LMI 2008 Annual Report

TECHNOLOGY • INTELLIGENCE PROGRAMS • LOGISTICS • ORGANIZATIONS AND HUMAN CAPITAL • ECOLOGY • GREENBUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • DEPOT • HUMAN CAPITAL MANAGEMENT • OPERATIONSPREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • OPERATIONSINFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDSIMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OFOPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS • ORGANIZATIONAL ANALYSIS • COMPETENCY MODELINGLEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITIONENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITALMANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOTMAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTHRECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENTCONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSISCOMPETENCY MODELING • STAFFING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PREPOSITIONED ASSETSECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERINGLOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOTMAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTHRECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENTCONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSISCOMPETENCY MODELING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENTECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERINGLOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATIONMODERNIZATION • DEPOT MAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATIONASSURANCE • ELECTRONIC HEALTH RECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGYCHANGE MANAGEMENT • CONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS ANDORGANIZATIONAL ANALYSIS • COMPETENCY MODELING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHINGPERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESSPROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • PREPOSITIONED ASSETSSUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCEPROGRAMS • INFORMATION ASSURANCE • ELECTRON• HEALTH RECORDS • IMPROVED VETERANʼS HEALTH CAREINCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OF OPERATIONS • STAFFING • PUBLICMANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS • COMPETENCY MODELING • LEADERSHIP DEVELOPMENTEXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGSISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONSPREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • INFORMATIONSYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDS • IMPROVEDVETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OF OPERATIONSSTAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS COMPETENCY MODELING • LEADERSHIPDEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENTGREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENTOPERATIONS • PREPOSITIONED ASSETS •SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCEINFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDS

2008 ANNUAL REPORT

IN A TIME OF CHANGEINNOVATION

Contents1 Letter from the Chairman4 Energy and Climate Change16 Client Studies31 Board of Trustees32 Officers33 Program Directors36 Financial Review

ACQUISITION • FACILITIES, ENVIRONMENT AND ASSET MANAGEMENT • FINANCIAL MANAGEMENT • INFORMATION ANDTECHNOLOGY • INTELLIGENCE PROGRAMS • LOGISTICS • ORGANIZATIONS AND HUMAN CAPITAL • ECOLOGY • GREENBUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • DEPOT • HUMAN CAPITAL MANAGEMENT • OPERATIONS •PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • OPERATIONS •INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDS •IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OFOPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS • ORGANIZATIONAL ANALYSIS • COMPETENCY MODELING •LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION •ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITALMANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOTMAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTHRECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT •CONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS •COMPETENCY MODELING • STAFFING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PREPOSITIONED ASSETS •ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING •LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOTMAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTHRECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT •CONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS •COMPETENCY MODELING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT •ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING •LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION •MODERNIZATION • DEPOT MAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATIONASSURANCE • ELECTRONIC HEALTH RECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY•CHANGE MANAGEMENT • CONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS ANDORGANIZATIONAL ANALYSIS • COMPETENCY MODELING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING •PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESSPROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS •SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCEPROGRAMS • INFORMATION ASSURANCE • ELECTRON• HEALTH RECORDS • IMPROVED VETERANʼS HEALTH CARE •INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OF OPERATIONS • STAFFING • PUBLICMANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS • COMPETENCY MODELING • LEADERSHIP DEVELOPMENT •EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS •ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS •PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • INFORMATIONSYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDS • IMPROVEDVETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OF OPERATIONS •STAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS COMPETENCY MODELING • LEADERSHIPDEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENT •GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENT •OPERATIONS • PREPOSITIONED ASSETS •SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE •

PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • OPERATIONSINFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDSIMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OFOPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS • ORGANIZATIONAL ANALYSIS • COMPETENCY MODELINGLEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITIONENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITALMANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT

Letter from the ChairmanIn 2008, LMI continued helping government leaders

and managers improve the management of their agencies.

The environment was challenging, but even in the face of

the complex and ongoing military efforts in Iraq and

Afghanistan, global economic turmoil, federal election

campaigns, sharp fluctuations in energy prices, and concern

over global climate change, LMI found new ways to help.

As an independent, not-for-profit consulting firm, LMI’s

focus is on helping government leaders and managers make

decisions that make a difference.Through the extraordinary

depth of our experienced staff and use of state-of-the-art

tools, LMI is able to develop unique and meaningful solu-

tions to the significant challenges facing government. Our

broad capabilities enable us to support nearly every federal

agency, including the defense, homeland security, intelli-

gence, and civil sectors of the government.

In 2008, LMI expanded its capabilities for serving the

community of government intelligence agencies with the

acquisition of Jasmah Consulting, a highly regarded con-

sulting firm within the mission side of the intelligence

community. Jasmah Consulting’s expertise in advanced ana-

lytical techniques and strategic consulting services comple-

ments our expertise in assisting intelligence agencies with

facilities, logistics, human capital management, and other

issues.

LMI’s work covers a broad range of issues, and many of

our findings have potentially significant impacts. One

example of such an impact is our work for the Secretary of

1LMI 2008 ANNUAL REPORT

William S. NormanChairman of the Board

INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDSIMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OFOPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS • ORGANIZATIONAL ANALYSIS • COMPETENCY MODELINGLEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITIONENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITALMANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOTMAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH

Energy that resulted in developing an alternative strategy for

the Plutonium Preparation Project.When implemented, that

strategy will save taxpayers more than $500 million over the

original plan.

LMI also helped the Department of Defense prepare the

DoD Logistics Roadmap, which serves as the Department’s logis-

tics strategic plan and provides a foundation for future logistics

capability assessments and investment analyses. Equally illustra-

tive of our strong logistics capabilities was our assistance to the

U.S. Navy in broadening the scope of expertise and intellectu-

al resources in the new Fleet Readiness Centers. In addition,

our information technology capabilities were brought to bear

on the Department of Labor’s requirements for an enterprise-

wide modernization effort involving the replacement of a 15-

year-old system with a more robust, cost-effective solution.

LMI was grateful to receive special commendations for its

service to federal agencies throughout the year, including from

the Department of the Navy, National Oceanographic and

Atmospheric Administration, and National Aeronautics and

Space Administration.

The LMI Research Institute continued to build its reputation

for innovative thinking, inventive work, and thought leadership

throughout the year. Some of these efforts are highlighted in

this annual report, where our special focus is on energy and

climate change.This report summarizes some of the key find-

ings in our recently released book, A Federal Leader’s Guide to

Climate Change; identifies critical issues facing the federal gov-

ernment in these areas; and suggests some solutions to these

daunting challenges.As part of our effort, we developed a pro-

tocol for assessing the impact that federal agencies have on

greenhouse gas emissions, and this protocol is now being

adopted as a national standard by the World Resources

2 LMI 2008 ANNUAL REPORT



Institute.We believe this work will have an enduring, benefi-

cial effect upon the government’s ability to reduce its environ-

mental footprint.

This was also a year of transition for LMI’s leadership. Early

in 2008, LMI was greatly saddened by the death of its distin-

guished President and CEO,Admiral Donald L. Pilling (USN

Ret.). Admiral Pilling’s strong commitment to excellence and

LMI’s mission will be difficult to replace, and we extend our

condolences to his friends and family. At the end of 2008,

LMI bid farewell to two outstanding members of its Board of

Trustees: General William G.T.Tuttle Jr. (USA Ret.), and

Philip A. Odeen. General Tuttle served as LMI’s President and

CEO (1993–2002), and Mr. Odeen served as Chair of LMI’s

Governance and Nominating Committee. Each brought broad

experience and clear insight to the Board during a time of

great change in the company.

Our new leaders will continue building LMI’s reputation

for innovative solutions to government management problems.

In January 2009, the Honorable Nelson M. Ford, former

Under Secretary of the Army, began serving as LMI’s eleventh

President and CEO.Also, the Honorable Kenneth J. Krieg

(former Under Secretary of Defense for Acquisition,Tech-

nology and Logistics) and LTG Robert T. Dail (USA Ret.),

former Director, Defense Logistics Agency, have been elected

to LMI’s Board of Trustees.

For 47 years, LMI has contributed to the federal govern-

ment’s effort to preserve national security, secure the blessings

of our country, and improve the welfare of its citizens.This

annual report highlights some of those activities in 2008 with

the commitment to continue meeting those challenges in the

years ahead.


THE TROUBLED ECONOMY is grabbing the headlines, but the most

complex, large-scale, and long-term problems facing the new adminis-

tration involve energy and climate change.Talk on these topics has

moved from the halls of science to the dinner table. Most acknowledge

the need to confront these problems, but deciding how and when to

do so is frequently debated, and those decisions will have far-reaching

financial, national security, and environmental consequences. Energy

and climate change issues are complex and intertwined; decisions

concerning one will surely affect the other.

LMI performs research and analysis to inform our clients and advance

the dialogue on these issues.As we search for practical solutions, we

develop and hone our skills to better help federal leaders anticipate

emerging and future energy and climate change challenges.


Energy and Climate Change

INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDSIMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OFOPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS • ORGANIZATIONAL ANALYSIS • COMPETENCY MODELINGLEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITIONENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL

Helping DoD Set a Course

In an environment of uncertainty about the

price and availability of traditional energy, DoD

faces increasing energy demand and support

requirements it must meet to achieve its broader

strategic goals, particularly the establishment of a

more mobile and agile force. However, recent

advances in energy efficiency and alternative

energy technologies offer a unique opportunity

for DoD to reconcile its strategic goals with its

energy requirements through reduced consump-

tion of fuel—especially foreign fuel.

To capitalize on this opportunity, DoD needs to

implement an energy strategy that encompasses

the development of innovative new concepts and

capabilities to reduce energy dependence while

maintaining or increasing overall warfighting

effectiveness. Recognizing that DoD must

change how it views, values, and uses energy—a

transformation that will challenge some of the

department’s most deeply held assumptions,

interests, and processes—the Office of Force

Transformation and Resources, Under Secretary

of Defense for Policy, asked LMI to help estab-

lish a DoD energy strategy.

We found four areas where DoD’s current

energy consumption practices are disconnected

from the capability requirements of its goals:

(1) strategic, shaping the future security environ-

ment; (2) operational, effecting greater mobility,


persistence, and agility for our forces; (3) fiscal,

reducing the operating costs of the current force;

and (4) environmental, addressing the carbon foot-

print and global climate change.

