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 Air ForceNatick 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. 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

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 COMMISSARYEXCHANGE

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 15 th 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 CookiesPasta Meat Items Drink Items ShorteningVegetables

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 but understandable Get to know where your products fit Get to the right people Ask questions Network When in doubt: Ask