Zone 6 –8 - 9 Meeting Operations Update Mr. Bob Hayden Director, Performance and Policy Operations Update Mr. Bob Hayden Director, Performance and Policy

Directorate of Performance and Policy

Commissary Advanced Resale Transaction System Commissary Advanced Resale Transaction System CARTS Overview

4 Mission The CARTS program is a total system replacement of DeCA’s aging existing point-of-sale (POS) systems, including all commissaries, server centers, and test beds Acquisition Strategy Single-step to full operational capability One prime integrator of COTS/non-developmental items Performance-based contract with performance incentives Full and open competition Indefinite delivery/indefinite quantity contract 10-year contract (5-year base and five 1-year options) Strategic Partner CARTS Overview GOALS and OBJECTIVES Improve customer service - Keep pace with commercial industry Lower cost of ownership - Achieve high POS system availability -Improve business functionality Comply with DoD system mandates - Enhance security - Achieve flexible open system compliance

5 Benefits of Shelf Checkout % of Shoppers Survey conducted in 2006 by IDC Corp of 6,359 shoppers.

6 CARTS Solution Overview Self-Checkout

7 CARTS Solution Overview Non Checklane Hardware and Back Office Solution Components Hand-held Terminal Hand Scanner Data Entry Terminal Electronic Shelf Label Customer Price Check Station Back Office Printer Cash Management Portable Printer MK1100 QL320

8 (Store Front) Checklane Hardware CARTS Solution Overview Hand-held Scanner Receipt Printer Scanner / Scale Cashier Entry Device Customer Display Customer Access Terminal Check Stands GB SurePOS 742 Cash Register 4610-TG9

9 Deployment Schedule Criteria No installs on Federal holidays, paydays, peak sales periods Installs on lower sales volume days as much as possible (Mon/Tues/Wed) Commissaries open 7 days/wk will not close for install BRAC sites or closure scheduled at end of deployment No installs during holiday black-out period Thanksgiving / Christmas peak sales period Will provide training to all employees in advance of deployment

10 Recommendations for Success of SCO  Properly train our employees and patrons for self checkout  Monitor and manage self-checkout as part of front-end, use the registers in slow times front-end, use the registers in slow times  Must have full management by-in  Commit to using the self check outs as cashier driven during busy periods

11 DeCA Swell Allowance Program Update DeCA Swell Allowance Program Update

12 16 Companies in the program (listed on next slide) Letters sent to companies not participating or offers too low Will bring new companies on monthly as offers are accepted CAO will soon be able to track vendor throwaways along with store throwaways to validate percentages used in the swell allowances 16 Companies in the program (listed on next slide) Letters sent to companies not participating or offers too low Will bring new companies on monthly as offers are accepted CAO will soon be able to track vendor throwaways along with store throwaways to validate percentages used in the swell allowances Swell Allowance Program

13 Bavarian Meats Callard Bowser Suchard Inc Durex Jack and Jill JC Potter Jelly Belly Johnson & Johnson JTM Provisions Kelloggs Bavarian Meats Callard Bowser Suchard Inc Durex Jack and Jill JC Potter Jelly Belly Johnson & Johnson JTM Provisions Kelloggs Swell Allowance Program Nabisco Food Group Planters Nuts Nestle Novartis Performance Seed Picsweet Rivianna Roger Wood Foods Seattle Fish Nabisco Food Group Planters Nuts Nestle Novartis Performance Seed Picsweet Rivianna Roger Wood Foods Seattle Fish Companies Participating as of January 1, 2007

14 Exclusions to the program: Price Reductions – items reduced voluntarily by the vendor in order to promote the sale of products or short dated items reduced for quick sale Returned Merchandise – products in good condition voluntarily returned to the vendor at their request and/or items donated by a vendor to other organizations on military installations Guaranteed Sale Items – items that do not sell and are not unsaleable; items that do not sell within a specific period of time, such as holiday or seasonal items and promotional items, and items that are under a specific buy-back agreement Voluntary Recall/ALFOODACT – medical recalls Distributor VCMs – shortages, mis-picks, etc. Product Demonstrations Manufacturer Deletes Exclusions to the program: Price Reductions – items reduced voluntarily by the vendor in order to promote the sale of products or short dated items reduced for quick sale Returned Merchandise – products in good condition voluntarily returned to the vendor at their request and/or items donated by a vendor to other organizations on military installations Guaranteed Sale Items – items that do not sell and are not unsaleable; items that do not sell within a specific period of time, such as holiday or seasonal items and promotional items, and items that are under a specific buy-back agreement Voluntary Recall/ALFOODACT – medical recalls Distributor VCMs – shortages, mis-picks, etc. Product Demonstrations Manufacturer Deletes Swell Allowance Program

