Doing Business With the Military Main Organizations Food Systems Key Players Strategies James Fagan, Executive Director Research and Development Associates Fall 2009 Meeting

Main Military Organizations The Military Services: Army, Marines, Navy, Air Force Air ForceNatick Defense Supply Center Philadelphia (DSCP) VETCOMUSDA

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

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

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

DSCP Buying agents for DoD (all services) –Rations –Prime Vendor –Direct Buys (reducing) –Almost all contracting goes through DSCP Executive Agent for Food

VETCOM 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

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

FOOD SYSTEMS RATIONS PRIME VENDOR COMMISSARYEXCHANGE DIRECT CONTRACTS

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 DSCP contracts assembly Company delivers as DSCP instructs

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 DSCP About $2 -4 Billion annually

COMMISSARIES Military retail food stores $8 Billion in sales Brand name items and bulk items HQ in Ft Lee, VA (DECA) Very specific in procedures Too expensive without broker

EXCHANGE SERVICES Military “Wal-mart type” operations Three Exchange services: AAFES/ Navy/ Marines Over $17 billion in sales Bureaucratic procedures and extremely competitive

Direct Government Contracts USDAInstallations Any government agency Must get on bid list and comply with qualifications. Every agency has ability to buy direct

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 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 (ACES)& 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 (DSCP) Must negotiate with assemblers –Price competition –Delivery on time –Large quantities in short time frame

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 MASTER PRICE AGREEMENTS: OCONUS CONTRACTS!!!!

Commissaries & Exchanges Types of items Organizational Structure: –Headquarters –Regions –Individual stores 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

KEY PLAYERS GOVERNMENTINDUSTRYASSOCIATIONS

Key Government Players Military Services –Navy: CDR Dailey –USMC: LTC Sanabria –Army: LTC Barnes CW5 Jack Van Zanten CW5 Jack Van Zanten Dave Sherriff Rick Bryd –Air Force: George Miller

Key Players: VETCOM There will be a regional veterinary command in your area CW 2 Budd Dodge

Key Players: DSCP HQ:CAPT. Rackauskas HQ: Ray Miller & Rich Faso Rations: –Harry Streibich –Jim Lecollier

Prime Vendor Prime Vendor: –John Steenberge –Joe Hauser

Key Players: Natick HQ: Gerry Darsch Rations Program –Steve Moody –Judy Aylward –Sue Harrington Poly Tray: Bob Trottier Packaging: Peter Sherman Science: Dr. Pat Dunne Specifications: Ray Valvano

Natick Continued Others: –Betty Davis

INDUSTRY KEY PLAYERS MRE ASSEMBLERS: –AMERIQUAL –SOPAKCO –WORNICK UNITIZED GROUP RATIONS –LABATT FOOD SERVICE –AMERIQUAL / WORNICK

INDUSTRY CONTINUED PRIME VENDORS –LABATT FOOD SERVICE –US FOOD SERVICE –LANKFORD SYSCO –SYSCO –PYA MONARCH –** SEE DSCP WEBSITE(

ASSOCIATIONS R&DA

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

QUESTIONS THIS IS THE BEST TIME TO ASK A QUESTION!!!

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