DLA Discusses Inflation, Buying Power with Industry Partners During Forecast Meeting

Nov 16, 2022 | Partner News

Representatives from 14 industry associations attended the Defense Logistics Agency’s Demand Forecast to Industry meeting Nov. 7 at the McNamara Headquarters Complex in Fort Belvoir, Virginia. The meeting is one of several events DLA holds throughout the year to increase engagement with industry partners. Photo by Christopher Lynch.

Leaders from the Defense Logistics Agency and over a dozen industry associations discussed current fiscal year projections during the Demand Forecast to Industry meeting Nov. 7 at the McNamara Headquarters Complex.

DLA Vice Director Brad Bunn gave opening remarks and welcomed attendees back to the headquarters complex in person.

Bunn said the forecast is “cloudy with a chance of uncertainty,” but DLA and its partners have become accustomed to that in a post-pandemic world.

“We’ve all been having that shared experience of uncertainty, but we are going to give you the best information that we have,” Bunn said.

The demand for fiscal 2023 at $45 billion is in line with obligations in 2022, with concerns remaining about the impact of inflation and buying power, he said. Many of these concerns echo discussions held during DLA’s industry meeting in June.

The $6 billion increase from fiscal 2021 was caused mostly by higher costs in the energy and fuel markets, he added.

“We’ve seen the impact of inflation throughout all of our supply chains, some more than others,” Bunn said, adding that DLA is concerned about inflation’s impact on buying power for military and federal customers.

Economic conditions magnify the need for a strong, vibrant industrial base, he continued.

“There’s really nothing that we provide, deliver, or support with material or services that doesn’t have some element of partnership with industry in it,” Bunn said.

DLA Acquisition Director Mathew Beebe said since 2021, there’s been an overall 10% increase in prices across DLA caused by inflation and other market conditions, but it varies from 4% to 30% depending on the supply chain.

Pricing hasn’t changed on long-term, fixed-price contracts, where prices are reset upon contract renewal. However, some contracts being renewed are at a higher price than initially planned, he said.

Contract obligations for fiscal 2023 are estimated at $11.45 billion for hardware, $12.36 billion for energy, $19.28 billion for DLA Troop Support commodities such as food and uniforms, and $1.9 billion in services, Beebe said.

Sales have declined in recent years in hardware and items needed during the pandemic like personal protective equipment, for which demands have diminished, he added.

The agency exceeded its spending goal with small businesses for the 10th year in a row, reaching $15 billion for the fourth time in the last five years, Beebe said. DLA also spent $522 million with AbilityOne during FY22.

DLA conducts business with over 9,000 companies. Over the last year, leaders connected with those companies at over 75 industry conferences and forums, with senior leaders serving as speakers or panelists at 64 of those events.

DLA’s major subordinate commands shared upcoming outreach events with industry partners, including conferences, surveys, training, and outreach.

Representatives from 14 industry associations attended the meeting, including the Professional Services Council, National Defense Transportation Association, National Defense Industrial Association, Aerospace Industries Association, SourceAmerica, and National Industries for the Blind. The full list of associations that attended and the meeting slides are available on the DLA Demand Forecast for Industry website.

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