15 Swell Allowance Program Stores still have latitude to flush out deleted items, close dated items or agreed upon distressed purchases from manufacturers with manual VCMs under mutual agreements or requests from the manufacturer Companies are still responsible for close-dated merchandise Ensure store staff and vendor stockers are handling product properly and watching for close- dated items Stores still have latitude to flush out deleted items, close dated items or agreed upon distressed purchases from manufacturers with manual VCMs under mutual agreements or requests from the manufacturer Companies are still responsible for close-dated merchandise Ensure store staff and vendor stockers are handling product properly and watching for close- dated items

16 INFRASTRUCTURE UPDATE

17 Surcharge Funded SRM Programs Facility maintenance and repair includes — — Recurring M&R funds for projects > $150K — — Inter Service Support Agreement costs — — M&R for the overall sustainment and major construction program including prior year contract M&R modifications, and unprogrammed M&R requirements Refrigeration equipment maintenance and repair is the refrigeration and heating, ventilation and air conditioning contracts managed by the regions Refrigeration replacement includes: — — Contractor and Government furnished equipment costs associated with current year sustainment projects — — Prior year contract equipment modifications and unprogrammed equipment requirements Facility maintenance and repair includes — — Recurring M&R funds for projects > $150K — — Inter Service Support Agreement costs — — M&R for the overall sustainment and major construction program including prior year contract M&R modifications, and unprogrammed M&R requirements Refrigeration equipment maintenance and repair is the refrigeration and heating, ventilation and air conditioning contracts managed by the regions Refrigeration replacement includes: — — Contractor and Government furnished equipment costs associated with current year sustainment projects — — Prior year contract equipment modifications and unprogrammed equipment requirements

18 Surcharge Funded SRM Programs Continued Minor construction includes projects under $750K and include design and construction costs associated with current year sustainment projects, prior year contract modifications, and unprogrammed construction requirements and future design The energy & environmental component includes projects to improve energy consumption and reduce environmental impacts Major construction includes costs of $750K or more and require reporting to Congress. Costs include design, construction, equipment, prior year contract modifications, AETC salaries and PMAC contract costs Minor construction includes projects under $750K and include design and construction costs associated with current year sustainment projects, prior year contract modifications, and unprogrammed construction requirements and future design The energy & environmental component includes projects to improve energy consumption and reduce environmental impacts Major construction includes costs of $750K or more and require reporting to Congress. Costs include design, construction, equipment, prior year contract modifications, AETC salaries and PMAC contract costs

19 DeCA Surcharge Investment Plan ($ In Millions)

20 Surcharge Funded SRM Programs $102M Obligated FY2006FY2007 $232M Programmed FY2008 $176M Programmed

21 Management Challenges Funding — — Budget Shifting emphasis to sustainment reduces number of major projects Non-construction programs competing for Surcharge reduces available funding Info Technology Programs Operational Equipment Programs Lack of BRAC funding — — Higher construction cost trends Higher costs impact project approval levels/execution timelines Reduces program Funding — — Budget Shifting emphasis to sustainment reduces number of major projects Non-construction programs competing for Surcharge reduces available funding Info Technology Programs Operational Equipment Programs Lack of BRAC funding — — Higher construction cost trends Higher costs impact project approval levels/execution timelines Reduces program

