BOOT CAMP 101

1. BOOT CAMP 101 • What is this marketplace? • How does it work? • Can my company play? • What are the major elements? • Who are the key players? John McNulty, Executive Director Research and Development Associates May 2013

2. Marketplace Size • Military: $ 5.0 billion • Government: $17.0 billion • Resale: $ 20.0 billion • Large enough to look at!

3. Market Components • Rations • Dining Hall Food Service • Commissaries and Exchanges

4. What Items Fit? • Long shelf life • Novel items • Popular items • Nutritional items • Adaptable items • Food, Equipment, Sanitation, Labor Saving, Value items

5. Main Military Organizations • The Military Services: Army, Marines, Navy, Air Force • Natick • Defense Logistics Agency • US Army Public Health Command • USDA • DECA/AAFES/ etc

6. Purpose of Session To provide you with an understanding of how the government does business in food, packaging, and related areas

7. Rations and Feeding of Military • Rations are individual and group • Most military meals are served in cafeteria type settings • War Zone feeding is a special situation • US support to cafeterias is by a commercial food distributor (Subsistence Prime Vendor) • The military services are the CUSTOMER

8. Approve all food & services Verify quality Visit users to assess Usually first place to start Provide funding NO ACTION IF THEY DISAPPROVE Military ServicesArmy, AF, USMC, Navy

9. Military Services • Army: • Joint Culinary Center of Excellence Fort Lee , VA • USMC: • HQ USMC Pentagon Washington, DC

10. Military Services • US Air Force • US Air Force Services Agency San Antonio, TX • US Navy • NAVSUP Mechanicsburg, VA

11. Natick: Soldier Systems Center • Conducts scientific studies • Verify contents of food • Establish many specifications • Technical experts for services • Program managers THEIR CONCURRENCE IS ESSENTIAL ON MOST ITEMS

12. NATICK • U.S. Army Natick Soldier RD&E Center Natick, MA

13. DLA Troop Support • Buying agents for DoD (all services) • Rations • Prime Vendor • Direct Buys (reducing) • Almost all contracting goes through DLA • Executive Agent for Food

14. Defense Logistics Agency-Troop Support • DLA Troop Support Philadelphia, PA

15. US Army Public Health Command • Quality is their main purpose in food • Inspect on site • Operate evaluation laboratories • Check items against specifications • On site at ration producers • Keep detailed records of all key food items • Inspect establishments to supply DoD • RECOMMEND ONLY

16. USAPHC • HQs US Army Public Health Command Aberdeen Proving Grounds, MD

17. USDA • Key player in rations • Affects specifications • Required on-site at some locations • Accept or reject items offered to government in some situations • Keep historical data • Can shut down manufacturers • Ensures compliance with legal requirements

18. USDA • Agricultural Marketing Service/DCIS Washington, DC

19. FOOD SYSTEMS • RATIONS • SUBSISTENCE PRIME VENDOR • COMMISSARY • EXCHANGE

20. RATIONS • MREs, UGRs, HDR, etc. • Services indicate component items • Natick ensures items are compliant • Specifications are developed • Items are tested in lab and with military • DLA contracts assembly • Company delivers as DLA instructs

21. RATIONS CONSIDERATIONS • Buy America Act • Berry Amendment • Government Inspection and/or approval • Fulfills military needs • Warrior tested and approved

22. Key Elements • MRE: 3 year shelf life/3,600 calories a day/limited space/ war stopper item • UGR: Family of rations/varying shelf life/ feeds 50 meals at a time • Other Rations: Ration for every situation • GET SPECIFICATIONS/WORK WITH GOVERNMENT AND AN ASSEMBLER

23. Summary of Rations • See specifications • Menus and components approved by services • Assemblers are contract holders and can provide components from any supplier who has met specification as approved by the government.

