BOOT CAMP 101BOOT CAMP 101

What is this marketplace?What is this marketplace?How does it work?How does it work?Can my company play?Can my company play?What are the major elements?What are the major elements?Who are the key players?Who are the key players?

John McNulty, Executive DirectorJohn McNulty, Executive DirectorResearch and Development AssociatesResearch and Development Associates

May 2013May 2013

Marketplace SizeMarketplace Size

Military:Military: $ 5.0 billion$ 5.0 billion

Government:Government: $17.0 billion$17.0 billion

Resale:Resale: $ 20.0 billion$ 20.0 billion

Large enough to look at!Large enough to look at!

Market ComponentsMarket Components

RationsRations

Dining Hall Food ServiceDining Hall Food Service

Commissaries and ExchangesCommissaries and Exchanges

What Items Fit?What Items Fit?

Long shelf life Long shelf life

Novel items Novel items

Popular itemsPopular items

Nutritional itemsNutritional items

Adaptable itemsAdaptable items

Food, Equipment, Sanitation, Labor Food, Equipment, Sanitation, Labor Saving, Value itemsSaving, Value items

Main Military OrganizationsMain Military Organizations

The Military Services: Army, Marines, Navy,The Military Services: Army, Marines, Navy,

Air ForceAir Force

NatickNatick

Defense Logistics AgencyDefense Logistics Agency

US Army Public Health CommandUS Army Public Health Command

USDAUSDA

DECA/AAFES/ etcDECA/AAFES/ etc

Purpose of SessionPurpose of Session

To provide you with an To provide you with an understanding of how the understanding of how the

government does business in government does business in food, packaging, andfood, packaging, and

related areasrelated areas

Rations and Feeding of MilitaryRations and Feeding of Military

Rations are individual and groupRations are individual and group

Most military meals are served in cafeteria Most military meals are served in cafeteria type settingstype settings

War Zone feeding is a special situationWar Zone feeding is a special situation

US support to cafeterias is by a US support to cafeterias is by a commercial food distributor (Subsistence commercial food distributor (Subsistence Prime Vendor)Prime Vendor)

The military services are the CUSTOMER The military services are the CUSTOMER

Military ServicesMilitary ServicesArmy, AF, USMC, NavyArmy, AF, USMC, Navy

Approve all food & servicesApprove all food & services

Verify qualityVerify quality

Visit users to assessVisit users to assess

Usually first place to startUsually first place to start

Provide fundingProvide funding

NO ACTION IF THEY DISAPPROVENO ACTION IF THEY DISAPPROVE

Military ServicesMilitary Services

Army:Army:

Joint Culinary Center Joint Culinary Center of Excellence of Excellence Fort Lee , VAFort Lee , VA

USMC:USMC:

HQ USMC HQ USMC Pentagon Pentagon Washington, DCWashington, DC

Military ServicesMilitary Services

US Air ForceUS Air Force

US Air Force Services US Air Force Services Agency Agency San Antonio, TXSan Antonio, TX

US NavyUS Navy

NAVSUP NAVSUP Mechanicsburg, VAMechanicsburg, VA

Natick: Soldier Systems CenterNatick: Soldier Systems Center

Conducts scientific studiesConducts scientific studies

Verify contents of foodVerify contents of food

Establish many specificationsEstablish many specifications

Technical experts for servicesTechnical experts for services

Program managersProgram managers

THEIR CONCURRENCE IS ESSENTIAL THEIR CONCURRENCE IS ESSENTIAL ON MOST ITEMSON MOST ITEMS

NATICKNATICK

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

DLA Troop SupportDLA Troop Support

Buying agents for DoD (all services)Buying agents for DoD (all services)– RationsRations– Prime VendorPrime Vendor– Direct Buys (reducing)Direct Buys (reducing)– Almost all contracting goes through DLAAlmost all contracting goes through DLA

Executive Agent for Food Executive Agent for Food

Defense Logistics Agency-Defense Logistics Agency-Troop SupportTroop Support

DLA Troop Support DLA Troop Support Philadelphia, PAPhiladelphia, PA

US Army Public Health US Army Public Health CommandCommand

Quality is their main purpose in foodQuality is their main purpose in food– Inspect on siteInspect on site– Operate evaluation laboratoriesOperate evaluation laboratories– Check items against specificationsCheck items against specifications– On site at ration producersOn site at ration producers

Keep detailed records of all key food itemsKeep detailed records of all key food items

Inspect establishments to supply DoDInspect establishments to supply DoD

RECOMMEND ONLYRECOMMEND ONLY

USAPHCUSAPHC

HQs US Army Public Health Command HQs US Army Public Health Command Aberdeen Proving Grounds, MDAberdeen Proving Grounds, MD

USDAUSDA

Key player in rationsKey player in rations– Affects specificationsAffects specifications– Required on-site at some locationsRequired on-site at some locations– Accept or reject items offered to government in Accept or reject items offered to government in

some situationssome situations– Keep historical dataKeep historical data– Can shut down manufacturersCan shut down manufacturers

Ensures compliance with legal requirementsEnsures compliance with legal requirements

USDAUSDA

Agricultural Marketing Service/DCIS Agricultural Marketing Service/DCIS Washington, DCWashington, DC

FOOD SYSTEMSFOOD SYSTEMS

RATIONSRATIONS

SUBSISTENCE PRIME VENDORSUBSISTENCE PRIME VENDOR

COMMISSARYCOMMISSARY

EXCHANGEEXCHANGE

RATIONSRATIONS

MREs, UGRs, HDR, etc.MREs, UGRs, HDR, etc.

