Shuffling Supplies

FEMA turns to the private sector to make sure disaster areas get ample provisions-and fast.

The state of Texas has decided that it cannot count on the Federal Emergency Management Agency for help in a disaster. So the state's emergency management division has made arrangements with big-box retailers such as Wal-Mart and Home Depot to provide water, ice and other critical supplies to its citizens in a crisis. After what happened with hurricanes Katrina and Rita, the assumption now is that FEMA will provide nothing.

If they can get supplies that way, a FEMA spokesman approvingly told the Houston Chronicle, "that's just one last thing we don't have to coordinate for." This response may sound flippant, but it actually illustrates the overhaul of FEMA's realigned logistics program, which is beginning to take shape.

The most salient change is an increased reliance on the private sector-the outsourcing of much of the agency's logistics to a contractor or contractors that will be in charge of acquiring, storing and moving emergency supplies. This arrangement, known as third-party logistics, is common in many industries and should make FEMA's supply lines shorter and quicker, says Marco Bourne, FEMA's director of policy and program analysis. Companies that specialize in third-party logistics are very good at what they do. Also, while FEMA might want to store its own computers and other sensitive materials, basics such as tarps and generators are so widely available that the agency does not necessarily need to own them. "It's not always the wisest course of action for FEMA to be storing those [materials] in FEMA facilities, then move them over FEMA trucks . . . when there is the possibility and quite high likelihood that the private sector already has the commodity or supplies available closer," Bourne says.

The new third-party system will be the primary focus of FEMA's logistics operation in fiscal 2008, according to Bourne. The agency will develop an acquisition plan over the next few months and eventually release a contract solicitation for a logistics provider, or possibly more than one.

Auditors criticized FEMA's Logistics Information Management System prior to and during Hurricane Katrina, which exposed large-scale problems in the agency's ability to deliver supplies fast enough to the areas that needed them.

In particular, auditors pointed out that the system could not share information with state and local agencies and could not indicate when items would ship or arrive.

FEMA replaced that system with one called Total Asset Visibility, which uses Global Positioning Systems to help with tracking. Bourne says using GPS units in the immediate aftermath of Hurricane Katrina was the first step toward a different way of looking at logistics. He says that over the last eight months the agency has been gathering information on private sector best practices in supply chain management.

All FEMA trucks and packages now have GPS units on them, and Bourne says FEMA will go beyond that with other new technology to give officials-whether in a Washington office or in the field-an accurate picture of where items are, down to the pallet or product level.

"I want to know where every single generator pack is in this given region and what's their time of delivery," Bourne says, describing the thought process of a hypothetical FEMA official during a disaster. "That information has to be seamless, it has to be visible, accessible in real time and provide us a picture of what's moving and when."

The agency also has remodeled the logistics division as the separate Logistics Management Directorate; previously, the operation was a part of the larger Emergency Management and Response Directorate. What began with about two dozen staffers will have roughly double that number by the end of fiscal 2008.

"In the broadest and most humble of terms, it's the civilian logistics piece for emergencies, like the Defense Logistics Agency is for the military," Bourne says. "Obviously, they don't have the same capabilities. But somebody has to be that nucleus."

That analogy is not accidental. In April, FEMA hired William "Eric" Smith, the senior executive assistant to the director of the Defense Logistics Agency, to head its new directorate. Bourne says Smith has been reengineering the FEMA logistics operation.

And FEMA has formed a partnership with DLA for the procurement, movement and delivery of staples such as water or ready-to-eat meals, for which FEMA previously did all the contracting and shipping itself. "It doesn't make sense for FEMA to store commodities when DLA does it and in quantities far greater than what we'd ever need," Bourne says. "They do in a month what FEMA might do in a couple of years."

The same could be said for large retailers. Bourne says FEMA always has encouraged state and local governments and emergency responders to work out agreements with the private sector, as Texas has done. But he admits that Hurricane Katrina-during which Wal-Mart, Home Depot and other companies contributed supplies-highlighted that need.

"It's just a point of fact that those resources that are closer are the ones that need to be tapped first," Bourne says. "More of that relationship has to be built."