The Senate Committee on Armed Services, in its 2017 National Defense Authorization Act Report, asks whether there may be efficiencies that could be created by reorganizing or consolidating the U.S. Transportation Command (TRANSCOM) and the Defense Logistics Agency (DLA). The Defense Department’s Office of Logistics and Materiel Readiness tasked IDA to evaluate this question. The review concludes that (1) the DLA-TRANSCOM structure is working, and (2) the key challenge facing DOD’s “end-toend” distribution system is achieving a seamless integration of the distribution functions of TRANSCOM, DLA, the military Services, and the Geographic Combatant Commands. More specifically, (1a) no efficiencies would be gained from reorganizing or consolidating the two organizations; (1b) there are no functions that should—on the basis of operational effectiveness or efficiency—be returned to the military Services; (1c) additional economies of scale may exist in Service storage and distribution functions; (1d) a comparison of the DLA and TRANSCOM Working Capital Funds reflects the significant differences between their businesses, and demonstrates the need for improvement in TRANSCOM pricing transparency; (2a) the Commander of TRANSCOM must continue to lead improvements in DOD distribution capabilities through enhanced collaboration among all DOD actors; and (2b) effectively harvesting data across the “end-to-end” distribution system is crucial to improving DOD distribution.