22 Management Challenges Planning/Programming/Execution – –Basing initiatives OIGPBS - 6 locations impacted; Ramstein, Spangdahlem, Ansbach, Wiesbaden, Vilseck, VicenzaOIGPBS - 6 locations impacted; Ramstein, Spangdahlem, Ansbach, Wiesbaden, Vilseck, Vicenza –Total Cost $92.9 M OIGPBS Impact $77.6 M BRAC - 10 locations impacted; Fort Bliss, Fort Riley, China Lake, Fort Benning, Fort Carson, Fort Lee, Norfolk, Fort Sam Houston, Moody AFB, Fort BelvoirBRAC - 10 locations impacted; Fort Bliss, Fort Riley, China Lake, Fort Benning, Fort Carson, Fort Lee, Norfolk, Fort Sam Houston, Moody AFB, Fort Belvoir –Total Cost $189.2 M BRAC Impact $143.9 M Lack of OIGPBS/BRAC funding disrupted the normal prioritization processLack of OIGPBS/BRAC funding disrupted the normal prioritization process Requires a shift towards more facility sustainmentRequires a shift towards more facility sustainment Planning/Programming/Execution – –Basing initiatives OIGPBS - 6 locations impacted; Ramstein, Spangdahlem, Ansbach, Wiesbaden, Vilseck, VicenzaOIGPBS - 6 locations impacted; Ramstein, Spangdahlem, Ansbach, Wiesbaden, Vilseck, Vicenza –Total Cost $92.9 M OIGPBS Impact $77.6 M BRAC - 10 locations impacted; Fort Bliss, Fort Riley, China Lake, Fort Benning, Fort Carson, Fort Lee, Norfolk, Fort Sam Houston, Moody AFB, Fort BelvoirBRAC - 10 locations impacted; Fort Bliss, Fort Riley, China Lake, Fort Benning, Fort Carson, Fort Lee, Norfolk, Fort Sam Houston, Moody AFB, Fort Belvoir –Total Cost $189.2 M BRAC Impact $143.9 M Lack of OIGPBS/BRAC funding disrupted the normal prioritization processLack of OIGPBS/BRAC funding disrupted the normal prioritization process Requires a shift towards more facility sustainmentRequires a shift towards more facility sustainment

23 Ongoing HQ Projects All Zones Roofs – –TREMCO is currently the contractor for this service with one 800 phone number to call if a covered store has a roof leak ( TREMCO). FY06 Major Maintenance and Repair Projects (>$150K) Handled through HQ DOF Maintenance and Repair Projects (<$150K) – –Handled through Field Engineers (FE) and re-occurring work orders at store level Major Construction Project – –Handled through DeCA’s San Antonio Engineers Roofs – –TREMCO is currently the contractor for this service with one 800 phone number to call if a covered store has a roof leak ( TREMCO). FY06 Major Maintenance and Repair Projects (>$150K) Handled through HQ DOF Maintenance and Repair Projects (<$150K) – –Handled through Field Engineers (FE) and re-occurring work orders at store level Major Construction Project – –Handled through DeCA’s San Antonio Engineers

24 Major Construction Projects Completed FY2006/FY2007 Cost FYLocationScope $M Completed 03Osan AB/ CDCUpgrade14.1Oct 05 04Whiteman AFBUpgrade7.2Oct 05 04Randolph AFBUpgrade12.2Feb 06 04Bangor NSBUpgrade13.6Mar 06 04Fort SillUpgrade12.9Sep 06 04Mayport NSUpgrade12.7 Oct 06 05NS San DiegoReplace32.6Dec 06 05Camp ZamaConversion3.9Feb 07 06Ft McCoyReplace5.2Apr 07 Total114.4

25 Major Construction Projects Under Construction Scope CWE Expected FYLocation M2 $M Completion 04Ft Detrick (Replace) 3, Jan 08 05Peterson AFB (Replace/Joint) 9, Mar 07 05Grafenwoehr (Replace/Joint) 5, Jun 07 05Rota NAS (Replace/Joint) 5, Sep 07 06Harrison Village (Replace/Joint) 4, Apr 07 06Barksdale AFB (Upgrade) 8, Apr 08 06Keesler AFB (Replace/Joint) 8, Jun 09 Total 44,709 $122.0

26 FY 2007 Major Construction Program Scope PA CWE Scheduled Scope PA CWE Scheduled Location M 2 $M $M Award Robins AFB (Replace) 1 7, May 2007 Dyess AFB (Upgrade) 1 6, Jul 2007 Ft Drum (Upgrade) 1 7, Jun 2007 Richards- Gebaur (New) 1 1, Jul 2007 Keesler AFB (Replace/Joint) 2 9, Awarded Willow Grove 3 (New/Joint)2, On Hold Saratoga Springs (Replace)2, Aug 2007 Livorno (Replace)2, Sep 2007 Chievres (Replace)4, Sep 2007 Eglin AFB (Upgrade)10, Jul 2007 Total51,715 $144.2 $ Approved in FY 2007 Construction Report for Cost Increase 2Funded with Hurricane Katrina Recovery Funds 3Funds withdrawn and reprogrammed. Placed on hold per Congressional guidance