From our research, we concluded that DoD has

the opportunity to address the four disconnects

by transforming its approach to obtaining and

using energy. Many actions are needed to make

this transformation, but the highest-level require-

ments are straightforward: incorporate energy

considerations (energy use and logistics support

requirements) in the department’s key corporate

processes, establish a corporate governance struc-

ture with policy and resource oversight to focus

the department’s energy efforts, and apply a struc-

tured framework to address energy efficiency.

We offered options for energy actions related

to DoD’s corporate processes, and several have

been or are being executed.To coordinate

component efforts, provide strategic direction,

focus research and development initiatives, and

monitor compliance with energy-efficiency

guidelines, DoD needs an effective energy

governance structure.We recommended that

DoD establish a coordinating body with policy

and resource oversight authority. Considering

the need for collaboration among the military

services and DoD, we found that an empowered

committee would be more effective than a sin-

gle leader.

ENERGY• COST OF FUEL • TRANSPORT • PETROLEUM • GROUND SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTEETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET • FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURALGAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS • EMISSIONS • GREENSCOR • SUPPLY CHAIN OPERATIONS • ACTIONENERGY• COST OF FUEL • TRANSPORT • PETROLEUM • GROUND SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTEETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET • FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURALGAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS • EMISSIONS • GREENSCOR • SUPPLY CHAIN OPERATIONS • ACTIONENERGY• COST OF FUEL • TRANSPORT • PETROLEUM • GROUND SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTEETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET • FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURALGAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS • EMISSIONS • GREENSCOR • SUPPLY CHAIN OPERATIONS • ACTIONENERGY• COST OF FUEL • TRANSPORT • PETROLEUM • GROUND SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTEETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET • FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURAL

We found four areas where DoD’s current energy

consumption practices are disconnected from

the capability requirements

of its goals.

FIGURE 1. Average DESC Standard Price of JP-8

Source: DESC Standard Prices (current and previous years),www.desc.dla.mil.

From our survey of emerging energy technologies, we

found that DoD has a wide range of options for address-

ing energy efficiency and alternate sources of energy.

Under proper governance, DoD could begin a structured

analysis of how to apply organizational, process, and tech-

nology changes to execute a strategy to reduce energy

dependence.Although assessing the strategic, operational,

fiscal, and environmental impacts of such a change would

provide a mechanism to value potential choices, the

impacts may not provide sufficient insight to be determi-

native. To promote the changes that could have the great-

est utility in addressing the disconnects, we recommended

that DoD begin by focusing on three areas: greatest fuel

use (aviation forces), greatest logistics difficulty (forward

land forces and mobile electric power), and greatest war-

rior impact (individual warfighter burden).

For the energy transformation to be successful, DoD’s

senior leaders would need to articulate a clear vision for

the change and ensure—through their sustained commit-

ment and active participation—that it becomes engrained

in the department’s ethos. In view of the long period

required to develop and populate the force with new

concepts and capabilities, DoD should begin now to

shape the force for an uncertain energy future.

Contributing to Defense Energy Economics

The cost of energy to the federal government has been

rising rapidly in recent years, and DoD is the major

government consumer.The Defense Energy Support

Center’s (DESC’s) “standard price” for fuel, which

reflects costs in the marketplace, has increased steadily

over the past several years. Figure 1 shows that its average

price for JP-8, a jet fuel, has risen rapidly in the last

5 years.

The increased cost of fuel has affected the DoD budget.

Figure 2 shows that DESC’s energy purchase costs almost

doubled from FY03 to FY07, from $6.7 billion to $12.9 bil-

lion. (Although precise figures are not yet available, the

standard price certainly increased in FY08.)


These figures tell only a part of the story. LMI

researchers have been aware for some time that energy

economics for DoD differ from those of most other gov-

ernment agencies. Our analysis has shown that the cost

of supplying energy to forces in the field is far higher

than the purchase cost of the fuel because defense assets

deliver fuel to the front lines and protect its transport

from enemy interdiction. Further, the assets necessary to

deliver fuel to and within a theater must be maintained

in peace as well as war, so this portion of the cost of fuel

does not disappear when the nation is at peace.

Estimates of the “fully burdened cost of fuel (FBCF),”

which include these transport and protection costs, vary

by operational scenario.The estimates in Figure 3 are for

an FY07 ground scenario and include peacetime as well

as three wartime scenarios, each more intense than the

preceding (and hence requiring more protective assets).

As can be seen, although the purchase cost of fuel was

$2.30 per gallon in FY07, estimates of the fully burdened

cost in that year ranged from $5.61 per gallon in peace-

time to as much as $19.00 per gallon in a high-intensity

conflict.

Recognition that the true cost of fuel to DoD is much

higher than the purchase price has dramatic implications

for weapon systems acquisition choices and operational

practices. Even small efficiencies in energy use can great-

ly influence operational effectiveness because they reduce

the need for fuel transport through dangerous terrain and

the use of helicopters and ground vehicles for protective

purposes.

LMI has been intimately involved in the development

of the FBCF concept and its application to specific

defense problems.We participated in a 2008 Defense

Science Board study on DoD energy strategy, More

Fight—Less Fuel, which emphasized the potential for

DoD to achieve large gains from fuel efficiency. In that

study, we contributed an entire chapter on energy-effi-

cient weapons platform technologies.We also participat-

ed in DoD efforts to institutionalize the FBCF concept

FIGURE 2. Annual DESC Energy Purchases

FIGURE 3. Estimated Fully BurdenedCost of Fuel

High-IntensityConflict

Medium-IntensityConflict

Low-IntensityConflict

PeacetimePurchaseCost

Source: DESC Fact Book (various issues), www.desc.dla.mil.

Source: “Fully Burdened Cost of Fuel—Ground Systems,”Summary Notes on IDA Modeling, January 5, 2007.

$Billion

$per

gallon


in its weapon systems acquisition process.That

process will take many years to complete.

In addition, we have applied many of these

concepts in studies for DoD agencies. For exam-

ple, we used FBCF in an analysis of the cost-

effectiveness of a centralized power supply to

tactical operating centers, finding that the extra

investment needed for such central power was

more than justified by the returns in fuel savings

after considering the burdened cost of fuel.

We also employed estimates of FBCF in a cost-

effectiveness analysis for the Defense Advanced

Research Projects Agency.That analysis, which

involved technologies for transforming military

waste into fuel on the battlefield, showed that

such transformation would be cost-effective in

battlefield situations with a high FBCF.

Helping Reduce Federal Petroleum Use

As the nation’s dependence on foreign petrole-

um—much from unstable parts of the world—

grows, the federal government is focusing on

opportunities to open, integrate, and diversify

energy markets to ensure energy security. One

key component of this strategy is promoting the

use of alternative fuels, such as ethanol and

biodiesel, as substitutes for conventional

petroleum-based fuels. LMI is in the thick of this

effort, working with DoD and the Department

of Energy (DOE) to formulate and execute

strategies to reduce federal use of petroleum and

increase use of alternative fuels.

DOE Petroleum Reduction Strategies

Working with the National Renewable Energy

Laboratory (NREL) and DOE, we are helping

federal agencies navigate through the complex,

piecemeal, and often contradictory legislation

promoting petroleum reduction and alternative

fuel use in federal fleets. None of the four key

federal fleet regulations—Energy Policy Acts of

1992 and 2005, Executive Order 13423, or

Energy Independence and Security Act of

2007—mandates a comprehensive petroleum

reduction strategy. Instead, each addresses only

one or two components of a fleet’s approach:

acquisition of alternative fuel vehicles, petroleum

reduction targets, alternative fuel use goals, and

alternative fuels infrastructure development.

As a result, federal fleets are failing to meet

petroleum reduction mandates.Although the

Energy Policy Acts created an inventory of more

than 137,000 alternative fuel vehicles in FY08

(23 percent of the federal fleet), alternative fuel

constitutes only 3.1 percent of total fuel use.At

the heart of the problem is the low use of

ethanol (E85) in E85 flex-fuel vehicles: more

than 90 percent of the fuel used in these vehicles

was gasoline.The clear culprit is the lack of E85

fueling stations, commercial and on federal facili-

ties. However, our analysis revealed that another

component of the problem was the fleet’s limited

use of nearby E85 stations.

In recognizing these difficulties, DOE and

NREL asked LMI to formulate a comprehensive

fleet petroleum reduction strategy for DOE,

implementing the Secretary’s Transformational

Energy Action Management initiative to establish

DOE as a leader in exceeding the goals of all

applicable fleet requirements. Our strategy con-

sisted of four core elements, which we evaluated

and implemented at each fleet location:

� Alternative fuel vehicle acquisition and alternative

fuel use. Install or convert to a new alterna-

tive fuel infrastructure at high-use sites,

replace light-duty gasoline vehicles with

alternative fuel vehicles, and increase alterna-

tive fuel use.


� Use of biodiesel blends. Install or convert to a new B20

(20 percent biodiesel) infrastructure at high-use sites,

replace medium- and heavy-duty gasoline vehicles

with diesel vehicles, and increase B20 use in diesel

vehicles.

� Acquisition of high-efficiency, advanced technology vehicles.

Acquire hybrid electric vehicles at sites where no

E85 infrastructure is present or planned.

� Fleet efficiency improvements. Reduce fuel use by

implementing fleet efficiencies, such as reducing

vehicle miles traveled, increasing fleet fuel economy,

teleconferencing, ride-sharing, and acquiring neigh-

borhood electric vehicles.

Considering data from the 20 largest DOE facilities, we

found that implementation of this strategy would reduce

DOE’s petroleum use by 39 percent and increase alterna-

tive fuel use by more than 250 percent from FY07 levels.

We have already visited some of these sites and drafted

site-specific executable plans.Those visits and plans have

helped uncover many additional opportunities for reduc-

ing petroleum use. For example, after visiting DOE’s

largest fleet location—Idaho National Laboratory—we

discovered the potential to displace almost 450,000 gaso-

line gallon equivalents of diesel use per year by accelerat-

ing replacement of older diesel buses with those that run

on compressed natural gas.We project that implementa-

tion of our recommendations at just this one national

laboratory would reduce DOE’s overall petroleum use by

11 percent.

