Strategic supplier alliances with industry partners strive
to mirror commercial best practices and achieve a basic transformation in the
way competition for business occurs and value to customers is increased. A
strategic supplier alliance model migrates the Department from a
transaction-based contract approach to a commercial portfolio management model
priced according to demand. Such alliances have been forged between the
Defense Logistics Agency (DLA) and Honeywell Incorporated (catalog prices);
DLA-Honeywell-Boeing (parts management); DLA-Hamilton Sundstrand; and
DoD-Samoff Corporation (research and development). The DoD Change Management
Center (http://www.acq.osd.mil/ar/cbe) has more
details on strategic supplier alliances.
Strategic supplier alliances strive to create long-term,
mutually beneficial partnerships. The following factors support the decision
to enter into a long-term strategic alliance agreement:
- A good business case (other than administrative
convenience) for the longer duration exists and is documented in the
Justification and Approval or elsewhere in the contract file.
- Only sole source items that are unlikely to become
competitive are on the contract, and a process for checking items
periodically to ensure they have not become competitive is in place. The
competition review should not be tied to an option exercise (for options
longer than one year).
- A method for removing items from the contract if/when
they become competitive (e.g., add/delete clause, termination for
convenience clause) exists.