DRI (Diminishing Manufacturing Sources And Material Shortages)

What is DRI (Diminishing Manufacturing Sources And Material Shortages)?

Diminishing Manufacturing Sources and Material Shortages (DRI) represents a significant risk to government contracts, particularly those involving long-term support or complex systems. DRI occurs when the original manufacturer or supplier of a component, material, or technology either discontinues production or is no longer available, potentially leading to shortages and increased costs. This can severely impact a contractor's ability to fulfill its contractual obligations and maintain system readiness.

Definition

DRI refers to the situation where sources of supply for parts, materials, or technologies are dwindling or ceasing to exist. This can happen due to various reasons, including obsolescence, low demand, changes in regulations, or shifts in manufacturing priorities. DRI is particularly relevant in government contracting because many government systems have long lifecycles, often requiring support for decades. The FAR (Federal Acquisition Regulation) and agency-specific supplements often include clauses addressing obsolescence management and requiring contractors to proactively address potential DRI issues. Failure to adequately manage DRI can lead to significant cost overruns, delays, and reduced system performance.

Key Points

• Proactive Monitoring: Regularly monitor the availability and lifecycle of critical components and materials.
• Risk Assessment: Identify and assess potential DRI risks early in the acquisition lifecycle.
• Mitigation Planning: Develop and implement mitigation strategies to address potential DRI issues.
• Communication: Maintain open communication with government customers and suppliers regarding potential DRI risks.

Practical Examples

1. Radar System Upgrade: A contractor upgrading a radar system discovers that the original display units are no longer manufactured. They must find a suitable replacement or redesign the system to use a currently available display.
2. Aircraft Component Obsolescence: An aircraft manufacturer learns that a critical electronic component is becoming obsolete. They proactively purchase a lifetime supply of the component or develop a substitute component to avoid future shortages.
3. Specialized Material Shortage: A defense contractor requires a specialized alloy for manufacturing armored vehicles. The only supplier ceases production. The contractor must identify an alternative supplier or find a substitute material that meets performance requirements.