Services indicate component itemsServices indicate component items

Natick ensures items are compliant Natick ensures items are compliant

Specifications are developedSpecifications are developed

Items are tested in lab and with militaryItems are tested in lab and with military

DLA contracts assemblyDLA contracts assembly

Company delivers as DLA instructsCompany delivers as DLA instructs

RATIONS CONSIDERATIONSRATIONS CONSIDERATIONS

Buy America ActBuy America Act

Berry AmendmentBerry Amendment

Government Inspection and/or approvalGovernment Inspection and/or approval

Fulfills military needsFulfills military needs

Warrior tested and approvedWarrior tested and approved

Key ElementsKey Elements

MRE: 3 year shelf life/3,600 calories a MRE: 3 year shelf life/3,600 calories a day/limited space/ war stopper itemday/limited space/ war stopper item

UGR: Family of rations/varying shelf life/ UGR: Family of rations/varying shelf life/ feeds 50 meals at a timefeeds 50 meals at a time

Other Rations: Ration for every situationOther Rations: Ration for every situation

GET SPECIFICATIONS/WORK WITH GET SPECIFICATIONS/WORK WITH GOVERNMENT AND AN ASSEMBLERGOVERNMENT AND AN ASSEMBLER

Summary of RationsSummary of Rations

See specificationsSee specifications

Menus and components approved by Menus and components approved by servicesservices

Assemblers are contract holders and can Assemblers are contract holders and can provide components from any supplier provide components from any supplier who has met specification as approved by who has met specification as approved by the government.the government.

SUBSISTENCE PRIME SUBSISTENCE PRIME VENDORVENDOR

BackgroundBackground

Dining Halls get almost every item from Dining Halls get almost every item from company who wins an exclusive company who wins an exclusive geographical contract with option yearsgeographical contract with option years

Stocked items of the contract winner is Stocked items of the contract winner is basis of support.basis of support.

Contractor evaluated annually by DLAContractor evaluated annually by DLA

About $4-5 Billion annuallyAbout $4-5 Billion annually

SPV CONTRACTSSPV CONTRACTS

CONUSCONUS

DLA Awards/ reviews/ monitorsDLA Awards/ reviews/ monitors

Listed on websiteListed on website

OCONUSOCONUS

DLA Awards/ reviews/ monitorsDLA Awards/ reviews/ monitors

Master price agreement in 2012 Master price agreement in 2012 awards???awards???

KEY SPV ELEMENTSKEY SPV ELEMENTS

Items mutually approved by services and Items mutually approved by services and SPVSPV

Cost/ quality/number of similar items/ Cost/ quality/number of similar items/ relationship with SPVrelationship with SPV

Difficult to get NEW items into systemDifficult to get NEW items into system

Concentrate on large installationsConcentrate on large installations

Consider a broker to reduce cost; but Consider a broker to reduce cost; but some SPV do not accept brokerssome SPV do not accept brokers

SUMMARY OF SPVSUMMARY OF SPVDetermine who has contracts (website)Determine who has contracts (website)

Know services requirements: Cost per Know services requirements: Cost per serving/ how selections are madeserving/ how selections are made

Meet with SPVMeet with SPV

Remember that services are the real Remember that services are the real customer and best if services and SPV customer and best if services and SPV agreeagree

You have no contract with the governmentYou have no contract with the government

COMMISSARIESCOMMISSARIES

Military retail food storesMilitary retail food stores

$6 Billion in sales$6 Billion in sales

Brand name items and bulk itemsBrand name items and bulk items

HQ in Ft Lee, VA (DECA)HQ in Ft Lee, VA (DECA)

Very specific in proceduresVery specific in procedures

Too expensive without brokerToo expensive without broker

Commissary OperationsCommissary Operations

1515thth largest food retailer largest food retailer

250 stores worldwide250 stores worldwide

Brand name products/ with documented Brand name products/ with documented sales historysales history

Very specific proceduresVery specific procedures

Use of a broker is most effective method Use of a broker is most effective method to get placed and operateto get placed and operate

Commissary SummaryCommissary Summary

Big businessBig business

DECA: Fort Lee, VADECA: Fort Lee, VA

Large ordersLarge orders

Very bureaucraticVery bureaucratic

Broker is neededBroker is needed

EXCHANGE SERVICESEXCHANGE SERVICES

Military “Wal-Mart type” operationsMilitary “Wal-Mart type” operations

Four Exchange services: AAFES/Navy/ Four Exchange services: AAFES/Navy/ Marines/CGMarines/CG

