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 2008 ANNUAL REPORT IN A TIME OF CHANGE INNOVATION
In 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.
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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
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
3LMI 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.
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
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.
4 LMI 2008 ANNUAL REPORT
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-
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.)
6 LMI 2008 ANNUAL REPORT
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
7LMI 2008 ANNUAL REPORT
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.
8 LMI 2008 ANNUAL REPORT
� 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.
9LMI 2008 ANNUAL REPORT
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.
10 LMI 2008 ANNUAL REPORT
� 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
11LMI 2008 ANNUAL REPORT
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
12 LMI 2008 ANNUAL REPORT
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
13LMI 2008 ANNUAL REPORT
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.
14 LMI 2008 ANNUAL REPORT
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.
15LMI 2008 ANNUAL REPORT
16 LMI 2008 ANNUAL REPORT
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
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.
30 LMI 2008 ANNUAL REPORT
31LMI 2008 ANNUAL REPORT
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.
32 LMI 2008 ANNUAL REPORT
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.
33LMI 2008 ANNUAL REPORT
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
34 LMI 2008 ANNUAL REPORT
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
35LMI 2008 ANNUAL REPORT
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.