DoD Congressional Biofuels Study

In FY07, DESC asked LMI to perform a congressionally

required study of DoD use of biodiesel, ethanol, and

other biofuels and to recommend ways to increase their

usage through FY12. Congress saw DoD as a prime

candidate for increasing alternative fuel use because it

consumed roughly 136 million barrels of petroleum in

FY06, or 1.8 percent of the national total.


From the start, we saw that DoD’s potential future use

of biofuels was likely to have only a minimal direct

impact on reducing the nation’s petroleum usage. DoD’s

use of biofuels is limited to nontactical vehicles, which in

FY06 constituted only 1.4 percent of its petroleum

usage. Currently, biofuels are not capable of replacing the

two largest components of DoD’s petroleum consump-

tion, jet fuel and marine diesel, and are prohibited from

use in military tactical vehicles due to operational and

mission-readiness concerns.

Nonetheless, we concluded that DoD was capable of

greatly increasing its use of biofuels over the next 5 fiscal

years. By FY12, DoD could increase its use of E85 by an

estimated 19.6 million gasoline gallon equivalents and its

use of B20 by 6.4 million gasoline gallon equivalents by

fully implementing the report’s five recommendations,

almost a fourfold increase over FY06 levels.

This study further showed that one of the best oppor-

tunities to increase biofuel use was to focus on the cur-

rent fleet rather than on expanding the composition of

biofuel-capable nontactical vehicles.We also found that

the measures for increasing DoD biofuel use concern

two primary underlying issues: (1) fleet operators do not

know that their vehicles can use biofuels or where com-

mercial biofuel stations are located, and (2) commercial

fueling stations, DoD exchanges, and DoD installation

fueling sites lack a biofuel infrastructure.

Three of the study’s recommendations centered on the

use of commercial biofuel stations, which is the most cost-

effective means for DoD to increase its use of biofuels:

� Direct operators of nontactical vehicles to use the biofuel

pump at biofuel stations. Using individual DoD non-

tactical vehicle fuel transaction data for FY06 at

commercial stations, we found that fleet operators

use the conventional fuel pump more than the bio-

fuel pump when filling up their E85 flex-fuel and

diesel vehicles at commercial biofuel stations.


� Divert fueling of biofuel-capable nontactical vehi-

cles from conventional stations to biofuel stations

when nearby. A geographic information sys-

tem analysis of DoD fuel transaction data

suggested that when near E85 stations, oper-

ators of flex-fuel vehicles used gas stations

more than 90 percent of the time.

� Deploy E85 flex-fuel vehicles near E85 stations.

These actions would enable DoD to increase its

use of E85 by almost seven times FY06 levels

and B20 use by 16 percent.

Commercial biofuel infrastructure, however, is

limited: the nation has only a little more than

1,000 publicly accessible E85 stations and 600

publicly accessible B20 stations. Most of these

stations are located far from DoD locations (pri-

marily in the Midwest), so most DoD sites

would need a new biofuel refueling infrastruc-

ture to increase biofuel use.

DESC and LMI identified candidate DoD fuel-

ing sites for new biofuel infrastructure, including

79 potential DoD exchanges and 107 military

fueling sites with new E85 pumps, as well as 11

DoD exchanges and 60 military fueling sites

with new B20 pumps.We are currently helping

DESC complete detailed site-specific evaluations

to confirm the identified potential increase in

biofuel use; determine whether DoD policy can

be met; decide whether conversion or installa-

tion of infrastructure is appropriate; and evaluate

the cost, feasibility, and advisability of the new

biofuel infrastructure.

Even small changes in biofuel refueling behav-

ior and limited installation of biofuel infrastruc-

ture could drastically increase DoD’s use of bio-

fuels. Those efforts would also support expansion

of the biofuel industry and move the nation for-

ward in promoting energy security.

Leading the Dialogue on Energyand Climate Change

Any approach to analyzing either energy usage

or climate change must consider the other: they

are clearly intertwined.

LMI is committed to helping the government

understand and mitigate climate change.Through

our climate change program, we are demonstrat-

ing thought leadership at the federal level.

Two internally funded projects are leading this

effort. First, LMI recently published A Federal

Leader’s Guide to Climate Change, a major new book

on this topic being distributed to leaders in the

new administration as they take office. Members

of our Energy and Environment group prepared

this book, which addresses all aspects of the

climate change issue from the perspective of the

federal leader.

In a related project, we partnered with the

World Resources Institute to develop a Public-

Sector Protocol for Greenhouse Gas Accounting,

which is based on the institute’s corporate stan-

dard, recognized worldwide as the best approach

to greenhouse gas accounting.Through stake-

holder meetings, we engaged representatives

from each federal agency active in greenhouse

gas accounting to identify issues unique to the

federal government.That protocol soon will be

available to guide federal agencies to consistent

results as they implement their own efforts.

Moving beyond this protocol, we anticipate

that the new president will expect all agencies to

report their greenhouse gas emissions as a first

step to reduction.To prepare for the expected

executive order and related regulations, we host-

ed an executive forum on Federal Greenhouse

Gas Accounting in mid-October 2008; the


forum was attended by members of the Senior

Executive Service who will play a major role in

crafting any executive order. Such preparations

leverage our experience creating the protocol

and should help ensure that any executive order

is soundly conceived and effective.

In 2008, we also advised DESC on the imple-

mentation of the Energy Independence and

Security Act elements related to greenhouse gas

emissions from fuel supplies.The primary con-

cern we explored was the current and anticipated

increase in the use of Canadian tar sands–derived

crude oil and further introduction of Fischer-

Tropsch–derived fuels in the DoD fuel supply

chain.We estimated the current amount of the tar

sands crude oil making its way to the U.S. market

and the distribution within the current list of

DESC suppliers. From current and planned fac-

tors, we forecast the potential for increased use of

the tar sands oil and the potential consequences

for DESC and DoD.

We are now working with the office of the

Architect of the Capitol to help it meet a goal

mandated by Congress to reduce energy use (and

greenhouse gas emissions). Our work also extends

to nonfederal entities: we recently began working

with the office of the Mayor of NewYork City,

advising on energy use and greenhouse gas emis-

sions from city-operated buildings.

The challenge of climate change is daunting,

and a solution is not near.A changing climate

will impact all government operations, and

efforts to reduce greenhouse gas emissions or

adapt to climate change will challenge agencies

for the foreseeable future.We will continue to

offer thought leadership and a range of tools that

all branches of government will be able to use to

address the challenge.

Managing Energy in the Supply Chain

Energy management is a critical issue that organ-

izations, both public and private, need to address

to secure long-term growth. Energy use is close-

ly linked to greenhouse gas emissions, which are

a primary cause of climate change.Although

managing energy and greenhouse gas emissions

internally benefits an organization, larger benefits

are reaped by managing them throughout the

organization’s supply chain.That management

involves collaboration with upstream and down-

stream supply chain partners to reduce environ-

mental impacts while optimizing supply chain

performance.

LMI has embraced an integrated approach that

draws from our expertise in energy and environ-

mental management as well as in supply chain

management. Our thought leadership in this area

began with the development of GreenSCOR,

which integrates environmental management

principles with the Supply Chain Operations

Reference model, a standard supply chain man-

agement framework embraced by federal agen-

cies and the commercial industry.The result is a


ENERGY• COST OF FUEL • TRANSPORT • PETROLEUM • GROUND SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTEETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET • FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURALGAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS • EMISSIONS • GREENSCOR • SUPPLY CHAIN OPERATIONS • ACTIONENERGY• COST OF FUEL • TRANSPORT • PETROLEUM • GROUND SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTEETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET • FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURALGAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS • EMISSIONS • GREENSCOR • SUPPLY CHAIN OPERATIONS • ACTIONENERGY• COST OF FUEL • TRANSPORT • PETROLEUM • GROUND SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTEETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET • FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURALGAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS • EMISSIONS • GREENSCOR • SUPPLY CHAIN OPERATIONS • ACTIONENERGY• COST OF FUEL • TRANSPORT • PETROLEUM • GROUND SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTEETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET • FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURAL

In 2008, we also advised DESC on the implementation of the Energy Independence

and Security Act elements related to greenhouse gas emissions

from fuel supplies.

fully integrated framework that allows managers to con-

sider environmental and business issues simultaneously

rather than separately.

We continue to build on the GreenSCOR concept by

adding greenhouse gas and environmental footprint met-

rics to enable use of the framework to assist with manag-

ing climate change impacts in the supply chain.We are

also continuing to work with the World Resources

Institute and World Business Council for Sustainable

Development to develop a standard protocol for measur-

ing climate change impacts of supply chain operations.

By having a standard protocol, every organization could

focus on greenhouse gas emissions issues with partners

across all supply chains using a single data foundation.

In support of this protocol development, we conducted

a series of case studies on companies that are measuring

greenhouse emissions throughout their supply chain.We

found that they encounter several major barriers:

� Difficulty in defining relevant activities. Scoping the sup-

ply chain for measuring greenhouse gas emissions

can be difficult. Project leaders need to identify

material activities among the myriad direct and in-

direct activities involved. Should the data center be

included? Employee business travel? Headquarters

facility heating? With no standards to guide the scop-

ing process, managers must rely on their experience

and expertise to decide.

� Lack of partner data. More organizations are measur-

ing their corporate greenhouse gas emissions, but this

practice is far from ubiquitous. Companies have

found that many supply chain partners, especially

smaller firms and those located in developing coun-

tries, do not account for their greenhouse gas emis-

sions. Without readily available data, managers must

work with their partners to develop emission esti-

mates.

� Lack of standard practices. Although greenhouse gas

accounting is being performed by a growing number


of companies, the absence of standards means

that a variety of methods are used, so collec-

tion of emissions information from partners

needs to be accompanied with an explana-

tion of the methods used. Overall, these dif-

ferent methods make comparing supply

chain partner greenhouse gas emissions per-

formance difficult without undergoing an

effort to normalize the data across the supply

chain.

� Lack of allocation methods for emissions. When

measuring greenhouse gas emissions, much

like measuring activity costs, overhead activi-

ties need to be allocated to assess their impact

on unit-level emissions. For example, in a

facility that supports several supply chains,

how should the facility heating and lighting

be allocated to each? Multiply this question

by the number of nodes on a supply chain

and the need for standard guidance is clear.

� Difficulty in capturing use and disposal emissions.

Companies tend to have a good handle on

the path a product takes to get into a cus-

tomer’s hands.What the customer does with

the product and how it is disposed of is

murkier. However, most greenhouse gas

accounting programs attempt to measure

these phases of the product life cycle.

