The Defense Department’s leading logistics agency is still meeting small business goals despite a shrinking defense industrial base.
For the 10th consecutive year, the Defense Logistics Agency is set to exceed its DOD-assigned target by obligating over 40% of its contracts to small businesses against a 35.1% objective. DLA also topped its 3% goal in the historically underutilized business zone category at 3.5%.
“We do a really fantastic job here at DLA with small business set-asides that allow only small companies to compete for requirements in support of the warfighters,” said Dwight Deneal, DLA’s director of small business programs.
Spare parts and other consumables that need routine replacement make up a large part of DLA’s purchases, he said. Since large businesses and original equipment manufacturers don’t consider such items profitable, the agency leans heavily on small businesses to sell such items. Connecting small businesses with DLA contracts has become a somewhat repeatable process except when customers need items with no source or technical data, Deneal said. That makes it critical for DLA to find new ways of identifying businesses capable of meeting unique or sudden requirements.
“One of the questions we’ve worked to answer in our strategic planning efforts is: How do we open the aperture to ensure we’re a partner of choice for small businesses?” Deneal said.
Part of the answer: Simplify and demystify processes. The agency has held virtual outreach sessions for years, but members of DLA’s small business team recently expanded the topics to break down challenging steps and attract more companies. In fiscal 2022, over 640 companies tuned in to learn basics like how to search for and submit quotes for potential contracts as well as how to navigate more complicated actions such as seeking approval to source specific military items. Small, disadvantaged businesses were most interested in the sessions, followed by women-owned businesses; HUBZone businesses; and service disabled, veteran-owned businesses.
The team also follows up each event with one-on-one meetings between companies and supply chain managers to help business owners know where their products and services fit, as well as what requirement may be on the horizon.
“Having an outreach program that allows for that kind of targeted dialog is part of strengthening and deepening our industry engagement with small businesses,” Deneal said.
He also conducts one-hour coaching sessions every Friday morning with new companies still learning how to plug into federal contracts and seasoned vendors seeking advice on how to position their companies to partner with DLA.
Reaching out to companies that have government contracts in areas where DLA historically spends a lot of money is another new strategy.
“These are sector-focused outreach efforts where we offer companies that are already doing work for the federal government — but not with DLA — the chance to learn more about us and how they might fit into our business model,” Deneal said.
External outreach at defense manufacturing conferences helps, too. In early October, Deneal attended the Army’s annual meeting and exposition in Washington, D.C., where he participated in a panel discussion on small business challenges.
DLA’s Small Business Innovation Program has also become a model for matching vendors with requirements. Program manager Denise Price said it gives small businesses the chance to eliminate gaps in parts for weapons systems. A Colorado company was recently awarded a contract that resolved reliability issues for a variable frequency drive used to control temperature in the communications trailer of Patriot missiles.
Contracts for over 500 national stock numbered items have been awarded through the program.
“These projects enable weapons system program managers and service program office personnel to engage directly with small business industry to innovate and enhance system performance,” Price said.
Goals for fiscal 2023 are still being determined, but Deneal is already focusing his team on overcoming the decline in DLA’s supplier base by increasing contracts with underserved business communities in addition to HubZones. The process will be twofold.
“It involves finding two or more socioeconomically underserved businesses that can do business with us and recognizing that even within our current pool of vendors there are some that fit in the underserved category but aren’t using set-asides that allow them specifically to compete,” he said.
Increasing equity for underserved small businesses and using existing programs to help them compete for requirements is a priority for the current administration.
Deneal added that small businesses have a role in supporting whole-of-government customers as well as warfighters.
“When you don’t have a plethora of industrial base companies it becomes more of a challenge to set up long-term contracts that have surge capacity built in to support both our military and whole-of-government partners at the speed of need,” he said.