Reducing Costs of Contract Services at Joint Munitions Command

ROCK ISLAND ARSENAL, Ill.--Cindy Medinger, Process Improvement Specialist at Joint Munitions Command, recently completed a Lean Six Sigma Black Belt project designed to reduce the total costs of contract services at JMC headquarters.

"The members of my group and I felt this was one area where we needed to make better and smarter decisions, especially in this era of current and expected future budget cuts," said Medinger.

JMC, like other government agencies, periodically hires contracted employees to complete projects when its own employees do not possess the specific skill sets required. In the past, contracted employees have been hired for such projects as the implementation of the Logistics Modernization Program, the Army's most comprehensive business transformation and technological modernization effort ever. Also, JMC has hired contracted employees for information technology services.

In order to ask hard-hitting questions on the proposed need for hiring contracted employees, Medinger and her group formulated a service contract justification worksheet. This worksheet will help management make better-informed decisions and ensure that requests for contract services are truly needed and justifiable. The worksheet will be submitted along with the contract service approval package for approval or denial.

Some of the questions on the worksheet include: Explain why this task/function must be performed. What is the impact to the warfighter and readiness if we do not do this? Why is it critical to contract this out? If this is contracted out, what is your plan to train and transition function/tasks back to government personnel?

"This was a great project for JMC, because, as with most government organizations, some of our largest costs are contracted services. So, as budget cuts are pending from Congress and the taxpayers, we need to take every opportunity to examine costs and reduce them appropriately. This project and the new approval justification process will put significant scrutiny on our service contracts and will help us make smart decisions on what we are going to contract," said Col. Arnold Montgomery, JMC chief of staff.

From March 2011 to March 2012, results showed the number of contractors at JMC was reduced by 34 percent. Other operational benefits include better understanding of requirements and shorter approval or denial times due to clearer justification provided on the worksheet.

"This project couldn't have finished up at a better time," said Medinger. "These implemented solutions will assist JMC in meeting the Department of the Army directed cost-reduction goals of greater than 10 percent for contracted services."

From its headquarters at the Rock Island Arsenal, JMC operates a nationwide network of conventional ammunition manufacturing plants and storage depots, and provides on-site ammunition experts to U.S. combat units wherever they are stationed or deployed. JMC's customers are U.S. forces of all military services, other U.S. government agencies, and allied nations.