Without proven methods for estimating use

and disposal emissions, this task is extremely

difficult.

The barriers are not the whole story.We found

that the companies that best measured green-

house gas emissions in their supply chain shared

common attributes.We identified the following

success factors for measuring the greenhouse gas

footprint of a supply chain:

� Prepare a structured action plan. It should be no

surprise that the companies successful in

measuring greenhouse gas emissions

throughout their supply chains start with a

structured action plan with a realistic time-

line. These plans typically include the meth-

ods and standards used to measure emissions

as well as a clear project scope and objective.

� Move beyond the buyer-seller relationship. Most

companies have a transactional, often adver-

sarial, buyer-seller relationship with their

supply chain partners. By moving beyond

this relationship—through environmental

managers talking with environmental man-

agers—the sharing of greenhouse gas infor-

mation and data is smoother.

� Select a standard. Successful companies often

start their greenhouse gas measurement proj-

ects by selecting a standard.A standard makes

the information needed from partners and

internal organizations clear, greatly stream-

lining the measurement process.

� Start small. Collecting and processing green-

house gas emissions data throughout a supply

chain is a resource-intensive effort that

requires significant learning. Companies that

start with a pilot study and then expand

improve the overall measurement process.

� Get help. Measurement of greenhouse gas

emissions throughout a supply chain is an

emerging practice.A company is unlikely to

possess enough internal expertise for this

effort. Successful companies recognize this

situation and often bring in outside experts

to help collect and process the data.They

also have internal personnel learn directly

from the outside experts and build internal

expertise.

Measuring and managing greenhouse gas emis-

sions in the supply chain is an emerging practice.


The organizations that have been successful tout

benefits ranging from the money saved through

reduced energy use to the operational advantages

gained from more strategic relationships with

suppliers and customers. More important, these

companies have also found innovative ways to

change supply chain operations.Those innova-

tions often go beyond reducing environmental

impacts and into customer value creation.

We will stay on the forefront of sustainable

supply chain management.Working with our

clients and organizations like the World

Resources Institute and the World Business

Council for Sustainable Development, we can

build supply chains that effectively meet cus-

tomer requirements for services and material

while reducing environmental impacts and

energy consumption.

Summary

The depletion of traditional energy sources is

inevitable. Eventually, new alternatives must be

found, but, in the meantime, federal leaders

should take intermediate measures to decrease

energy use and find innovative sources of energy.

An even graver problem is global climate

change, which will continue even if we stop

emissions now. Federal executives need a famil-

iarity with the science behind the changes and a

working knowledge of measures for mitigation

and adaptation.

LMI is there—with our deep knowledge and

broad experience—to perform the research and

analysis that will result in practical solutions to

help the federal government respond to these

daunting challenges.



Client StudiesTHROUGH RESEARCH AND ANALYSIS, LMI has helped a broad range of

clients enhance their government management processes.The cases that

follow demonstrate the multifaceted expertise we offer to enable them

to find lasting, practical solutions to the complex problems of public

administration.

INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDSIMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OFOPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS • ORGANIZATIONAL ANALYSIS • COMPETENCY MODELINGLEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITIONENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL

AcquisitionNNaavvaall SSuuppppllyy SSyysstteemmss CCoommmmaanndd

EEvvaalluuaattiinngg PPBBLL BBuussiinneessss CCaassee AAnnaallyyssiiss

The Naval Supply Systems Command (NAVSUP)

asked LMI to evaluate its use of a business case analysis

(BCA) when comparing the costs and benefits of tradi-

tional maintenance support with a performance-based lo-

gistics (PBL) contract proposal. The objective of the BCA

was to provide the information necessary to make a fully

informed decision, helping choose an outcome that im-

proves system availability while reducing costs.

Our evaluation consisted of three major tasks: reviewing

the processes and methods currently used, validating their

conformance with government policy guidance, and com-

paring the PBL BCA model with government and indus-

try benchmarks.

After reviewing BCA documents and assessing their effi-

cacy, we concluded that NAVSUP should use net present

value to compute the time-weighted costs and benefits of

a PBL arrangement; omit the nonrelevant costs that BCAs

currently contain, such as inventory control point costs;

and subject the PBL arrangements to periodic postaward

audits to determine whether actual performance matches

that predicted in the BCA.

DDeeppaarrttmmeenntt ooff HHoommeellaanndd SSeeccuurriittyy

IInncceennttiivviizziinngg BBeetttteerr PPrrooccuurreemmeenntt RReeqquueessttss

The Director of the Office of Procurement Operations

(OPO), Department of Homeland Security (DHS),


wanted to change how DHS charged its cus-

tomers for executing contract actions on their be-

half. We were asked to evaluate OPO’s current

fee-for-service pricing model and to design an

alternative that incentivized customers to furnish

better inputs to the acquisition system. These im-

proved inputs would allow OPO to promulgate

solicitations more quickly and cheaply. The spe-

cific objectives of this 3-month study were to

(1) assess the OPO pricing model, (2) explore and

test alternative pricing models, and (3) investigate

whether it was feasible and desirable for OPO to

offer discounts to customers on the basis of the

quality of the acquisition request documents they

submitted to OPO.

We began our assessment of OPO’s operations

by looking at the composition of its total annual

operating costs. We then examined the current

and projected workload in the OPO divisions

that directly perform procurement activities for

customers in DHS and gathered information

about cost models used by other fee-for-service

procurement organizations in the federal govern-

ment. We used these findings to develop an alter-

native cost model, which we applied to the

current and projected composition of OPO’s

business base.

The OPO director was well satisfied with our

recommendations, stating that the alternative

model would improve financial management op-

erations and enable more businesslike, productive

customer relationships. The director further com-

mended us for delivering a high-quality product

that responded to all requirements. We are cur-

rently helping the OPO staff implement the new

cost model.

OOppeerraattiioonnaall TTeesstt aanndd EEvvaalluuaattiioonn

DDeevveellooppiinngg aa RReelliiaabbiilliittyy IInnvveessttmmeenntt

MMooddeell

Because of alarming unsuitability trends,the Director of Operational Test and Evaluation

(DOT&E), Office of the Secretary of Defense

(OSD), commissioned LMI in 2007 to assess the

costs to the government of acquisition programs

failing to achieve adequate levels of operational

suitability. DOT&E sought to establish the empir-

ical relationships between reliability investment

and life-cycle support costs.

That assessment, which was performed by our

Investment and Cost Analysis group, showed a

strong relationship between investment and relia-

bility improvement. We concluded that prospects

are good for capturing the predictive properties of

this relationship in a forecasting model. During

the second phase of this effort, we developed an

intermediate-level model that captures the trend

of cost as a function of improvement reasonably

well. We are continuing the effort by obtaining

data from more reliability programs to improve

the calibration of our model and better under-

stand the relation between reliability improve-

ment and cost in the design period. We are also

building a more detailed design model to grasp

how the maturity of reliability engineering affects

the efficiency with which an investment in relia-

bility is translated into a reliability improvement.

Facilities and Asset ManagementCCoorrrroossiioonn OOffffiiccee

UUnnddeerrssttaannddiinngg CCoorrrroossiioonn IImmppaaccttss oonn

WWeeaappoonn SSyysstteemmss aanndd IInnffrraassttrruuccttuurree

As a strategic partner with DoD’s Office of

Corrosion Policy and Oversight, we formulated a

method for establishing a corrosion cost baseline

and then collected and assessed detailed corrosion

information. The data are weapon system specific

down to the work unit code or work breakdown

structure level and are further segmented into

structure or parts, labor or material, and mainte-

nance level (depot or field).


Our cost-of-corrosion studies have been universally ac-

claimed because, for the first time, DoD has credible and

actionable corrosion cost data available for making re-

source allocation decisions. Consequently, the military

services are now able to focus on their high corrosion cost

and readiness drivers. For example, using our method, we

identified the corrosion costs of Army aircraft, helicopters,

missiles, and ground combat vehicles ($3.6 billion); Navy

ships and submarines ($2.4 billion); Marine Corps ground

combat vehicles ($0.7 billion); Navy and Marine Corps

aviation and missiles ($3 billion); and DoD facilities world-

wide ($1.8 billion). The DoD science and technology

community is now using our findings as a basis for jointly

funding corrosion mitigation research and development

projects with the military services.

The Government Accountability Office (GAO) was suf-

ficiently impressed with the quality of our analysis to rec-

ommend in its report, High-Level Leadership Commitment

and Actions Are Needed to Address Corrosion Issues, GAO-07-

618, that DoD develop an action plan to use the results of

our study. In addition, DoD Instruction 5000.67, Preven-

tion and Mitigation of Corrosion on DoD Military Equipment

and Infrastructure, has recently institutionalized the effort by

requiring recurring assessments of cost-of-corrosion base-

line studies.

DDeeppaarrttmmeenntt ooff EEnneerrggyy

PPllaannnniinngg RRaaddiiooaaccttiivvee WWaassttee CClleeaannuupp

The Department of Energy (DOE) has an ongoing

project at its Hanford Site near Richland, WA, to build a

plant to treat approximately 53 million gallons of chemi-

cally hazardous and radioactive wastes for subsequent dis-

posal at more permanent repositories. Established in 1943,

the Hanford Site, a former nuclear production complex


CORROSION • WEAPON SYSTEMS • INFRASTRUCTURE • BASELINE • COST DATA • RADIOACTIVE WASTE CLEANUP• FUTURE •TECHNICAL EFFORTS • SECURE BORDERS • CIVIL ENGINEERING • SUPPLY CHAIN MANAGEMENT • ENVIRONMENTAL •REGULATIONS • VALUE ENGINEERING • PERFORMANCE MEASUREMENT • CUSTOMER SERVICE • BUSINESS CASE ANALYSIS •NET PRESENT VALUE • ACQUISITION SYSTEM • PRICING MODEL • WORKLOAD • FORECASTING MODEL • SYSTEMS ENGINEERING •GOVERNMENT COMPLIANCE • GLOBAL ACQUISITION SYSTEM • REMEDIATION PLAN • DATA REPOSITORY • COST EFFECTIVE •TREATMENT EFFECTIVENESS •DRUG EFFICACY • QUALITY OF CARE • SOFTWARE • RECORDS MANAGEMENT • LOGISTICS •READINESS • 360-DEGREE LOGISTICS • ENTERPRISE VALUE STREAM • WATERCRAFT DEVELOPMENT • MARITIME • READINESS •CAPABILITY-BASED LOGISTICS • STRATEGIC SEAPORT • PORT AUTHORITIES • READINESS-BASED SPARING • ENTERPRISE •RESOURCE PLANNING • SERVICE PARTS • DOMESTIC FREIGHT DISTRIBUTION NETWORK • 3PL • PETROLEUM • BIODIESEL •SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTE • ETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET •FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURAL GAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS •

Our cost-of-corrosion studies have been

universally acclaimed because,

for the first time, DoD has credible

and actionable corrosion cost data available

for making resource allocation decisions.

on the Columbia River, was also home to the first full-

scale plutonium production reactor in the world.

