By Emelie Rutherford
The Navy is crafting a program for labeling contractors as “preferred suppliers” as part of its push to lower costs during the sustainment of weapon systems, a senior official said.
Under Secretary of the Navy Robert Work said the sea service is looking to reduce total ownership costs of systems by scrutinizing the entire acquisition chain, including sustainment items such as spare parts.
“We want to get as much competition in the second and third tier subcontractors that we can, although at these minimum kind of sustaining breaks, it’s very, very difficult,” Work said. “But one of the things that we’re toying with is trying to give credit to builders and call them a preferred supplier, give them that type of designation.”
Having such designated “preferred suppliers,” he said, would help address supply-chain cost savings.
Work, though, speaking at an American Society of Naval Engineers conference in Arlington, Va., shared little information on the new preferred-supplier initiative. Navy Secretary Ray Mabus will unveil details next month, he said.
“I don’t want to get too far ahead; we’re still crafting all of the different aspects of that,” Work said.
The service is looking at all aspects of total ownership costs of systems; that includes questioning if ship crews have been reduced too much, making them more expensive, as well as whether more funding needs to be added back for maintenance of systems, he said.
Naval aviators and others, he said, “have a really, really (strong) kind of appreciation for total lifecycle cost and managing the forces that they have.”
“The U.S. Navy has just put together a surface lifecycle kind of management regime in which we’re trying to address it from, beginning to end,” Work said. He added more details will be forthcoming from Mabus.