WARFIGHTER ALWAYS

The Nation’s Combat Logistics Support Agency

Established 1961

DEFENSE LOGISTICS AGENCY

DLA

Industry 

Association 

Meeting

April 25, 2023

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WARFIGHTER ALWAYS

The Nation’s Combat Logistics Support Agency

Established 1961

DEFENSE LOGISTICS AGENCY

DLA

DLA FY23 Demand 

Forecast Update 

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$7.45 

$4.51 $4.98 $5.20 

$3.89 

$3.39 

$6.14 $6.27 

$7.68 

$8.46 

$8.79 $8.74 

$0.91 

$0.92 

$0.88 $0.87 

 $-

 $5.00

 $10.00

 $15.00

 $20.00

 $25.00

FY20 Obs FY21 Obs FY22 Obs FY23 Obs

Billions

Hardware Energy Troop Support Other (Services Contracts)

Cumulative DLA Obligations 

(October-March)

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DLA Orders (Obligations) to Industry

FY23 Projections for Hardware and Troop Support

Low / High Range

Orders estimated to range between -7% to +7% compared to FY22

in millions

$24,654 $24,675 $22,934

$26,402

Note: does not include DLRs

4

Current 

Prediction

$24,029
WARFIGHTER ALWAYS

The Nation’s Combat Logistics Support Agency

Established 1961

DEFENSE LOGISTICS AGENCY

DLA

DLA’s Economic 

Assessment 

Working Group

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Declines Observed in Overall DLA 

Vendor Base

6 Source: FPDS

Note: Small business based on SBA within each NAICS definition

Year (FY)

DLA vendors (k)

Count of Vendors with Obligations1 FY16–FY22, Thousands 

1. Small Business is determined by NAICS classification for each industry

9.5

11.1

8.6

3.4

17 19

9.9

3.6

12.0

3.4

2016

9.8

18

12.9

3.1

8.8

3.1

20

3.1

8.0

21

2.9

7.6

2022

13.5 13.2

11.7

10.5

Non Small Business Vendors Small Business Vendors DLA’s overall vendor base 

declined by 22% from FY16 to 

FY22

Small Business vendors 

declined by 23%, a decline of 

2.3k vendors, from FY16 to 

FY22

Non-Small vendors declined 

by 17% or 621 vendors from 

FY16 to FY22

Key takeaways

Note: Includes DLA Energy
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USG Losing Small Business 

Vendors

Source: FPDS 7

19

46

27 23

29 62

54 58 50

19

45

18

43

17

42

67

84 91

76 68 USG 63

without 

DoD

DLA 

DoD 

without 

DLA

Product Service R&D Not Specified

1. For relevant PSC codes

Note: Not to scale. Vendors that provide more than one type of contract (i.e., product, service, R&D) will show up in multiple contract categories

Small business vendor count by organization by PSC, 2016-2022, Thousands Key takeaways

20

24 24 23

13

23

14 19 17

22

12

21

47

11

20

49 45 39 42 37 34

17

9 9

10

2016

9

18

8

19

8

20

7

9

21

7

2022

10 10 9 8 8

-21.8%

-18.6%

-24.8%

-37.6%

-43.1%

-24.4%

DLA is losing small 

business vendors for 

products at a lower rate 

than USG and DoD1

• DLA’s number of 

small business who 

provide products 

declined 24.4% 

between FY16 and 

FY22

• DoD’s number of 

small business who 

provide products 

declined 43.1% in the 

same period

% change, FY16-22

Note: Includes DLA Energy
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Small Business Vendors

DLA 2016–2022

8 Source: FPDS; includes products, services, R&D

Note: Small business based on SBA definition

9,927

4,374

7,596

3,222

Small Business 

Vendors in 2016

Entering 

DLA DIB

Small Business 

Vendors in 2022

Vendors Exiting 

DLA DIB

Vendors 

Remaining in 

DLA DIB

-222

Vendors No 

Longer 

Classified 

as "Small 

Businesses"

-5,331

Average obligations have 

increased for small 

business vendors 

remaining in the DLA DIB 

by ~75% from FY16 to 

FY22

Vendors experienced 

mixed outcomes: 

