By Rebecca MontgomerySeptember 27, 2007
ROCK ISLAND, Ill. - The Army Working Capital Fund Directorate at the TACOM Life Cycle Management Command Rock Island announced that it has surpassed $1 billion in sales for the first time.
According to Tom Huot, group leader of the AWCF hardware team, the war in Iraq and the recent surge have pushed sales of items over the $1 billion mark. In peacetime average yearly sales would be $400 to $500 million, he said.
"It takes a great effort in buying the right parts to have on hand. When the soldiers requisition them we've got them to sell," said Huot.
The AWCF team at Rock Island provides obligation authority to its directorates to procure repair and replacement parts for items such as fire control for the M1 tank and Bradley Fighting Vehicle, howitzers, tool sets, kits and outfits, training equipment and small arms replacement parts like barrels, magazine cartridges and hand guards, Mr. Huot said.
The $1 billion amount is significant because of the large number of parts sold to reach that milestone.
"The commodities we sell are not expensive, for example a $9.80 magazine cartridge, sold at TACOM Rock Island, versus an M1 tank engine at $500,000 each, which TACOM at Warren, Mich., sells. The majority of our parts are $10,000 or less. You have to sell a lot of parts to make $1 billion," said Mr. Huot.
The AWCF is a revolving fund based on the sales generated throughout the year in order to buy parts, Mr. Huot said.
It's similar to a regular business in that you have to have sales in order to generate enough obligation authority to buy parts, he said.
"Wal-Mart and Target have to bring in revenue in order to spend it, and so does the AWCF fund," he said.
Mr. Huot said that his team of seven supply systems analysts provides input to the annual President's Budget Estimate Submission for the hardware and logistics operations budgets at TACOM.
"In fiscal years 05 and 06 we sold $980 million and $965 million respectively worth of spare parts, so we were getting close to the $1 billion mark. I said to myself, in fiscal year 07 we might just get there," said Mr. Huot.