Document created: 18 August 03
Air University Review, January-February 1975

Logistics, Procurement, and Manpower?

One of the more important goals of logistics is the integration of the functional areas such as maintenance, supply, and procurement.

Integration is the process of uncovering the relationships between functions studying them, and developing procedures that allow the functions to work in unison toward a common mission. This article deals with the relationship between procurement and manpower.

The need for a relationship between the procurement of a weapon system of a particular design and the manpower to operate and maintain that system is rather obvious. However, the relationship between base-level procurement and manpower is less obvious. A base-level procurement function and the function of a major air command (MAJCOM) management engineering team on operating location at the same base are seemingly unrelated. An outline of the specific responsibilities of each function does not show how the two are related. However, the presentation of three hypothetical case studies will show that there is an important relationship between the two functions.

The cases demonstrate that a purchasing officer could unknowingly enter into an uneconomical supply, service, or construction contract. It is my opinion that the procurement officer simply does not always have the information he needs to determine whether a contract is economical and that the management engineering team on his base could provide the information he requires. On the other hand, the manpower officer may not have all the information he needs to do his job efficiently; often the purchasing officer can provide that information. The purpose of this article is to show that there is a need for a formal definition of the relationship between these functions. A proper analysis of the three cases presented, which demonstrate my viewpoint, requires an understanding of the functions.

The two functions are the base-level procurement office and the MAJCOM management engineering team. The following descriptions of them are not all-inclusive; rather they outline those responsibilities pertinent to the cases presented.

Base-level procurement, officially the local purchase program, has three objectives; (1) to give bases self-sufficiency, the commander the capability to use local instead of central procurement, and the procurement personnel an effective way to build good will; (2) to assure the use of the most advantageous procurement method; (3) to assure that personnel are continuously trained to improve program effectiveness.¹

The local purchase program is the responsibility of the installation commander. He determines the organizational level of the procurement function, programs for items of supplies or services authorized for local purchase, and authorizes initiation of purchase requests.

The base procurement officer is the subordinate of the installation commander; however, he is responsible for all local purchase actions as an agent of the U.S. government rather than the Air Force.

There are few directives that apply solely to guide the base-level procurement officer in the conduct of his affairs. Public laws, armed services procurement regulations, and Air Force procurement instructions provide the guidelines for all procurement. The base procurement officer uses those parts of the overall directives that apply to his activities.

Early in 1958 the Air Force recognized that it needed a new system for the allocation of the manpower resource. In 1960 Headquarters USAF directed that the USAF Management Engineering Program be implemented for the primary purpose of developing and maintaining valid work center manpower standards.² In 1962 President Kennedy directed that action be taken to increase the productivity of all federal employees through methods improvement, more efficient layouts, and time-saving equipment.³

To support these two directives, the Air Force implemented project ECONOMAN, which means "effective control of manpower." ECONOMAN centralized manpower controls at the major air commands. However, MAJCOM's established management engineering teams (MET’S) at base level in order to develop manning standards at the working level.

Basically, establishment of a manning standard requires (1) listing the specific tasks that a work center is required to perform; (2) recording conditions, facilities, and equipment; (3) measuring the man-hours expended, using approved industrial engineering techniques; and (4) establishing the relationship between man-hours and workload so that manning can be adjusted for varying workload needs.⁴

In 1965 the MET'S were also given the responsibility of the traditional manpower functions, formerly assigned to the base-level personnel function. These responsibilities included (1) maintaining manning authorization documents, (2) reviewing civilian positions for essentiality, and (3) performing triennial reviews of certain base functions. These triennial reviews constitute a complete cost estimate of a function, including the cost of men, equipment, and facilities and an apportionment of the cost of support received from all other base functions.⁵ These reviews are compared with cost estimates obtained by the procurement officer from private contractors, to determine the effectiveness of in-service accomplishment of a specific function or work center.

