INTERVIEW: Deidre A. Lee, Defense's buying boss

Right now, it's a little early in the process. People are still getting into place in their new jobs. Edward 'Pete' Aldridge, undersecretary of Defense for acquisition, technology and logistics, has given us some direction on where he wants to focus.We've also talked about electronic business and work force issues. So I think we're beginning to see points of emphasis and are developing the final strategy. DOD is so large. NASA is a smaller agency, so you can individually know each of the procurement executives. So, I think from that standpoint, it was easier to communicate and get people to agree to go in the same direction and work on the same issue.At OFPP, that was more difficult because everyone had such disparate interests.Here at DOD, it's another degree. We all have the same mission'to focus on the warfighter and national defense'but we're so diverse, and there are so many different roles that I think there's a challenge in trying to understand everybody's individual concerns and issues and focusing on the whole approach.From OFPP, I would say one of the things I am most pleased with is how the Procurement Executives Council came together and how those people are now active in procurement issues.And here at DOD, we have interdepartmental staff meetings every month. What I'm trying to do is get to know and get to work with each of the individuals that are working on those issues. NMCI will certainly get everybody else thinking about how to be innovative. The concept actually fits into a lot of the procurement-specific issues we're talking about. That is, 'What does my customer need, and how do I get there?'Instead of buying the parts and then buying the integration and then buying the service and then buying the upkeep, we just said, 'Wait a minute, what's the end product here that I need?'People need to communicate. How do you do that? We know we need to pass data and information in all different formats, in real time, virtually anywhere in the world. And that's what the Navy bought. So I think it's a real good example of stepping back and asking: What do we really want to accomplish, and what's the best way of getting there? My No. 1 issue is people. I'm bemused by people who say we'll solve this all with technology. We will always have and we will always need people in the process. It is a crisis and an opportunity.The first thing we need to do is treat the people we have right, which to me includes encouragement, support, opportunity'those kinds of things. That is part of retention. If we can't do that right and we bring all these recruits in, we're not going to retain them either. We can do it for buying the more common commodities. If we are truly buying commercial commodity items, low-dollar, high-volume, easy-to-purchase items, DOD offices can use electronic purchasing. I don't know yet how you buy a joint strike fighter or a nuclear submarine online.The other thing that we buy is a great number of one-of-a-kind parts. We buy spare parts for aircraft. It may be a very old aircraft, a very unique part. You don't just order them up. First you have to find out who's making them.So because we buy everything from shoes and shirts to high-tech weapons systems, we have a broad spectrum.Look at what the Defense Logistics Agency has done; they're doing a great job.They buy a lot of medical items'everything from gloves and syringes to pharmaceuticals. They did kind of an NMCI strategy and said, 'What do we really want?'The old way we bought supplies was to stock, say, gloves in the warehouse so that when somebody ordered them, we could ship them.When DLA stepped back and said, 'What do we really want,' the answer was not a warehouse or medical supply. It was the right product or service to the warfighters wherever they are, whenever they're there.So instead of buying the products and running a warehouse and then running a delivery and inventory service, which is what we previously thought we wanted, DLA said no. And they restructured their logistics systems.So the agency had to actually go out to the pharmaceutical folks and say, 'How do you know what kind of inventory to carry? How do you ship? How do you deliver? How do you order?'It was very different for us because we had to quit having contracts for warehouse management. We had to quit buying forklifts. What we were instead buying was a service. A different approach which, if I can swing that right back to the people, means that we need our people to be more business-, mission-, support- and strategy-oriented. We need to adjust our training more to what's the total business cycle, not just one office's piece. I think they are an incredibly useful tool if used appropriately, but not everything is reverse-auction material. Some people, without looking into it, think, 'Well, gosh, you just call somebody up, you post it, and then you do this reverse auction.'It's kind of our old two-step acquisition online. First you go forward and ask if these people can perform technically. And then you go online and ask what price can be had for something.I think it's a useful tool. But just like any tool, it needs to be used properly. I'm interested to see how people are going to use it on services.We said we were looking for best value, and best value is not necessarily lowest price. It's a combination of factors. I think reverse auctions work well for commodities or products. I'm a little less sure about how we expect to buy best-value services using reverse auctions.