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As part of the USA’s BRAC 2005 process, recommendations were handed down to the US Defense Logistics Agency to privatize a series of product commodities, and eliminate the government’s wholesale stock in key areas. The DLA manages logistics on behalf of all US military branches, and federal civilian agencies as well. These Commodity Management Privatization (CMP) activities would have to take place within a framework of public-private partnership, with goals that included improved delivery, improved management, and lower cost of ownership. It is just one component of the DLA’s Transformation Roadmap.

Small business qualifier Haas TCM of West Chester, PA now has two major wins under this process. One is a $2 billion privatization contract. The other is a major subcontracting role in a $6.2 billion privatization contract….

According to the DLA, their top supply and storage foci stemming from BRAC 2005 are as follows:

• Depot level reparable (DLR) Procurement Management Consolidation (including consumable item transfer (CIT)
• Commodity Management Privatization
• Supply, Storage and Distribution management Reconfiguration

On April 30, 2007, DefenseLINK announced that Haas TCM had won a fixed-price with economic price adjustment contract covering privatization of compressed gas and cylinder supply and logistics, on behalf of the US Army, Navy, Air Force, Marine Corps, and Federal civilian agencies. Under this contract, The DLA will no longer have to buy and store compressed gases or empty cylinders for its customers; instead Hass TCM will will buy, store, fill, distribute, and transport all of these items – with the exception of ozone depleting substances, which will remain a government responsibility.

The 100% small business set aside had to be awarded to a business with under 500 employees, and includes a 5-year base period and one 5-year option periods. If the option period is exercised and the contract runs until April 29, 2019, it could be worth up to $2 billion. Contract funds will expire at the end of the current fiscal year. The Defense Supply Center Richmond in Richmond, VA issued the contract (SPM4AR-07-D-0100).

All requisitions for compressed gases and cylinders are currently being handled by an integrated supply team within DSCR’s Aviation Suppler Operations Directorate. Charles Bates, BRAC program analyst in the DSCR BRAC Office, said:

“As a result of the 2005 BRAC decision, DLA is transforming the way it orders, receives and distributes chemicals, packaged petroleum, oils and lubricants, and compressed gases and cylinders. The privatization of these commodities will place the responsibility on Haas TCM for the 5 or 10 years. The contractor will be expected to deliver equal or better service to war fighters under the requirements of the contract.”

During the next 90 days there will be a transition period for DSCR and Haas TCM. There is a contract support transition plan in which DSCR will meet and work closely with Haas TCM over the next two years.

Army Lt. Col. Johnny Broughton, program manager in DSCR’s Strategic Material Sourcing Group, adds that DLA has left the current requisition process intact. Furthermore:

“Because of the number of customers, the number of (national stock numbers), and a limited supply on some of these commodities, there will be no changes with the way we deliver to OCONUS.”

In addition to the compressed gasses and cyclinders win, Haas TCM is also the major subcontractor for SAIC’s $6.2 billion DLA privatization win in the area of chemicals and packaged petroleum, oils and lubricants.

See full DLA Defense Supply Center Richmond release [MS Word format].