AMC works to preserve OIB capabilities through cooperative arrangements with industry and others
By Mr. Mark L. Morrison
Among the challenges faced by the Army’s organic industrial base (OIB), as it transitions from combat to sustainment, is allocating diminishing workload within the depots and arsenals of the U.S. Army Materiel Command (AMC). Capitalizing on private-sector capabilities through public-private partnerships (P3), such as work share, teaming, direct sales, facility use and leasing, is one key way to preserve the OIB’s unique capabilities while ensuring its viability as an enterprise in the near term and its long-term ability to meet surge requirements.
To support the warfighter during the past 12 years, AMC has invested in tooling, specialty equipment, training and the professional development of a deployable, skilled and award-winning OIB workforce. Among the honors AMC has received are 27 of 47 Shingo awards; Lean Six Sigma and value engineering awards; selection as a Reuters Top 100 Global Innovator; Secretary of Defense Environmental awards; and presidential rank and civilian service awards.
P3s enable our partners to take advantage of these investments, capabilities and workforce skills. Partnerships provide access to advanced technology; state-of-the-art equipment; secure AMC facilities that are ISO (International Organization for Standardization)-certified and comply with Occupational Safety and Health Administration regulations; the potential use of hard-to-obtain hazardous waste permits; and Lean Six Sigma processes. Partnerships also allow industry to leverage long-term use agreements and reduce their capital investment and overhead costs.
For the Army, P3s offer the benefits of improving operational efficiencies, lowering costs of products and services, accelerating innovation, sustaining critical skills and capabilities, and ultimately reducing our expensing rates, thus making our depots and arsenals more cost-competitive. In FY13, AMC had 205 partnerships, representing total revenue of $203 million while sustaining 1,800 jobs. (See “Conserving Capabilities,” Army AL&T magazine, January-March 2013, Page 160.)
DOD has endorsed the continued use of partnerships as a critical part of President Obama’s national security strategy. In a July 2012 report to the secretary of the Army, the Defense Business Board, tasked with providing recommendations on how to exploit the benefits of these partnerships more fully, noted: “Public-Private Collaborations leverage the resources of the private sector and other collaborating agencies and allies. As the department enters a decade of austerity, collaborations are a cost-wise process that usually results in a significant return on a relatively modest investment.”
The same report also noted departmentwide challenges that can undermine partnership efforts. Top among the challenges DOD faces is that there is no overarching P3 doctrine, no standard approach for industry-DOD partnerships. Consequently the private sector does not know how to go about partnering.
AMC’s experience echoes some of those themes, notably the lack of a standard approach to partnering. Currently, AMC organizations are as diverse in their P3 approaches as each installation’s capabilities. As Gen. Dennis L. Via, AMC commanding general (CG), has observed, “Fostering partnerships calls for a more responsive approach on AMC’s part.” The private sector is a fast-moving entity that calls for a receptive and timely government response.
A STANDARD APPROACH
To address these concerns, AMC is working on a new business development strategy that will focus on the benefits and pitfalls of partnering, to establish a standard approach to attracting partnerships and reaching agreements.
The new business development plan will lay out a standard policy, metrics, tools and training that will enable the OIB to speak with one language when it comes to attracting new business. As the plan is finalized, the focus is on standardizing efforts and applying the required levels of AMC attention and resources at all sites.
In devising this new approach, AMC examined where and how partnerships have worked especially well. The most successful arrangements have developed when the collaboration took a “triad” approach. This method includes a business development professional, legal advisor and contracting officer at the initial stages of a relationship, as follows:
- Business development, to reach out with the concept of partnering, determine scope and garner concept approval.
- Legal, to analyze the environment and bring a solid understanding of applicable law, regulation and policy, with the aim of maximizing flexibility to the business development professional and the contracting officer.
- Contracting, to determine the best interests of the government and thus ensure that the partnering effort achieves its stated goals through rock-solid agreements and supporting documents that define applicable terms and conditions such as direct labor structure and costs.
Not only is integrated coordination a must from the beginning of a partnership, but AMC needs to go even further by looking toward a larger definition of partnership. Beyond the traditional arrangements with industry and small business, partnering should involve a larger concept of “public” that includes other services, the Defense Logistics Agency and other countries as well.
In addition, the continued growth in foreign military sales (FMS) offers a promising venue for partnerships. In FY13, FMS support resulted in $190 million in revenue for the OIB.
Our industrial capabilities and capacities should make us an attractive partner. Ultimately the best, most successful partnerships are those that add value to the OIB and bring profit to the private-sector partner. We must team with industry to create win-win opportunities.
As AMC’s new business development plan advances, its rapid execution will support the preservation of unique OIB capabilities, so that the OIB can remain effective, efficient and poised to provide the timely, high-quality support that our warfighters have come to expect and demand.
For more information, contact the AMC G-3/4 Industrial Base Capabilities Division at 256-450-7087 or Ramon Campos at Ramon.Campos.email@example.com.
- MR. MARK L. MORRISON is the director of industrial base and infrastructure planning at AMC headquarters, Redstone Arsenal, AL. Morrison served for 29 years as an Army Ordnance Corps officer before retiring in 2009. Subsequently, he was selected as a highly qualified expert, and is responsible for leading AMC’s current industrial base optimization assessment. Morrison holds a B.A. in political science from Southwestern Oklahoma State University and an M.S. in national security and strategic studies from the Industrial College of the Armed Forces.