MSGT Jones, NCOIC of the Maintenance Analysis Section of a small Consolidated. Aircraft Maintenance Squadron (CAMS), was an outstanding NCO. He and his able assistant, SSGT Smith, took pride in the Maintenance Data Analysis Report that they prepared monthly. The section was authorized only two manpower spaces, but the workload was not great and there was no backlog of work. SGT Jones had an extensive background in statistics and knew he could perform more sophisticated data analyses if he were not limited by the capacity of the nine-digit desk calculator authorized by his Table of Allowance (TA). Then he became aware of the existence of the Super 3000, a desk calculator that could almost be classed as a mini-computer because of its speed, capacity, and small memory bank. In view of its cost, about $3000, his justification to the CAMS commander and the base equipment management office (BEMO) had to be strong. It was. Not only would the Super 3000 allow a more detailed data analysis but SGT Jones showed that it could save eight man-hours per week over the calculator then in use. At $4.00 per man-hour, the Super would pay for itself in less than 20 months.

The base procurement officer, upon receipt of a. properly justified purchase request and after efficient negotiation, contracted for the Super 3000, and SGT Jones got his calculator.

A management engineering study of the CAMS had been performed earlier in the year. A work center description (WCD), listing the specific tasks required to be performed by the maintenance analysis section, was written, and the special equipment (the 9-digit calculator) was also recorded. (The WCD is similar to the "standard practice" used in private industry.⁶) Then using accepted industrial engineering techniques, the MET established that the average workload of the maintenance analysis work center was 242 man-hours per month; one man's expected work capability is 142 hours per month.⁷ Therefore, the work center needed 1.7 men to do the job (242 ÷142). A fractional manning guide used by the MET directed that this function be authorized two manpower spaces.

The procurement officer unknowingly entered into an uneconomical contract. The time saved, cited as part of the justification of the purchase request, had no meaning because there were 284 man-hours available to the work center per month (2 men x 142 hours) and a workload of only 242 hours. This means there were 42 hours of slack before the purchase; if SGT Jones's figures are correct, the new calculator will introduce 32 additional slack hours.

The mission had not changed, now new reports were required, and the specific tasks required by the work center were the same; therefore, the old calculator could have accomplished the mission. If we save man-hours and there are no other productive tasks to be performed during the "saved hours," we have saved nothing--unless we reduce manpower authorizations!

The more sophisticated techniques that were possible on the Super 3000 were "nice to have" but not required. For the past several years great emphasis has been placed on "buying only what we need" in high level defense procurement. Whether a particular expense is in the national interest is the question that must be asked. This policy should also extend down to the base level.

If the required man-hours per month had been only 172, the workload would have been too great for one man and two spaces would still have been authorized. In this situation, the purchase of the Super 3000 would have been an economical contract, for by reducing the required man-hours to 140, within the capacity of one man, it would save the cost of one manpower space or about $9400. However, the manpower officer, having no way of knowing that the new equipment was purchased, would not have reduced the authorization. The real loss under the present system would have been the cost of the new calculator plus the cost of an unneeded manpower authorization.

In 1971 Captain Coke, the base procurement officer, received a purchase request (PR) from the civil engineering squadron. It requested that a six-month service contract be let for the collection of trash in the base housing area. The justification cited on the PR was: "Insufficient manning to be accomplished in-service."

Captain Coke knew that for the past three years local firms had collected trash in the housing area, and this PR was just a renewal request. He awarded a contract to the lowest responsible bidder after formally advertising the contract.

One month later, the captain was shocked by the contents of a procurement memo. It cited the Congressional displeasure of certain uneconomical service contracts that were let based on "insufficient manning authorizations" when in fact a check of manning projections showed additional authorizations were forthcoming within a short period.

Five months later, the same PR showed up for renewal. Captain Coke immediately got a signed statement from the manpower officer certifying that no additional manning was projected for the civil engineering squadron. Then he awarded the contract.

The question, "Did an uneconomical contract result?" does not hinge on whether there were sufficient in-service manpower authorizations to do the job. The question is, "Would it have been more economical for us to perform the task with in-service personnel?" The manning authorizations can conceivably be changed to provide the men required, excluding other socioeconomic considerations.

The civil engineering squadron (CES) knows they do not have sufficient manning authorizations to do the job, and they have two alternatives: obtain additional manning or request a service contract. However, the CES does not have the experience or ability to make the decision as to which alternative is best.

The MET has experience in determining the cost of performing a job with in-service skills and equipment (triennial reviews).

The procurement officer could request an in-service cost review from the MET and also invite bids from private contractors. Only by comparing the two can he determine if the contract in question is in the best interest of the government.

The service station work center of the vehicle maintenance function is responsible for dispensing fuel and lubricants and performing minor service to all vehicles assigned to its base.