Over $14 billion in salesOver $14 billion in sales

Bureaucratic procedures and extremely Bureaucratic procedures and extremely competitive competitive

Exchange OperationsExchange Operations

530 Stores530 Stores

Demand pricing equal to best customersDemand pricing equal to best customers

Large volume of sales per outletLarge volume of sales per outlet

CONUS & OCONUS operationsCONUS & OCONUS operations

Broker is best methodBroker is best method

Exchange SummaryExchange Summary

Four locations and systemsFour locations and systems

Must meet all item selection modelsMust meet all item selection models

Use of broker essentialUse of broker essential

SYSTEM EXAMPLESSYSTEM EXAMPLES

MRE (meal, ready to eat)MRE (meal, ready to eat)

UGR (unitized group ration)UGR (unitized group ration)

PRIME VENDOR CONTRACTSPRIME VENDOR CONTRACTS

COMMISSARIES & EXCHANGESCOMMISSARIES & EXCHANGES

Meal, Ready to Eat(MRE) ItemsMeal, Ready to Eat(MRE) Items

Start with services and Natick (program Start with services and Natick (program manager)manager)

Understand shelf life, nutrition, and Understand shelf life, nutrition, and packaging requirementspackaging requirements

Submit for consideration: Give reasons in Submit for consideration: Give reasons in writing and do so repeatedlywriting and do so repeatedly

Submit exactly what you are to provide for Submit exactly what you are to provide for evaluationevaluation

MRE: ContinuedMRE: Continued

Items will be field tested and evaluated Items will be field tested and evaluated Three year shelf life @ 80 FThree year shelf life @ 80 F

If high enough scores (hedonic scale), If high enough scores (hedonic scale), tested by Natick in fieldtested by Natick in field

Time from beginning to end is 18 monthsTime from beginning to end is 18 months

THERE IS NO GUARANTY THAT YOUR THERE IS NO GUARANTY THAT YOUR ITEM WILL BE PRODUCED BY YOU ITEM WILL BE PRODUCED BY YOU

Unitized Group Ration (UGR): Unitized Group Ration (UGR): Complete meal for 50!Complete meal for 50!

Army (JCCoE) & Natick are first stepsArmy (JCCoE) & Natick are first steps

New menu/new item/alternate supplierNew menu/new item/alternate supplier

Calories/protein/cost/weight & cubeCalories/protein/cost/weight & cube

Shelf lifeShelf life

Samples essential for evaluationSamples essential for evaluation

Should partner with an assemblerShould partner with an assembler

UGR: ContinuedUGR: Continued

Evaluations by Natick requiredEvaluations by Natick required

May need new national stock numberMay need new national stock number– Can use an existing generic description (DLA Can use an existing generic description (DLA

Troop Support)Troop Support)

Must negotiate with assemblersMust negotiate with assemblers– Price competitionPrice competition– Delivery on timeDelivery on time– Large quantities in short time frameLarge quantities in short time frame

Food Service Feeding ItemsFood Service Feeding Items

CookiesCookies

PastaPasta

Meat ItemsMeat Items

Drink ItemsDrink Items

ShorteningShortening

VegetablesVegetables

Prime Vendor OperationsPrime Vendor Operations

Annual contract with up to five one year Annual contract with up to five one year optionsoptions

Successful bidder gets exclusive contract Successful bidder gets exclusive contract for a geographical regionfor a geographical region

PV must discuss support with customersPV must discuss support with customers

Prime Vendor (Continued)Prime Vendor (Continued)

PV determines most items supplied but PV determines most items supplied but must meet needs of customersmust meet needs of customers

Cost plus contractCost plus contract

Some set aside contractsSome set aside contracts

Selling To Dining HallsSelling To Dining Halls

Installation Food AdvisorInstallation Food Advisor

Cost per servingCost per serving

Comparison with current itemsComparison with current items

SPV coordinationSPV coordination

Contract clausesContract clauses

Commissaries & ExchangesCommissaries & Exchanges

Types of itemsTypes of items

Usual manufacturer requirementsUsual manufacturer requirements– Deliver dailyDeliver daily– Stock shelves dailyStock shelves daily– Handle discrepanciesHandle discrepancies

Commissary/Exchanges Commissary/Exchanges ContinuedContinued

Brokers are best methodBrokers are best method– Already know structure and all key folksAlready know structure and all key folks– Have ability to:Have ability to:

handle ordershandle orders

stock shelvesstock shelves

process payment to DFASprocess payment to DFAS

do it alldo it all

QUESTIONS ??????QUESTIONS ??????

THIS IS A THIS IS A

GOOD TIME TO GOOD TIME TO

ASK QUESTIONS!!!ASK QUESTIONS!!!

CONCLUSIONSCONCLUSIONS

The government marketplace is different The government marketplace is different

but understandablebut understandable

Get to know where your products fitGet to know where your products fit

Get to the right peopleGet to the right people

Ask questionsAsk questions

NetworkNetwork

When in doubt: AskWhen in doubt: Ask