24. SUBSISTENCE PRIME VENDOR • Background • Dining Halls get almost every item from company who wins an exclusive geographical contract with option years • Stocked items of the contract winner is basis of support. • Contractor evaluated annually by DLA • About $4-5 Billion annually

25. SPV CONTRACTS • CONUS DLA Awards/ reviews/ monitors Listed on website • OCONUS DLA Awards/ reviews/ monitors Master price agreement in 2012 awards???

26. KEY SPV ELEMENTS • Items mutually approved by services and SPV • Cost/ quality/number of similar items/ relationship with SPV • Difficult to get NEW items into system • Concentrate on large installations • Consider a broker to reduce cost; but some SPV do not accept brokers

27. SUMMARY OF SPV • Determine who has contracts (website) • Know services requirements: Cost per serving/ how selections are made • Meet with SPV • Remember that services are the real customer and best if services and SPV agree • You have no contract with the government

28. COMMISSARIES • Military retail food stores • $6 Billion in sales • Brand name items and bulk items • HQ in Ft Lee, VA (DECA) • Very specific in procedures • Too expensive without broker

29. Commissary Operations • 15th largest food retailer • 250 stores worldwide • Brand name products/ with documented sales history • Very specific procedures • Use of a broker is most effective method to get placed and operate

30. Commissary Summary • Big business • DECA: Fort Lee, VA • Large orders • Very bureaucratic • Broker is needed

31. EXCHANGE SERVICES • Military “Wal-Mart type” operations • Four Exchange services: AAFES/Navy/ Marines/CG • Over $14 billion in sales • Bureaucratic procedures and extremely competitive

32. Exchange Operations • 530 Stores • Demand pricing equal to best customers • Large volume of sales per outlet • CONUS & OCONUS operations • Broker is best method

33. Exchange Summary • Four locations and systems • Must meet all item selection models • Use of broker essential

34. SYSTEM EXAMPLES • MRE (meal, ready to eat) • UGR (unitized group ration) • PRIME VENDOR CONTRACTS • COMMISSARIES & EXCHANGES

35. Meal, Ready to Eat(MRE) Items • Start with services and Natick (program manager) • Understand shelf life, nutrition, and packaging requirements • Submit for consideration: Give reasons in writing and do so repeatedly • Submit exactly what you are to provide for evaluation

36. MRE: Continued • Items will be field tested and evaluated Three year shelf life @ 80 F • If high enough scores (hedonic scale), tested by Natick in field • Time from beginning to end is 18 months • THERE IS NO GUARANTY THAT YOUR ITEM WILL BE PRODUCED BY YOU

37. Unitized Group Ration (UGR): Complete meal for 50! • Army (JCCoE) & Natick are first steps • New menu/new item/alternate supplier • Calories/protein/cost/weight & cube • Shelf life • Samples essential for evaluation • Should partner with an assembler

38. UGR: Continued • Evaluations by Natick required • May need new national stock number • Can use an existing generic description (DLA Troop Support) • Must negotiate with assemblers • Price competition • Delivery on time • Large quantities in short time frame

39. Food Service Feeding Items • Cookies • Pasta • Meat Items • Drink Items • Shortening • Vegetables

40. Prime Vendor Operations • Annual contract with up to five one year options • Successful bidder gets exclusive contract for a geographical region • PV must discuss support with customers

41. Prime Vendor (Continued) • PV determines most items supplied but must meet needs of customers • Cost plus contract • Some set aside contracts

42. Selling To Dining Halls • Installation Food Advisor • Cost per serving • Comparison with current items • SPV coordination • Contract clauses

43. Commissaries & Exchanges • Types of items • Usual manufacturer requirements • Deliver daily • Stock shelves daily • Handle discrepancies

44. Commissary/Exchanges Continued • Brokers are best method • Already know structure and all key folks • Have ability to: • handle orders • stock shelves • process payment to DFAS • do it all

45. QUESTIONS ?????? THIS IS A GOOD TIME TO ASK QUESTIONS!!!

46. CONCLUSIONS • The government marketplace is different but understandable • Get to know where your products fit • Get to the right people • Ask questions • Network • When in doubt: Ask