A management engineering study was performed on this function in 1971. The study found that on some bases the lubrication, minor maintenance, and gas pump facilities were not located in close proximity to one another. At Zero AFB lube racks were 600 feet from the pumps; at Sub-Zero AFB the distance was 350 feet between facilities.

The gas pumps were manned using "queuing models," which provided a balance in cost between gas attendant idleness and customer delay time. The total cost to the Air Force was optimized, but there was considerable attendant idleness built into the system. The distance between facilities required that the lubrication and maintenance functions be manned separately.

The study reported that "Inefficient layout of facilities forces us to pay for the inefficiency with manpower. During slack periods, gas pump attendants cannot perform other productive tasks because the distance between facilities is too great." It further recommended a standardized layout and stated that use of the standardized layout would allow all lubrications and fifty percent of minor maintenance to be performed by gas pump attendants during their idle periods. This would result in a savings of two manpower spaces at Zero AFB and three at SubZero AFB.

An Inspector General report in 1972 rated the service station facilities at Zero AFB as marginal: "Pump attendants have no permanent shelter, a worn-out trailer is being used. Mo-gas tank is too small. No oil or anti-freeze storage facilities." Based on the IG's report, the base's request for construction of new facilities was approved. The purchasing officer awarded an $11, 000 contract for construction of a permanent shelter, including a storage area and a larger gas tank, on the site the old facilities. No change in the location of lube racks was planned.

Similar discrepancies existed in the service station facility at Sub-Zero AFB, and a completely new service station was constructed in late 1973 at a cost of $25,000. Its layout was similar to the standardized layout proposed by the earlier MEP study.

The contract awarded at Zero AFB was dearly an uneconomical contract. It simply duplicated existing facilities and layout at a cost of $11,000. The Air Force still had to pay for inefficient layout with two men extra. The worth of two saved spaces is about $19,000; in other words, the additional cost for a completely new and more efficient facility costing about $25,000 would have paid for itself in manpower savings in the first eighteen months.

The contract at Sub-Zero AFB will pay for itself in less than two years because of the estimated three manpower spaces it will save through a more efficient layout. It was a very economical contract; however, unless the manning document for the service station is reduced, not one cent will be saved.

Who tells the reviewing authorities of the Zero AFB construction request that it would he cheaper to build a completely new facility? Who tells the Management Engineering Program that a new facility has been built at Sub-Zero AFB so that the manning authorizations can be reduced?

Case I showed that the purchase of a labor-saving device can change the man-hours required to do a job. This case is representative of the impact of a wide range of labor-saving devices; i.e., roller conveyers to replace handtrucks, automatic controls to replace manual controls or power tools, and equipment to replace manual operations. The purchasing officer can reduce manning requirements through the purchase of such a device; the manpower officer must make adjustments to the manning documents. The manpower officer, in some instances, could provide information concerning a labor-saving device which may show that a potential purchase would not be in the best interest of the government. The point is, there is a relationship between the two functions on some supply contracts.

Case II demonstrated that a service contract could be analyzed on the basis of the question: "Is it the most economical way to do the job?" This case is representative of a range of service contracts awarded for laundry services, snow removal, garbage collection, or janitorial work. Only by comparing the cost of doing the job with in-service skills and the cost of using a private contractor can we determine which is the more economical method. The manpower office has experience in determining the in-service costs; the contracting office is the only agency that can solicit bids for possible service contract awards to private firms.⁸ Clearly, there is a relationship between the two.

Case III shows that an uneconomical construction contract can be entered into by the purchasing officer if he does not have all of the information concerning the contract. Further, it demonstrates that a change in facilities can and does change the manning requirements. The objectives of the manpower function are to develop and maintain manpower standards.⁹ Manpower cannot maintain these standards if it is not made aware of changes that affect them. Any construction contract that improves facilities--and hopefully most do--will affect the man-hours required by the facility. On construction contracts, too, there is a relationship between the manpower and purchasing functions.

It is clear that there is a relationship between the functions; therefore, there should be a communication link between the two. Coordination in the best interests of the government is required.