The magnitude and complexity of the cleanup are

unprecedented. Planners are faced with overlapping

technical, political, regulatory, and cultural interests. Con-

sequently, DOE (along with the Washington State Depart-

ment of Ecology and U.S. Environmental Protection

Agency) launched an effort to evaluate a wide range of

technologies as potential options for building a second

low-activity waste treatment facility.

The Assistant Secretary of Energy for Environmental

Management commissioned an independent review panel

of five subject matter experts from industry and govern-

ment to ensure all viable options have been considered

and appropriately evaluated. We provided one member of

the panel to help review the technical plans from the en-

gineering economics and financial perspectives. This staff

member’s probabilistic methods of analyzing the likely

costs of the various alternatives and the projected budget

levels required to finance those alternatives added a unique

insight to the panel’s assessment. The panel’s recommenda-

tions affected DOE priorities for planning future technical

efforts. The panel also briefed its results to the staff of the

congressional committees responsible for overseeing the

waste treatment plant operations.

CCuussttoommss aanndd BBoorrddeerr PPrrootteeccttiioonn

SSeeccuurriinngg AAmmeerriiccaa’’ss BBoorrddeerrss

We are helping the U.S. Customs and Border Protection

(CBP) execute its Secure Border Initiative, a comprehen-

sive multiyear plan to secure America’s borders and reduce

illegal entry. Our support includes overseeing the program

management for the design and construction of physical

fences and barriers on the U.S. southwest border. We are

providing support in four broad areas: civil engineering,


• CORROSION • WEAPON SYSTEMS • INFRASTRUCTURE • BASELINE • COST DATA • RADIOACTIVE WASTE CLEANUP• FUTURE • TECHNICAL EFFORTS • SECURE BORDERS • CIVIL ENGINEERING • SUPPLY CHAIN MANAGEMENT • ENVIRONMENTAL • REGULATIONS • VALUE ENGINEERING • PERFORMANCE MEASUREMENT • CUSTOMER SERVICE • BUSINESS CASE ANALYSIS • NET PRESENT VALUE • ACQUISITION SYSTEM • PRICING MODEL • WORKLOAD • FORECASTING MODEL • SYSTEMS ENGINEERING• GOVERNMENT COMPLIANCE • GLOBAL ACQUISITION SYSTEM • REMEDIATION PLAN • DATA REPOSITORY • COST EFFECTIVE • TREATMENT EFFECTIVENESS • DRUG EFFICACY • QUALITY OF CARE • SOFTWARE • RECORDS MANAGEMENT • LOGISTICS • READINESS • 360-DEGREE LOGISTICS • ENTERPRISE VALUE STREAM • WATERCRAFT DEVELOPMENT • MARITIME • READINESS• • CAPABILITY-BASED LOGISTICS • STRATEGIC SEAPORT • PORT AUTHORITIES • READINESS-BASED SPARING • ENTERPRISE • RESOURCE PLANNING • SERVICE PARTS • DOMESTIC FREIGHT DISTRIBUTION NETWORK • 3PL • PETROLEUM • GROUND • SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTE • ETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET

We provided one member of the panel

to help review the technical plans

from the engineering economics

and financial perspectives.

real-estate management, environmental engineering and

sciences, and supply chain management.

In the area of civil engineering, we led the development

and organization of the project delivery teams. We also had

a major role in the day-to-day management oversight of

the project, including value engineering. We developed

and managed the real-estate acquisition strategy for three

distinct barrier projects consisting of more than 500 miles

of fence. We are also continuing to support planning and

everyday management of the real-estate activities associ-

ated with those projects. In the area of environmental en-

gineering and sciences, we developed and managed a

strategy for complying with environmental laws and regu-

lations. We are now managing the daily review and moni-

toring of environmental activities. Finally, we are assisting

with the development and management oversight of the

construction-related supply chain activities for the three

projects.

UU..SS.. PPoossttaall SSeerrvviiccee

RReeaalliiggnniinngg tthhee FFaacciilliittiieess OOrrggaanniizzaattiioonn

The U.S. Postal Service (USPS) manages 30,000 facili-

ties and properties nationwide. At the end of FY07, we

entered into a partnership with USPS to develop standard

operational processes for its facilities, analyze its organiza-

tional structures, and develop a plan for optimizing per-

sonnel use.

After collecting and reviewing sample data, we found no

standard output expectations for employees or standard

management and reporting structures. We further found

that output rates for measurable processes varied by loca-

tion and that these processes were performed by a cross-

section of employees drawn from a variety of classification

types.

We used an iterative process to develop performance

measurements and goals using a statistical analysis

of performance across the USPS Facilities organization.

We also estimated the number and types of employees

needed to perform the work at each location and recom-

mended restructuring through a combination of outsourc-

ing, consolidation, and centralization to improve Facilities

customer service and increase efficiency and effectiveness.


Financial ManagementUU..SS.. AAggeennccyy ffoorr IInntteerrnnaattiioonnaallDDeevveellooppmmeenntt

CChheecckkiinngg CCoommpplliiaannccee wwiitthh FFFFMMIIAA

In November 2006, as part of the annual inter-

nal review of financial statements, the U.S. Agency

for International Development (USAID) inspec-

tor general asked LMI to test the recently com-

pleted core financial system (referred to as

Phoenix) to confirm its compliance with Federal

Financial Management Improvement Act

(FFMIA) requirements. To do so, we developed a

checklist-based test method as a cost-effective

alternative to a detailed transaction-based test. We

also engaged the services of an independent pub-

lic accounting firm to ensure that the documenta-

tion we produced would withstand an audit.

In its annual report (GAO-07-914) on govern-

ment compliance with FFMIA, GAO singled out

USAID as the only Chief Financial Officers Act

agency that produced positive assurance that its fi-

nancial management systems were substantially in

compliance with requirements.

We further found that USAID’s Global Acquisi-

tion System (GLAS)/Phoenix integrated system

complies with approximately 72 percent of the

Acquisition/Financial Systems Interface Requirements

issued in 2002 by the Joint Financial Management

Improvement Program. We recommended that

USAID develop a remediation plan that addresses

the requirements with which GLAS/Phoenix

does not comply. We specifically suggested that

USAID determine whether the areas of noncom-

pliance are necessary for its business and, if so, that

it make use of any functionality already available

in the GLAS/Phoenix system, configuring or up-

grading it to support USAID in these areas.

Information and TechnologyCCeenntteerrss ffoorr MMeeddiiccaarree aanndd MMeeddiiccaaiiddSSeerrvviicceess

DDeetteerrrriinngg MMeeddiiccaarree aanndd MMeeddiiccaaiidd

FFrraauudd aanndd AAbbuussee

The Centers for Medicare and MedicaidServices (CMS) asked LMI to help manage the

implementation of a data repository of integrated

Medicare and Medicaid data from all of the states

and territories. The repository will allow investi-

gators—for the first time—to perform detailed

cross-state and cross-program analyses.

We prepared the business case for the data repos-

itory, which CMS had projected would provide a

minimal savings of $25 billion when imple-

mented (although analysis of the business value

during the proof-of-concept phase indicated that

the savings estimate may be low).

By the end of FY09, the project will move to

production with data on 44 million beneficiaries

and 12 billion claims. CMS will then expand the

use of the data to a broad range of health care

analyses, such as treatment effectiveness, drug effi-

cacy, quality of care, and cost metrics. Although

these analyses have been performed in the past, no

assemblage of data has even remotely equaled the

size and breadth of the information that this proj-

ect will make available to CMS.


• CORROSION • WEAPON SYSTEMS • INFRASTRUCTURE • BASELINE • COST DATA • RADIOACTIVE WASTE CLEANUP• FUTURE • TECHNICAL EFFORTS • SECURE BORDERS • CIVIL ENGINEERING • SUPPLY CHAIN MANAGEMENT • ENVIRONMENTAL • REGULATIONS • VALUE ENGINEERING • PERFORMANCE MEASUREMENT • CUSTOMER SERVICE • BUSINESS CASE ANALYSIS • NET PRESENT VALUE • ACQUISITION SYSTEM • PRICING MODEL • WORKLOAD • FORECASTING MODEL • SYSTEMS ENGINEERING• GOVERNMENT COMPLIANCE • GLOBAL ACQUISITION SYSTEM • REMEDIATION PLAN • DATA REPOSITORY • COST EFFECTIVE • TREATMENT EFFECTIVENESS •DRUG EFFICACY • QUALITY OF CARE • SOFTWARE • RECORDS MANAGEMENT • LOGISTICS • READINESS • 360-DEGREE LOGISTICS • ENTERPRISE VALUE STREAM • WATERCRAFT DEVELOPMENT • MARITIME • READINESS• • CAPABILITY-BASED LOGISTICS • STRATEGIC SEAPORT • PORT AUTHORITIES • READINESS-BASED SPARING • ENTERPRISE • RESOURCE PLANNING • SERVICE PARTS • DOMESTIC FREIGHT DISTRIBUTION NETWORK • 3PL • PETROLEUM • GROUND • SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTE • ETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET

We recommended that USAID develop a remediation

plan that addresses the requirements with which

GLAS/Phoenix does not comply.

OOccccuuppaattiioonnaall SSaaffeettyy aanndd HHeeaalltthh AAddmmiinniissttrraattiioonn

LLaauunncchhiinngg aa NNeeww IInnffoorrmmaattiioonn MMaannaaggeemmeenntt

SSyysstteemm

This year, LMI worked with the Occupational Safety

and Health Administration (OSHA) to replace its

aging information management systems with a single

enterprise-wide software solution: OSHA Information

System (OIS). This new web-based system integrates sev-

eral market-leading technologies to provide Department

of Labor and state occupational safety and health person-

nel with the process-driven data collection, document and

records management, and sophisticated business intelli-

gence reporting tools needed to maximize effectiveness in

22 separate business areas—from compliance enforcement

to safety management consultation. In support of this ef-

fort, we designed and configured the new OIS and suc-

cessfully deployed a pilot version to a nationwide

community of more than 150 stakeholders.

