Original Date: 04/07/1997
Revision Date: 04/14/2003

A reduction in manufacturing activities at Rock Island Arsenal (RIA) has been accompanied by a reduction in overhead cost absorption. Other arsenal organizations have been required to create income that will compensate for this shortfall. The tenant support group within Base Operations has established a mission to aid in the apportionment of indirect costs. This program, Base Operations Relationship Management, is involved in increasing tenant population and providing quality services to match tenant needs as well as other internal cost reduction initiatives.

Over the last four years, the group has contracted with 61 new tenant organizations generating approximately $30M in income with $9M of direct charges. In addition, facilities maintenance costs have been reduced by 28.6%, and the internal operating budget was reduced by 30.2%.

In an effort to increase tenant participation, opportunities for customer involvement have been increased. Quarterly workshops are held for tenants to gain feedback on the quality of services and support provided. Individual tenant meetings are held to discuss special needs and contract issues. Consideration is given to tenant funding constraints during contracting activities. Activity Based Costing methodology has been applied to ensure that tenants pay only for services used. Stabilized pricing policies have been guaranteed to tenants through 1998.

The organization has also laid away over 400,000 square feet of facilities, excessed over 100 production equipment items, and reduced depreciation expense by $2.2M annually. The combined activities of this group have had a distinct positive effect on maintaining Arsenal operations during a period of downsizing and stricter budget control.

For more information see the Point of Contact for this survey.