27 FY 2008 Major Construction Program Scope PA CWE Scope PA CWE Location M 2 $M $M New Orleans (Replace/Joint) 4, Ft Riley (Upgrade) 1 10, Ft Bliss (Replace) 1 10, Total 25,635 $74.4 $74.4 1Requirement is 100% BRAC generated. No BRAC funding has been provided which will disrupt normal construction priority process. Costs recently revised based on A/E cost estimates.

28 FY 2009 Major Construction Program Initial Initial Scope Estimate Scope Estimate Location M 2 $M Ramstein AB (Upgrade) 1 7, Spangdahlem (Replace/Joint) 1 4, Ansbach (Replace/Joint) 1 3, Total15,462 $ OIGSPBS impacted

29 Ongoing Region Projects – Zone 6 FY07 Region Construction Projects in Design/Progress – –Randolph AFB Replace fir pump controller circuit board – –Dyess AFB Replace air conditioning system in the Admin area FY07 Region Construction Projects in Design/Progress – –Randolph AFB Replace fir pump controller circuit board – –Dyess AFB Replace air conditioning system in the Admin area

30 FY07 Region Construction Projects in Design/Progress – –Tinker AFB Extend exterior storage and canopy – –Fort Bliss Replace main switchgear Misc. refrigeration repairs FY07 Region Construction Projects in Design/Progress – –Tinker AFB Extend exterior storage and canopy – –Fort Bliss Replace main switchgear Misc. refrigeration repairs Ongoing Region Projects – Zone 8

31 FY07 Region Construction Projects in Design/Progress – –Holloman AFB Replace air conditioning unit and warehouse coolers Paint entry area, hallways, and replace floor tile behind the meat cases FY07 Region Construction Projects in Design/Progress – –Holloman AFB Replace air conditioning unit and warehouse coolers Paint entry area, hallways, and replace floor tile behind the meat cases Ongoing Region Projects – Zone 8

32 Ongoing Region Projects – Zone 9 FY07 Region Construction Projects in Design/Progress – –Buckley AFB Extend exterior storage and new canopy (Increase in funds to complete project) Repair sidewalk where sinking and buckling – –F.E. Warren Replace traffic doors in frozen food/dairy Anti Terrorists Force Protection requires relocation of dumpster FY07 Region Construction Projects in Design/Progress – –Buckley AFB Extend exterior storage and new canopy (Increase in funds to complete project) Repair sidewalk where sinking and buckling – –F.E. Warren Replace traffic doors in frozen food/dairy Anti Terrorists Force Protection requires relocation of dumpster

33 Ongoing Region Projects – Zone 9 FY07 Region Construction Projects in Design/Progress – –Fort Carson Replace meat processing floor (increase in funds to complete the project) Unforeseen site conditions for meat processing floor (modification) – –Fort Leavenworth Replace freezer door and repair case ventilation Install rotisserie oven and exhaust hood FY07 Region Construction Projects in Design/Progress – –Fort Carson Replace meat processing floor (increase in funds to complete the project) Unforeseen site conditions for meat processing floor (modification) – –Fort Leavenworth Replace freezer door and repair case ventilation Install rotisserie oven and exhaust hood

34 Ongoing Region Projects – Zone 9 FY07 Region Construction Projects in Design/Progress – –Minot AFB Replace Sales floor – –Offutt AFB Replace 4 receiving doors and 2 dock levelers FY07 Region Construction Projects in Design/Progress – –Minot AFB Replace Sales floor – –Offutt AFB Replace 4 receiving doors and 2 dock levelers

35 Energy & Environmental Program ( FY 2006 Energy Profile)

36 Energy & Environmental Program ( Energy Cost Comparison)

37 Energy & Environmental Program ( Energy Cost Comparison)

38 Energy & Environmental Program (Environmental Management System) DeCA’s EMS is a managed process that controls our response to environmental issues to improve DeCA’s use of funds and environmental footprint at each of our facilities. It consists of five elements:DeCA’s EMS is a managed process that controls our response to environmental issues to improve DeCA’s use of funds and environmental footprint at each of our facilities. It consists of five elements: –Policy –Planning –Implementation and Operation –Checking and –Management Review.