LogisticsAArrmmyy GG--44

MMaappppiinngg 336600--DDeeggrreeee LLooggiissttiiccss RReeaaddiinneessss

LMI helped the Army G-4 develop an enterprise-level

value stream map of 360-degree logistics readiness to

identify metrics and recommend actions to institutionalize

process improvements. Within the Army, 360-degree

logistics readiness entails the capability to see, assess, and

synchronize corporate enterprise assets in support of

warfighting operating forces.

In this effort, we reviewed Army policies associated with

building a 360-degree materiel readiness picture to deter-

mine the components of logistics readiness, especially out-

side of brigade combat teams. Combat service support

commands, units, and activities are particularly important

to Army 360-degree awareness. The enterprise value

stream map we developed featured overlays of areas of in-

terest for six specified readiness indicators: unit materiel

readiness, enterprise inventory visibility, operational re-

quirements versus sustainment resources, sustainment base

production, retrograde, and Army equipment loss replace-

ment.


UU..SS.. AArrmmyy

WWaatteerrccrraafftt PPllaannnniinngg aanndd SSuussttaaiinnmmeenntt

For the Combined Arms Support Command, LMI au-

thored, staffed, and published Army Watercraft Master Plan,

which sets the course for watercraft development within

the Army through the year 2025. We also assisted the

Army Sustainment Command with planning for the use

of prepositioned Army watercraft during exercise Pacific

Reach 08 in Japan. Also for the Army Sustainment Com-

mand, we provided technical, analytical, and planning as-

sistance in implementing Army sustainment initiatives

supporting the Global War on Terror. We further recom-

mended performance metrics for the Army organizations

responsible for reporting status and developed a plan of

action and milestones required to institutionalize process

improvements.

DDeeffeennssee LLooggiissttiiccss AAggeennccyy

SSuussttaaiinniinngg AAggiinngg WWeeaappoonn SSyysstteemmss

LMI manages and executes the Defense Logistics

Agency’s (DLA’s) Weapon System Sustainment Program

(WSSP), which conducts research and development

(R&D) to improve readiness and reliability and reduce the

cost of aging weapon systems. The 5-year-old DLA Aging

Systems Partnership (DASP) focuses on providing technol-

ogy development, demonstration, and specialized analyses.

The effort provides WSSP with a firm, fact-based under-

standing of DLA’s business challenges and opportunities

for organizational improvement and of the quantitative

impact of R&D outcomes on customer service, inventory

investment, and procurement workload. Under DASP, we

conducted several short-term projects to improve DLA

support to the warfighter through the development and

implementation of tools, methods, techniques, data, and


• CORROSION • WEAPON SYSTEMS • INFRASTRUCTURE • BASELINE • COST DATA • RADIOACTIVE WASTE CLEANUP• FUTURE • TECHNICAL EFFORTS • SECURE BORDERS • CIVIL ENGINEERING • SUPPLY CHAIN MANAGEMENT • ENVIRONMENTAL • REGULATIONS • VALUE ENGINEERING • PERFORMANCE MEASUREMENT • CUSTOMER SERVICE • BUSINESS CASE ANALYSIS • NET PRESENT VALUE • ACQUISITION SYSTEM • PRICING MODEL • WORKLOAD • FORECASTING MODEL • SYSTEMS ENGINEERING• GOVERNMENT COMPLIANCE • GLOBAL ACQUISITION SYSTEM • REMEDIATION PLAN • DATA REPOSITORY • COST EFFECTIVE • TREATMENT EFFECTIVENESS • DRUG EFFICACY • QUALITY OF CARE • SOFTWARE • RECORDS MANAGEMENT • LOGISTICS • READINESS • 360-DEGREE LOGISTICS • ENTERPRISE VALUE STREAM • WATERCRAFT DEVELOPMENT • MARITIME • READINESS• • CAPABILITY-BASED LOGISTICS • STRATEGIC SEAPORT • PORT AUTHORITIES • READINESS-BASED SPARING • ENTERPRISE • RESOURCE PLANNING • SERVICE PARTS • DOMESTIC FREIGHT DISTRIBUTION NETWORK • 3PL • PETROLEUM • GROUND • SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTE • ETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET• FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURAL GAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS • EMISSIONS • GREENSCOR • SUPPLY CHAIN OPERATIONS • ACTION • ENTERPRISE VALUE STREAM • DATA REPOSITORY • GROUND

Also for the Army Sustainment Command,

we provided technical, analytical,

and planning assistance in implementing

Army sustainment initiatives supporting

the Global War on Terror.

products. Projects are approved on the basis of the assessed

likelihood that their results will directly affect critical cus-

tomer support metrics, such as backorders, customer wait

time, and cost.

We have overseen more than 40 short-term projects

supporting the development and execution of more than

$10 million in DLA R&D projects. We built and continue

to maintain a unique and extensive array of business data

spanning more than 10 years. In-house data allow timely

access and rapid analysis of performance measures that

drive DLA leadership decisions. We regularly delivered

detailed characterizations of DLA’s business trends for the

aviation, land, and maritime supply chains, and we con-

ducted numerous quick turnaround and what-if analyses

in business areas such as long-term contracts, quality,

suppliers, and new item entry. We further provided DLA

with the unique ability to mine data, organize unstruc-

tured or free-text data, and develop coherent views of data

from multiple sources, allowing DLA to enhance its un-

derstanding of the items and customers it supports.

DDeeppaarrttmmeenntt ooff DDeeffeennssee

AAnnaallyyzziinngg CCaappaabbiilliittyy--BBaasseedd LLooggiissttiiccss CCoossttss

LMI continues to support the Assistant Deputy Under

Secretary of Defense for Supply Chain Integration in ef-

forts to improve visibility and analysis of DoD’s logistics

resources. Our support has produced an analytic founda-

tion for improving and expanding DoD’s ability to link

both programmed and budgeted resources with logistics

capabilities, while allowing for greater visibility into pro-

gram financing for informed decision making.

Our work began with an assessment of the accuracy of

previous DoD efforts to identify logistics resources in sup-


porting management decision making. Using the results

from that assessment, we next reviewed DoD’s current fi-

nancial regulations, processes, and reporting systems. We

then developed business rules through which logistics op-

erations and maintenance resources can be more accu-

rately and consistently reported from current financial

reporting systems.

Using a similar method, we are now expanding our work

into procurement; research, development, test, and evalua-

tion; and military personnel appropriations, as well as into

logistics Defense Working Capital Fund operations. Al-

though this is a long-term effort, we are achieving results

that have near-term value in helping DoD understand the

costs of logistics capabilities.

SSuurrffaaccee DDeeppllooyymmeenntt aanndd DDiissttrriibbuuttiioonn CCoommmmaanndd

AAnnaallyyzziinngg SSeeaappoorrtt CCaappaabbiilliittiieess

The House Armed Services Committee directed the

Secretary of Defense, through House Resolution 1585, to

develop and implement a plan to optimize the use of U.S.

strategic seaports. The Surface Deployment and Distribu-

tion Command (SDDC) asked LMI to analyze the capa-

bilities of the strategic seaports to handle DoD current

and future requirements to deploy military equipment and

supplies during contingency surge operations.

We determined the optimum number of commercial

and military seaports, identified the best strategic seaport

locations, identified full-time manning targets for SDDC,

and validated the 48-hour port planning order availability

timeline. These results enabled DoD to submit a well-

documented and substantiated plan to Congress in

response to H.R. 1585.

In addition, SDDC is implementing our recommenda-

tions, which will improve port readiness, achieve better

resource use, increase stakeholder understanding of the

strategic seaport program, and greatly improve communi-

cations between port authorities and federal agencies.

MMiilliittaarryy SSeerrvviicceess

SSuuppppoorrttiinngg RReeaaddiinneessss--BBaasseedd SSppaarriinngg

LMI is supporting the Assistant Deputy Under Sec-

retary of Defense for Supply Chain Integration and Air


Force Materiel Command in implementing readiness-

based sparing (RBS) in the enterprise resource planning

(ERP) context. RBS allows the military services to opti-

mize inventories on the basis of their impact on weapon

system availability—rather than suboptimizing on the basis

of individual item performance—enabling the services to

achieve the required availability with the smallest inven-

tory investment.

We are developing a joint approach to RBS that will

synchronize requirements computations across multiple

services. In March 2007, we hosted a joint RBS sympo-

sium for Air Force, Army, Navy, and DLA representatives

that resulted in the development of a paradigm for syn-

chronizing joint requirements. We are continuing to work

with the military services to refine and implement these

concepts.

We are also working to ensure the parts management

portion of the Air Force’s newly selected ERP system will

meet its requirements. We implemented the parts manage-

ment software and are collaborating with the Air Force to

generate test scenarios and compare the software’s per-

formance with the current requirements system.

Organizations and Human CapitalUU..SS.. AArrmmyy

EEssttaabblliisshhiinngg aa 2211sstt CCeennttuurryy BBuussiinneessss

SSttrruuccttuurree

The 160,000 contractors in Iraq, Afghanistan, and

Kuwait represent more than half of the “total force.” If

this situation is any predictor of the future, successful 21st

century military operations must acknowledge the

impact of the many contractors involved in expedi-

tionary operations and their potential influence on


CORROSION • WEAPON SYSTEMS • INFRASTRUCTURE • BASELINE • COST DATA • RADIOACTIVE WASTE CLEANUP• FUTURE •TECHNICAL EFFORTS • SECURE BORDERS • CIVIL ENGINEERING • SUPPLY CHAIN MANAGEMENT • ENVIRONMENTAL •REGULATIONS • VALUE ENGINEERING • PERFORMANCE MEASUREMENT • CUSTOMER SERVICE • BUSINESS CASE ANALYSIS •NET PRESENT VALUE • ACQUISITION SYSTEM • PRICING MODEL • WORKLOAD • FORECASTING MODEL • SYSTEMS ENGINEERING •GOVERNMENT COMPLIANCE • GLOBAL ACQUISITION SYSTEM • REMEDIATION PLAN • DATA REPOSITORY • COST EFFECTIVE •TREATMENT EFFECTIVENESS •DRUG EFFICACY • QUALITY OF CARE • SOFTWARE • RECORDS MANAGEMENT • LOGISTICS •READINESS • 360-DEGREE LOGISTICS • ENTERPRISE VALUE STREAM • WATERCRAFT DEVELOPMENT • MARITIME • READINESS •CAPABILITY-BASED LOGISTICS • STRATEGIC SEAPORT • PORT AUTHORITIES • READINESS-BASED SPARING • ENTERPRISE •RESOURCE PLANNING • SERVICE PARTS • DOMESTIC FREIGHT DISTRIBUTION NETWORK • 3PL • PETROLEUM • BIODIESEL •

We are developing a joint approach to RBS

that will synchronize requirements

computations across multiple services.

mission success. The Secretary of the Army established a

Commission on Army Acquisition and Program

Management in Expeditionary Operations to assess the

current, in-theater system and provide forward-looking

recommendations for an Army business structure that

would best enable 21st century military operations.