There would be no problem if effective coordination now existed between the manpower and procurement offices. However, it is my contention that little or no coordination exists either informally or officially. A search of procurement and manpower directives revealed no formally defined relationship or required coordination. Procurement and manpower officers stated that they did not know of any directive that outlined the interaction of the two functions. Recent discussions with procurement officers indicate that procurement very seldom consults with manpower. Similarly, discussions with manpower officers confirmed the converse of this finding. There appears to be no coordination between the two functions now; if they don't coordinate, who does?

The initial reaction of most of the procurement officers interviewed, with respect to Case I, was that a properly prepared supply purchase request is the authority for purchase. However, after the potential uneconomical implications were explained, opinion changed to: "The supply officer should have caught it." Supply officers confronted with the case stated that major air command must approve equipment changes; therefore, they should have caught the error. Supply officers agree, however, that many purchase requests do not necessarily go to MAJCOM for approval, and there is the possibility that even MAJCOM could err.

Some purchasing officers believe that on service contract requests, too, the user should determine the need; procurement acts upon validated purchase requests. However, the user does not always have the ability, experience, and authority required to determine whether a service contract is in the best interest of the government.

It was the opinion of the majority of the procurement and supply officers I spoke with that coordination on construction contracts could be obtained by making the MET chief a member of the base Facilities Utilization Board. There are numerous ways that coordination can be effected between users, suppliers, contractors, and industrial engineers on supply, service, and construction contracts. Why is the required coordination not clearly defined? How has private industry handled this problem?

Firms in private industry seem to agree that there must be coordination between engineering and purchasing. Some feel that "top management must insist on a clear definition of engineering and purchasing responsibility,"¹⁰ but others favor an informal relationship.

One can find dozens of articles in the journals on the relationship between engineering and purchasing. However, all these articles concern the relationship between the technical engineer and procurement. No one seems to mention the industrial engineer or manpower relationships. For example, the statement: The purchasing system consists of quality control, sales, engineering, planning…."¹¹contains no mention of manpower. Why? Because in private industry the relationship between the purchase of equipment and labor requirements is basic; it is understood rather than formally defined. Industrial engineering (IE) departments routinely review all labor-saving devices and adjust work standards immediately; time is money, and the time standards are continually updated as equipment and methods are changed. Facilities layout changes, too, are designed by or in coordination with the plant IE, who has firsthand knowledge of every change, he being intimately familiar with every part of his plant and equipment.

Private industry maintains a tight control on time-saving devices and layouts because time saved is often dollars saved. The Air Force must become just as dollar conscious. However, industry may not have the problems in coordination that are found in the larger, more complex Air Force. The Air Force needs a formal definition of this important relationship.

The base-level purchasing officer does not have the information he needs to determine whether some contracts are economical. Similarly, the manpower officer does not have all the information he needs to do his job efficiently. Coordination is required!

A directive should be published that directs and defines coordination, between the base procurement function and the MAJCOM-MET operating on the same base, on all supply, service, and construction contracts that may have an impact on manpower requirements.

The essence of logistics is integration of the existing separate functions. Integration is the process of uncovering relationships between functions and developing procedures that allow them to work in unison toward their common mission. This article addresses only one relationship; there are many more that need attention. This task cannot be left to the system design teams and staff personnel: they are not miracle workers; they cannot uncover every relationship. It is the operating Air Force managers, the men who live with the problems, who can uncover ways to make the system work better. If they do, eventually we may achieve an integrated logistics system.

1. Air Force Regulation 70-18, Local Purchase Program, 2 May 1968. p. 1.

2. Management Engineering Briefings, DPLM 3 Operating Instruction 25-7, Hq Strategic Air Command, Offutt AEB, Nebraska, 27 December 1965, p. 22.

3. Ibid.

4. Air Force Manual 25-5, USAF Management Engineering Program, p.1.

5. Air Force Regulation 26-12, Control Services, 9 February 1966, p. 9.

6. Marvin E. Mundel, Motion and Time Study (Englewood Cliffs, NJ.: Prentice-Hall, Inc., 1970), p 316.

7. Air Force Manual 26-3, Criteria and Standards, 12 October 1965, p. 3.

8. AFR 70-18, p. 2.

9. AFM 25-5, p. 1.

10. "When Purchasing Takes Over Production Planning," Purchasing, Vol.61, December 1966, pp. 45-50, 112.

11. Wilbur B. England,"The Purchasing System (Homewood, Illinois: Richard D. Irwin, Inc., 1967), p.122.