The reconfiguration continued to incorporate a modeling process called the Section 14 Stockpiling Report, which DLA-SM had always used to review commodities needed by its customers. Also taken into account are commodities research and analysis reports from a wide range of U.S. and allied agencies worldwide, such as the U.S. Geological Survey (USGS), which helps identify the location, quantity, and availability of ores and mining operations, as well as CIA and State Department analyses of political stability and how that influences current and anticipated relationships with the United States.
“That [the Stockpiling Report] identifies shortages, after some extensive analysis. Right now, for example, there are about 28 materials identified as being in a shortage state,” Favors said. “After we get that list, we do more studies, to see if there are substitutes or if there is some political issue involved other than just a shortage. So a great deal of analysis goes into the decision to add [or remove] something in the stockpiling program, which is critical.
“Without making a political comment, we realize things always change. So part of the analysis we do every two years considers the confidence level in a supplier, which becomes part of the modeling process as a factor in terms of material availability. Another big issue is not only may it be a foreign source, it may be a single source. So when we request funding, we may note there is a flow of material currently coming, but it may not be as stable as we would like, so more material may need to be purchased.”
DLA-SM is largely responsible for ores and metals, although there are other stockpiles, such as the Strategic Oil Reserve and stores of uranium maintained by the Department of Energy, as well as a medical stockpile run by the Department of Homeland Security. Other materials, while still considered important, move on and off the DLA list – or change the form in which they are retained – based on the Stockpiling Report and orders from the White House and Congress.
Only three of DLA-SM’s facilities, in addition to headquarters, are staffed. The remainder are mostly in remote areas, fenced off and inspected on a regular basis. Favors said that is considered sufficient – especially for the “non-precious” commodities – because of the difficulty anyone would have trying to steal tons of raw ore. In the future, however, much of what is now held as ore may be converted to a more “finished” state.
“Going forward, where now we have titanium on the list, we’ll probably change from the most basic ore forms to something that could be processed more quickly and stored in lesser amounts, such as ingots, to control costs. We also plan to upgrade our germanium to a wafer form for a portion of the inventory and we’re looking at changing beryllium, which we currently have in a billet form – like a big ingot – to a different form that could be more easily and quickly processed,” he said.
“We do have platinum and that will continue. We do not have gold; we did have silver at one time, but no longer, because studies indicated there was no need to maintain a stockpile of those metals. For a number of years, we had raw opium, which was stored at Fort Knox for medicinal purposes, but those were sold off in the mid-’90s. We’ve always had metals and ores, but we’ve also had other things, such as talc, which we’re trying to sell off.”
The next major changes Favors expects for the DLA Strategic Materials Directorate involve a significantly increased emphasis on strategic planning, including better sources and quality of information.
“Under our models going forward, moving away from downsizing and sales of excess material, we will have an increasingly critical reliance on information, with a lot of effort on market research and contact with suppliers, what is happening in mining and with our resources, and staying in contact with our customers and their needs,” he said. “We may have someone come in from ARDEC [the Army Research, Development and Engineering Center] with a short order for some material, for example. So being even more vigilant about market changes, going forward, will help us make the best decisions.
“We ran models on about 90 materials this year, so we’re always looking at what is the newest concern, using input from the services directly, along with our own marketing staff and contractors. But it’s hard to say what may be the newest addition or deletion. Right now our agency is serving as the lead on rare earths in defense applications, which we expect to have completed this year. But it’s a dynamic environment and something could come up we had not thought that much about. For example, we had never done modeling on carbon fiber, which we added this year. And as we advertise our services, I would expect more things like that to come up.”