• 46% of small business

vendors increased 

obligations since 2016

• 54% of small business 

decreased since 2016

Unique DLA small business vendors, Thousands Key takeaways

Net change FY16 - FY22

Avg. obligations

FY16 $329k $1.71m

FY22 $2.99m $877k

Note: 222 vendors designated as "Small Businesses" by SBA NAICS codes in FY16 no longer 

qualified as such in FY22, though they remained in DLA's vendor base

Note: Includes DLA Energy

Small business vendors on average saw increases in obligations
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SCM Materiel Cost Growth

(Cumulative Since EOY FY20)

Total SCM,

thru FY21 

Q4, 5.0%

Total SCM, 

thru FY22

Q4, 13.3%

Total SCM, 

thru FY23

Q1, 15.6%

Producer Price Index,

thru FY21 Q4, 6.7%

Producer Price Index, 

thru FY22 Q4, 16.6%

Producer Price Index, 

thru FY23 Q1, 18.9%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q4

thru FY21

Q2 Q3

thru FY22

Q2 Q3

thru FY23

C&E 

Aviation

Producer Price Index

C&T 

Land

Consumer Price Index

Medical 

Maritime

Subsistence 

Total SCM

Total SCM Cost Growth 

will likely catch up to 

Producer Price Index in

Source: DLA ACE SCM Materiel Cost Growth Report. 

PPI and CPI data excludes fuel and energy.

next 12-24 months

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Financial Impact

Source: DLA ACE SCM Materiel Cost Growth Report. 

PPI and CPI data excludes fuel and energy.

• Economy-wide Inflation has begun to slow

o Inflation is typically reported in speeds, not cumulative figures.

o Damage remains, and will continue to worsen, at a slower pace

• DLA SCM Cost Growth is 15.6% since FY20

o Roughly equivalent to five normal years of growth in 27 months

o This is 3.3% better than the Producer Price Index’s 18.9%

o DLA’s long-term contracts have protected us temporarily

o Expect SCM cost growth to outpace PPI for the next few years, 

as our costs eventually catch up to cumulative PPI

• DLA SCM Cost Growth has not yet started to slow

o May begin to slow next quarter, but will remain elevated

• Largest impact is to our Pricing and Obligations

Inflation has started to slow, but DLA Cost Growth will remain elevated

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MSC Atmospherics

• Material Availability (MA) is dropping. Main drivers include economy, labor, 

production capacity, and fiscal constraints.

• Due to demand uncertainty, suppliers are inclined to limit on hand stock. Vendors 

are also deleting items from their catalogs if pricing becomes unfavorable.

• Vendors are increasingly holding prices for short timeframes (e.g., 10 days), which 

outpaces the contracting process.

• Some contractors have indicated that they are less willing to provide proposals for 

long term contracts due to price uncertainty, whereas others are increasingly 

requesting no-cost cancellation or price increase clauses.

• Contractors have concerns with shortages on packaging materials for overseas 

shipping, which can impact delivery schedule.

• Inflation is creating industry staffing issues due to higher wages and challenges 

with recruiting and retaining talent, especially with smaller businesses.

• AbilityOne has raised some prices at higher rates than competitive pricing.

As prices rise, DLA and the Services must buy less material to remain 

within their Obligation Authority (OA)

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WARFIGHTER ALWAYS

The Nation’s Combat Logistics Support Agency

Established 1961

DEFENSE LOGISTICS AGENCY

DLA

DLA’s 3rd Biennial 

Supplier Survey 

Results

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• Overall survey score slightly down compared to 2020: 3.41 to 3.34 (-.07)

• Largest Decreases:

o Timeliness -0.11

o Timely Resolution -0.12

• External events have challenged DLA’s systems

o Inflation:

 99% stated they are experiencing impacts from inflation

 68% are experiencing Severe or Significant impact

o Supply-chain disruptions:

 88% stated they are experiencing impacts from Supply Chain Disruptions

 42% are experiencing Severe or Significant impact

• Supplier Comments

o 774 Comments Reviewed

o Issue Resolution, Responsiveness and Communication seemed to be the biggest

supplier challenges

o 15% (113) made a positive remark

BLUF

Survey Conducted 24 Oct 22 - 10 Feb 2023

2018 2020 2022

Number of Responses 2,999 2,853 2,507

Response Rate 38.4% 34.4% 38.9%

Overall Rating 3.30 3.41 3.34

Highest Rated Factor Trustworthiness Trustworthiness Trustworthiness

Lowest Rated Factor Innovation Timely Resolution Timely Resolution
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2022 