We supported the commission throughout its review

and subsequent monitoring of implementation initiatives.

The commission’s analysis—conducted within a com-

pressed 45-day time frame indicative of the immediate

challenges facing the Army—resulted in a report, Urgent

Reform Required: Army Expeditionary Contracting. Its key

findings included the observation that the Army—and,

more broadly, DoD—faces systemic challenges in execut-

ing expeditionary operations, from both operational and

institutional vantage points. The report calls for a change

in culture, through which the Army rapidly recognizes

the importance of contracting. A key recommendation

was to increase the stature, quantity, and career develop-

ment of military contracting personnel. As a direct

result, for the first time in more than a decade, Congress

increased the Army’s authorized number of general offi-

cers by five and added five joint general or flag officer

positions.

Because many of the commission’s recommendations

apply to the rest of the armed forces, we are helping DoD

implement these broader recommendations. We continue

to be part of a dedicated DoD contingency contracting

workforce focused on enabling effective and efficient con-

tracting in support of deployed forces, humanitarian and

peacekeeping operations, and disaster relief through inno-


• CORROSION • WEAPON SYSTEMS • INFRASTRUCTURE • BASELINE • COST DATA • RADIOACTIVE WASTE CLEANUP• FUTURE • TECHNICAL EFFORTS • SECURE BORDERS • CIVIL ENGINEERING • SUPPLY CHAIN MANAGEMENT • ENVIRONMENTAL • REGULATIONS • VALUE ENGINEERING • PERFORMANCE MEASUREMENT • CUSTOMER SERVICE • BUSINESS CASE ANALYSIS • NET PRESENT VALUE • ACQUISITION SYSTEM • PRICING MODEL • WORKLOAD • FORECASTING MODEL • SYSTEMS ENGINEERING• GOVERNMENT COMPLIANCE • GLOBAL ACQUISITION SYSTEM • REMEDIATION PLAN • DATA REPOSITORY • COST EFFECTIVE • TREATMENT EFFECTIVENESS • DRUG EFFICACY • QUALITY OF CARE • SOFTWARE • RECORDS MANAGEMENT • LOGISTICS • READINESS • 360-DEGREE LOGISTICS • ENTERPRISE VALUE STREAM • WATERCRAFT DEVELOPMENT • MARITIME • READINESS• • CAPABILITY-BASED LOGISTICS • STRATEGIC SEAPORT • PORT AUTHORITIES • READINESS-BASED SPARING • ENTERPRISE • RESOURCE PLANNING • SERVICE PARTS • DOMESTIC FREIGHT DISTRIBUTION NETWORK • 3PL • PETROLEUM • GROUND • SYSTEMS • COST EFFECTIVE • TRANSFORM MILITARY WASTE • ETHANOL • BIODIESEL • ALTERNATIVE FUEL • FEDERAL FLEET• FUELING STATIONS • HYBRID ELECTRIC • COMPRESSED NATURAL GAS • BIOFUEL • CLIMATE CHANGE • GREENHOUSE GAS • EMISSIONS • GREENSCOR • SUPPLY CHAIN OPERATIONS • ACTION • ENTERPRISE VALUE STREAM • DATA REPOSITORY • GROUND

As a direct result, for the first time in more

than a decade, Congress increased the

Army’s authorized number of general officers

by five and added five joint general

or flag officer positions.

vative policy, guidance, and oversight. We are fo-

cused on continuity of contracted support to the

warfighter, from deployment throughout a con-

tingency operation; seamless integration of con-

tracted assets with deployed forces is critical in

today’s military environment.

DDeeffeennssee MMeeddiiaa AAccttiivviittyy

TTrraannssffoorrmmiinngg PPuubblliicc AAffffaaiirrss

The Defense Media Activity (DMA)—estab-

lished in response to the 2005 Defense Base Clo-

sure and Realignment Commission (BRAC)

legislation—integrates media service and produc-

tion functions across DoD. The Assistant Secretary

of Defense for Public Affairs asked LMI to help

exploit the full transformational potential of

BRAC to achieve unprecedented synergy and

efficiency in the defense media community.

Following a comprehensive assessment of

DMA’s strategic direction, business position, and

functional configuration, we concluded that the

newly established DMA offered DoD multiple

opportunities for organizational consolidation,

improvement, and innovation. We recommended

several options that supported DMA’s commit-

ment to customer service and its desire to be a

thought leader in the media industry.

DMA is now positioned to leverage new tech-

nology and business practices to apply media con-

vergence principles that combine multiple sources

of media content in one product. As DMA transi-

tions to interim operating capability in 2009 and

full operating capability in 2011, it should be pre-

pared to communicate with both traditional mili-

tary audiences and young service members who

consider themselves “digital natives.”

DDeeppaarrttmmeenntt ooff DDeeffeennssee

SSuuppppoorrttiinngg tthhee DDeeffeennssee

TTrraannssppoorrttaattiioonn CCoooorrddiinnaattiioonn IInniittiiaattiivvee

The Defense Transportation Coordination

Initiative (DTCI) is perhaps the most signifi-

cant materiel distribution transportation effort

affecting DoD since the ocean container revolu-

tion of the 1960s, and LMI had a key role in its

development. Before DTCI, numerous DoD

shippers in the continental United States initiat-

ed freight movements using commercial freight

transportation providers to hundreds of destina-

tions. Multiple information systems were

employed to execute and manage shipment

activity, with no centralized planning, coordina-

tion, or control. DoD shippers acted unilaterally,

independently selecting mode, level of service,

and transportation provider.

DTCI is replacing the current contractors with

a single coordinator for most continental U.S.

shipments, creating a more effective and efficient

business model for managing the domestic

freight distribution network. In the new model,

DoD hired a single third-party logistics (3PL)

coordinator for the day-to-day domestic freight

management. The 3PL coordinator receives ship-

ment requirements, identifies efficiencies, pro-

duces a shipment plan, arranges for the carrier,

and ensures carrier quality. This approach will

increase DoD shipment visibility and consistency

of delivery performance, while decreasing overall

transportation spending by leveraging the large

volume of business. These transportation savings,

estimated at more than $300 million through

2014, will be used to support other requirements

in direct support of the warfighter, while realiz-

ing better transportation performance.

LMI has been a core member of the DTCI ef-

fort since its inception. With the help of a leading

industry 3PL provider, we supported the DTCI

Program Management Office (PMO) in the for-

mulation of a 3PL provider strategy that eventu-

ally will cover more than $270 million of DoD

domestic shipments annually. We analyzed the ini-

tial business case, researched the 3PL industry


market, and developed the information technol-

ogy integration concept. We helped guide the

project management team through complex de-

bates involving DoD and the carrier industry, in-

quiries from GAO and Congress, and the overall

acquisition support process, which eventually led

to the award of a 7-year contract with a potential

value of $1.6 billion. We further designed, devel-

oped, and implemented the DTCI change man-

agement and communications programs. We are

continuing in our central DTCI role via imple-

mentation assistance and PMO support. With the

first two phases of implementation under way, the

initiative is on track to exceed our expectations.

UU..SS.. NNaavvyy

MMooddeerrnniizziinngg tthhee PPeerrssoonnnneell SSyysstteemm

LMI provided performance management

support to the Navy’s Manpower, Personnel,

Education, and Training enterprise in two critical

areas during its transition to the National Security

Personnel System (NSPS). NSPS modernizes a

50-year-old civil service system, allowing DoD

to better attract, recruit, retain, compensate,

reward, and manage employees. We developed

compensation strategies, business rules, and tools

to support implementation of NSPS.

In addition, we trained Navy civilian personnel

who have converted to NSPS in performance

management. To date, we have trained more than

2,800 personnel throughout the Bureau of Naval

Personnel and Navy Recruiting Command or-

ganizations. The training focuses on improving

job objective development skills for supervisors,

self-assessment writing skills for all civilian staff

members, and performance appraisal production

skills for rating officials.

UU..SS.. CCoouurrttss

TTrraannssffoorrmmiinngg EExxeeccuuttiivvee PPoossiittiioonnss

LMI is supporting the U.S. Courts in a bold

initiative to create a unique judicial executive

cadre and transform the way that its executive

positions are structured, recognized, and com-

pensated. Our effort includes the design of a

customized compensation system based on pre-

vailing best practices, recommendations for

strengthening executive management, and identi-

fication of strategies that will enhance executive

recruiting and retention.

Our comprehensive approach to assessing exec-

utive pay for the U.S. Courts included analyzing

current executive positions using court-tailored

executive criteria, reviewing executive recruit-

ment and retention results, and recommending

new position and compensation structures and

management methods. We also provided specific

steps for implementing the recommendations.



Board of Trustees

Seated, left to right: Joseph S. Nye Jr.; Alice C. Maroni; William S. Norman, Chairman of the Board; Joseph E. Kasputys; and Michael A. Daniels. Standing, left to right: William G. T. Tuttle Jr.; Kenneth J. Krieg; Jonathan B. Perlin; Douglas K. Bereuter; Daniel P. Burnham; Patricia McGinnis; Philip A. Odeen; and Robert F. Raggio.

The Board accomplishes much of its business through the following standing committees:

Audit and Finance Committee: Joseph E. Kasputys (Chair), Daniel P. Burnham, Michael A. Daniels,

Alice C. Maroni, and Robert F. Raggio.

