Accession Number : ADA310554

Title :   Business Case for Noncompetitive Automated Purchases.

Descriptive Note : Final rept.,

Corporate Author : DEFENSE LOGISTICS AGENCY RICHMOND VA OPERATIONS RESEARCH OFFICE

Personal Author(s) : Arebalo, Cathy J.

PDF Url : ADA310554

Report Date : JUN 1996

Pagination or Media Count : 41

Abstract : The Defense Logistics Agency has an automated system for making small buys (under $2,500) on a noncompetitive basis called the Standard Automated Material Management System (SAMMS) Purchase by Electronic Data Exchange (SPEDE). In FY 94, the hardware centers awarded 136,000 contracts totaling seventy six million dollars for these small purchases through SPEDE. The system is popular, in part because it requires very little time and attention from buyers, thus yielding a low cost to procure and a significantly lower administrative lead time (ALT). Nevertheless, despite the buying efficiencies and planned system improvements, many people believe that the Government pays, and will continue to pay, excessive prices in its noncompetitive automated buys. The Defense Logistics Agency Operations Research Office was tasked by the DLA Procurement Directorate (AQP) to prepare a business case analysis that evaluates the costs and benefits of the SPEDE system with other planned noncompetitive and competitive systems for making small purchases. The main systems compared for each of the hardware centers are: (1) the current noncompetitive automated version of SPEDE (the status quo), (2) a semi-competitive version of SPEDE used at the Defense Industrial Supply Center, (3) a fully competitive version of SPEDE used at the Defense Personnel Supply Center for procurement of medical supplies (Medical SPEDE), (4) the DLA Pre-Award Contracting System by Electronic Commerce (DPACS-EC), which is a manual competitive system, and (5) a semi-automated competitive method of using DPACS-EC with SAMMS Automated Small Purchase Phase II solicitations. The costs compared for each alternative are the vendor price and the cost to procure. The benefits compared are ALT, production lead time, inventory turnover rate, backorder rate and supply availability.

Descriptors :   *AUTOMATION, *MILITARY PROCUREMENT, ELECTRONICS, COMMERCE, DEFENSE SYSTEMS, MANAGEMENT, PRODUCTION, INFORMATION EXCHANGE, COST EFFECTIVENESS, LOW COSTS, COSTS, AVAILABILITY, SUPPLY DEPOTS, VENDORS, SUPPLIES, LEAD TIME, MEDICAL SUPPLIES.

Subject Categories : Logistics, Military Facilities and Supplies

Distribution Statement : APPROVED FOR PUBLIC RELEASE