Response Overview

0.09 0.04 0.08 0.05

1 % Agree – Average percentage of respondents that chose “Agree” or “Strongly Agree”

60% 3% 49% 2% 51% 4% 43% 2%

1 3 5 

Strongly 

Agree

Strongly 

Disagree 3.34

0% 50% 100% 

% Agree 50%

Rating 1-5

Avg. Rating

Avg. % Agree

.07 2%

Average Rating Average % Agree1

Category

Overall

Factor

DLA 

Communication

Growth and 

Profit Potential

DLA-Supplier 

Relationship

DLA 

Effectiveness

3.52 3.34 3.28

Highest

Lowest

Avg. Rating Avg. % Agree

3.89: Trustworthiness

2.99: Timely Resolution

75%: Trustworthiness

27%: Innovation 1%

0.04 2%

0.12

3.29
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3.68

Growth 

Opportunity

Timely Resolution

Effective Resolution

Valued Supplier

Post Award Effectiveness

Pre-Award Effectiveness

Innovation

Supplier Knowledge

Industry Knowledge

Ease of Bidding

Profit 

Opportunity

Equitable Resolution

Adequate

Timely

Trustworthy Accessibility

2.99

3.34

3.37

3.51

3.89 3.17

3.44

3.26

3.29

3.40

3.32

3.31

3.08

3.27 3.33

3.42

3.13

Supplier 

Experience

2,507 Respondents (2020: 2,853)

2022 DLA Average Rating

-.07

-.07

-.12

-.05

-.09 -.04

-.08

-.11

-.09

-.07

-.03

-.05

-.02

-.07

-.02

DLA-Supplier 

Relationship DLA 

Communication

DLA Effectiveness

Growth and 

Profit Potential

2020 Score: 3.41 .07

-.05

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12%

20%

21%

21%

17%

23%

30%

14%

37%

24%

13%

29%

16%

21%

19%

28%

7%

54%

54%

32%

32%

30%

28%

25%

30%

23%

23%

24%

28%

27%

33%

25%

22%

18%

34%

27%

47%

48%

53%

49%

45%

56%

39%

53%

64%

43%

56%

47%

56%

50%

75%

16

2022 DLA Overview by Factor

Avg. of 50% agree across factors

2%

4%

3%

1%

4%

4%

5%

4%

3%

1%

3%

2%

1%

2%

2%

2%

2%
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Key Supplier Survey Takeaways

• DLA is a trusted partner & values its suppliers

• CY22-23 was a tough business environment

o Near universal concerns with inflation, labor and supply 

chain disruptions

• DLA needs more timely communication, responsiveness and 

forecasting

o Targeted investments in the works

• DLA needs renovation in its bidding system

o Ongoing study to upgrade DIBBS - includes industry 

perspectives

• Continued industry outreach & engagement

o Updated Industry Engagement Plan last year

o Updating Conference Engagement Strategy

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MSC Industry Engagement Update

Upcoming DLA Industry Engagement Events

• DLA JETS Industry Day

o DLA HQ April 26, 2023

• DLA Supply Chain Alliance Conference & Exhibition

o Richmond VA May 3-4, 2023

• DLA Energy Supplier Summit

o Alexandria VA May 24-25, 2023

• DLA Distribution Industry Day

o Virtual June 14, 2023

• DLA R&D Collider Day

o Virtual September 2023

• DLA Small Business Webinars

o Ongoing

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What Now?

19

• DLA Strategic Plan

– https://www.dla.mil/Info/strategicplan/

• Learn how to business with DLA

– https://www.dla.mil/SmallBusiness/

• Learn about DLA’s Industry Engagement Program

– https://www.dla.mil/HQ/Acquisition/Business/Enterprise-Industry/

• Opportunities will be posted at

– https://www.dla.mil/Info/strategicplan/IndustryEngagementPlan/DemandForecast
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