Board Governance and Nominating Committee: Philip A. Odeen (Chair), Douglas K. Bereuter,

Patricia McGinnis, Jonathan B. Perlin, and Robert F. Raggio.

Executive Committee: William S. Norman (Chair), Joseph E. Kasputys, Joseph S. Nye Jr.,

and Philip A. Odeen.

Human Resources and Compensation Committee: Joseph S. Nye Jr. (Chair), Douglas K. Bereuter,

Daniel P. Burnham, Patricia McGinnis, and William G.T. Tuttle Jr.


Officers

From left to right: Manik K. Rath, Vice President, General Counsel, and Corporate Secretary; Jeffery P.Bennett, Vice President, Logistics Management; William B. Moore, Vice President, InfrastructureManagement; Donna D. Bennett, Acting Vice President, Resource Management; and Anthony J.Provenzano, Vice President and Chief Financial Officer.


IInnffrraassttrruuccttuurree MMaannaaggeemmeennttLMI’s Infrastructure Management practice helps clientsmeet their responsibilities for the environment, energyconservation, and occupational safety and health;improve management of buildings and other capitalinfrastructure; and enhance the nation’s public healthcare system. Members of this operating unit also areskilled in upgrading programs for personnel and educa-tion and in improving the organizational health of government agencies.

Energy and EnvironmentWe assist DoD, the GeneralServices Administration, andthe U.S. Postal Service withlowering their environment,safety, and occupationalhealth management costs byperforming studies and analy-ses and by benchmarkingtheir practices against indus-try.

Human Capital ManagementWe provide civil and militaryagencies with approaches andtools to develop and imple-ment human capital strategiesand to conduct workforceplanning, and we assist withtheir human capital transfor-mation efforts, includingchange management, succes-sion planning, pay for per-formance, recruitment andretention, executive coaching,and human capital metrics.

Infrastructure andEngineering ManagementWe help federal managersmore effectively manage theirinfrastructure, from acquisi-tion through disposal, using cutting-edge technologies andbest practices to maximizeperformance and mitigaterisk.

Health Systems ManagementWe help clients develop betterbusiness practices thatextend their health care capa-bilities or resources. We givefederal health care providers,payers, and insurance pro-grams policy analysis, re-search, and implementationexpertise. We help solve uni-versal health care problems,such as higher costs and lim-ited access.

Intelligence ProgramsWe offer specialized servicestargeted at helping the intelli-gence community better per-form its mission as well asconsulting services thataddress every facet of agencymanagement. Our under-standing of the unique chal-lenges and demands placedon this community enable usto offer effective, comprehen-sive, and customized services appropriate to its needs.

Organizational ImprovementWe help to create high-performing organizations byimproving their efficiency andeffectiveness. Our workencompasses the strategic,business, service delivery, andcontinuous process improve-ment activities that affect theentire structure and innerworkings of an organization.

Steven J. Stone

Sue E. Tardif

David R. Gallay

John B. Handy Teresa L. Smetzer

Larry J. Conner

Program Directors


LLooggiissttiiccss MMaannaaggeemmeennttLMI has long been renowned for its expertise in logis-tics management. Our success in logistics stems from adeep institutional knowledge; an expertise in best prac-tices; and the employment of proprietary analytic tools,techniques, models, and simulations. Our expertisespans the entire logistics domain.

Operational LogisticsWe support the Office of theSecretary of Defense, JointStaff, and military services byproviding program support,studies and analyses, andmodeling and simulations tohelp clients make policy andprogramming decisions thatresult in innovative, cost-efficient, and operationally effective solutions to theirchallenges in improving logis-tics support to the warfighter.

Maintenance and Readiness ManagementWe help civilian agencies,DoD, and the military servicesmeasure, monitor, and influ-ence the materiel readiness ofweapons systems, equipmentfleets, and repair parts tokeep inventories in optimumoperable condition.

Logistics TechnologyWe provide expertise inproven and emerging logisticstechnologies that enable sig-nificant improvement in logis-tics capabilities and practices.We are proficient in develop-ing the required supportingpolicies.

Strategic LogisticsWe furnish DoD with expertsin strategic logistics planningand resource analysis. Viewedin the context of joint logis-tics, we integrate capability-based portfolio managementacross all components,encompassing the full spec-trum of logistics functionsneeded to meet warfighterrequirements.

Combatant LogisticsWe develop, coordinate, andassist with the implementation of effective logistics and acquisition policies, process-es, procedures, and plans to improve support to all geographic combatant commanders.

Supply Chain ManagementWe support all federal civilagencies and DoD in achiev-ing balanced, effective supplychain support with a variety oforganic and outsourced resources at an affordablecost. We use the SupplyChain Operations Reference(SCOR®) model, among oth-ers, to improve supply chain management practices.

Logistics AnalysisWe assist organizations with improving the flow of materi-als and information needed to design, produce, distribute,and sustain products. We useprocess models to character-ize our clients’ business operations, analytical modelsto optimize key managementdecisions, and computer simulations to explore com-plex relationships in logistics operations.

Raymond A. Schaible

Dennis J. Wightman

William R. Ledder

Peter J. Thede

James A. Weiss

David P. Keller

Eric L. Gentsch

Program Directors


RReessoouurrccee MMaannaaggeemmeennttGovernment decision makers face extraordinary challenges managing their resources, particularly in thewake of increased congressional and public pressure todo more with less. To meet these challenges, LMI pairsfederal expertise with industry best practices, resultingin a targeted set of mission-oriented services.

Financial ManagementWe support federal financialmanagers through strategicassessments, streamlined decision processes, develop-ment and execution of budgets, and creation of financial management policiesand systems.

Resources and AcquisitionWe advise federal acquisitionand grants managers onimproving their policies,streamlining their procedures,and reducing their costs. Oursupport enables the govern-ment to acquire goods andservices more effectively andto better execute the grantprograms authorized byCongress.

Information ManagementWe help federal informationtechnology (IT) managersdevelop strategic plans, man-age programs and IT portfo-lios, independently verify andvalidate services, build enter-prise architectures, and meet information assurance requirements. We also pre-pare business cases to helpagencies secure funding orchoose among competing ITpriorities.

Investment and CostAnalysisWe employ rigorous economic techniques thatcompare costs of programswith intended returns andagency benefits. We evaluatesourcing alternatives, preparefinancial alternatives analysis,use modeling and simulationto estimate benefits, and project long-term life-cyclecosts.

Systems DevelopmentWe produce ISO 9001–certified systems using cross-functional teams thatunderstand government business and how to effectively apply technology toimprove performance. Wealso design, develop, andexecute web-based surveysthat provide population-wide indicators critical to govern-ment decision makers.

Ronald H. Rhodes Wilhelm A. Hansen Jr.

Thomas P. Hardcastle Joseph M. Zurlo

Program Directors

Shahab Hasan


Financial Review

Revenue Growth 1994–2008 ($ Million)

Revenues by Category ($ Million)

Staff—2008Research 745Administrative 108Total Staff 853

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AAddddiittiioonnaall LLMMII LLooccaattiioonnss

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The LMI 2008 Annual Report wasproduced on recycled paper with soy inks by a printer that is carbonneutral and 100% wind-powered.

PPhhoottooggrraapphhyy© Jim Douglass, Los Angeles, CAPages 1, 25, and 31–35Courtesy of the U.S. Air ForcePage 25Courtesy of the U.S. ArmyFront cover and pages 16 and 17Courtesy of the U.S. Navy Pages 17, 19, 25, and 26

• ACQUISITION • FACILITIES, ENVIRONMENT AND ASSET MANAGEMENT • FINANCIAL MANAGEMENT • INFORMATION AND •• TECHNOLOGY • INTELLIGENCE PROGRAMS • LOGISTICS • ORGANIZATIONS AND HUMAN CAPITAL • ECOLOGY • GREEN •• BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • DEPOT • HUMAN CAPITAL MANAGEMENT • OPERATIONS • • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • OPERATIONS • • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDS • • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OF •• OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS • ORGANIZATIONAL ANALYSIS • COMPETENCY MODELING • • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL •• MANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT •• MAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH •• RECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • • CONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS • • COMPETENCY MODELING • STAFFING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PREPOSITIONED ASSETS • • ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • • LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT •• MAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH •• RECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • • CONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS • • COMPETENCY MODELING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • • ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • • LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • • MODERNIZATION • DEPOT MAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION •• ASSURANCE • ELECTRONIC HEALTH RECORDS • IMPROVED VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• • CHANGE MANAGEMENT • CONTINUITY OF OPERATIONS • STAFFING • PUBLIC MANAGEMENT NETWORKS AND •• ORGANIZATIONAL ANALYSIS • COMPETENCY MODELING • LEADERSHIP DEVELOPMENT • EXECUTIVE COACHING • • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • ISO 9001 • BUSINESS •• PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • PREPOSITIONED ASSETS • • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • INFORMATION SYSTEMS • INTELLIGENCE •• PROGRAMS • INFORMATION ASSURANCE • ELECTRON• HEALTH RECORDS • IMPROVED VETERANʼS HEALTH CARE • • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OF OPERATIONS • STAFFING • PUBLIC •• MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS • COMPETENCY MODELING • LEADERSHIP DEVELOPMENT • • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENT • GREEN BUILDINGS • • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENT • OPERATIONS • • PREPOSITIONED ASSETS • SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • INFORMATION •• SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDS • IMPROVED •• VETERANʼS HEALTH CARE • INCREASED EFFICIENCY • ENERGY• CHANGE MANAGEMENT • CONTINUITY OF OPERATIONS • • STAFFING • PUBLIC MANAGEMENT NETWORKS AND ORGANIZATIONAL ANALYSIS COMPETENCY MODELING • LEADERSHIP •• DEVELOPMENT • EXECUTIVE COACHING • PERFORMANCE MANAGEMENT • ECOLOGY • ACQUISITION • ENVIRONMENT • • GREEN BUILDINGS • ISO 9001 • BUSINESS PROCESS REENGINEERING • LOGISTICS • HUMAN CAPITAL MANAGEMENT • • OPERATIONS • PREPOSITIONED ASSETS •SUPPLY CHAIN INNOVATION • MODERNIZATION • DEPOT MAINTENANCE • • INFORMATION SYSTEMS • INTELLIGENCE PROGRAMS • INFORMATION ASSURANCE • ELECTRONIC HEALTH RECORDS •

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LMI 2008 Annual Report