39 Energy & Environmental Program (DeCA's’ Significant Environmental Aspects) Environmental aspect - An element of an organization’s activities products or services that can interact with the environment.Environmental aspect - An element of an organization’s activities products or services that can interact with the environment. –Solid Waste Disposal Reduction and Recycling Enhancement –Energy and Water Conservation –Affirmative Procurement/Supplier Environmental Performance Packaging –Pesticide/Rodenticide Contracts –Sustainable Design in New Construction and Renovation –Toxic Materials Management –Refrigeration Maintenance

40 Energy & Environmental Program (Environmental Management System) CY 2006 EMS Accomplishments:CY 2006 EMS Accomplishments: –EMS Awareness Video Developed –7 Significant Environmental Aspects identified –6 of 7 Environmental Management Programs adopted –Legal Registry and Compliance Evaluation –EMS News Release –Secretary of Defense Environmental Award –Federal Environmental Executive compliments EMS –EMS Audit shows improvement

41 Energy & Environmental Program (Environmental Management System) EMS Scope of Work for 2007:EMS Scope of Work for 2007: –Address 2006 EMS Audit Findings & Recommendations –Environmental Policy & EMS Awareness –EMS Organizational Structure, Roles, and Responsibilities –EMPs – Competency and Training –Revision & Implementation of Emergency Response Procedure –Revision and Implementation of Other DeCA EMS Procedures

42 Energy & Environmental Program

43 Energy & Environmental Program

44 Energy & Environmental Program

45 Energy & Environmental Program

46 Equipment Branch Update

47 Minimize store involvement in the equipment ordering process to the maximum extent possible DeCA WEST Push Package Completed 12-Year Equipment Purchase Schedule, based on store class, workload, and equipment life cycle Push plan is a living document: out of cycles, annual store review, DOLM site visits each 3 – 5 years Minimize store involvement in the equipment ordering process to the maximum extent possible DeCA WEST Push Package Completed 12-Year Equipment Purchase Schedule, based on store class, workload, and equipment life cycle Push plan is a living document: out of cycles, annual store review, DOLM site visits each 3 – 5 years EQUIPMENT BRANCH (BUYING)

48 EQUIPMENT BRANCH (BUYING) Ten stores per year for replacement by departments: gondola shelving, bakery, furniture, warehouse, etc. DeCA DOLM will budget for equipment DOLM is responsible for the DeCA vehicle and Voyager Fuel Card Programs Paging/Music system & CCTV system site survey Ten stores per year for replacement by departments: gondola shelving, bakery, furniture, warehouse, etc. DeCA DOLM will budget for equipment DOLM is responsible for the DeCA vehicle and Voyager Fuel Card Programs Paging/Music system & CCTV system site survey

49 EQUIPMENT BRANCH (MAINT) DOLM is now active as the single point of contact for maintenance issues for operational equipment normally provided by this branch DOLM will review maintenance needs for cost effectiveness and repair/replace decision. Requirements will be input or passed for action by DOLM DOLM now responsible for the $28,000,000 DeCA surcharge equipment maintenance budget. Tasked to review all maintenance requirements for cost effectiveness DOLM is now active as the single point of contact for maintenance issues for operational equipment normally provided by this branch DOLM will review maintenance needs for cost effectiveness and repair/replace decision. Requirements will be input or passed for action by DOLM DOLM now responsible for the $28,000,000 DeCA surcharge equipment maintenance budget. Tasked to review all maintenance requirements for cost effectiveness

50 EQUIPMENT BRANCH (MAINT continued) Manage ACED, Automated Commissary Equipment Description Web Site DOLM to update the 450+ Commissary Equipment Descriptions (CEDs) in 2007 DOLM coordinates GF/GI Equipment and specifications for construction projects Manage ACED, Automated Commissary Equipment Description Web Site DOLM to update the 450+ Commissary Equipment Descriptions (CEDs) in 2007 DOLM coordinates GF/GI Equipment and specifications for construction projects

51 Questions?