BOOT CAMP 101 What is this marketplace

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 Mc. Nulty, Executive Director Research and Development Associates May 22, 2017

Marketplace Size • Military: • Government: • Resale: $ 7. 0 billion $ 10. 0 billion $ 20. 0 billion • Large enough to look at!

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

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

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

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

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

Military Services • US Air Force • US Navy • US Air Force Services Agency • NAVSUP Ft. Sam Houston, TX Mechanicsburg, VA

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

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

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

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

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 Do. D • RECOMMEND ONLY

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

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

USDA • Agricultural Marketing Service/DCIS Washington, DC

FOOD SYSTEMS • • RATIONS SUBSISTENCE PRIME VENDOR COMMISSARY EXCHANGE

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

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

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

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.

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

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

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

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

Commissary Operations • 15 th largest food retailer • 263 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

Commissary Summary • • Big business DECA: Fort Lee, VA Large order Broker is needed

EXCHANGE SERVICES • Military “Wal-Mart type” operations • Four Exchange services: AAFES/Navy/ Marines/CG • Over $ 15 billion in sales • Bureaucratic procedures and extremely competitive

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

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

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

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

Unitized Group Ration (UGR): Complete meal for 50! • • • Army (JCCo. E) & 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

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

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

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

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

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

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

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

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

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