. Issues/Challenges • Cost/price analysts skills are stretched thin across the volume/complexity of actions • Contract Specialist Intern Program lacks dedicated track for development of cost/price analysts. • No dedicated DAU training for cost/price analysts • Shrinking pool of experienced cost/price analysts due to retirement

12. Questions