1. 1 Defense Logistics Agency Clothing and Textile Supply Chain Update March 16, 2007 Defense Logistics Agency

2. 2 Agenda Overview of Clothing and Textiles (C&T) Supply Chain Make up of the Industrial Base Investment Plan for FY 07 Recent Outreach Efforts Virtual Vendor Management ACU Update

3. 3 The Big Picture Customers / Items Customers: 14,000 Orders: 3,600,000 / year Items: 31,000 Sales FY 01 - $1.0B FY 02 - $1.3B FY 03 - $1.7B FY 04 - $2.2B FY 05 - $2.2B FY 06 - $1.9B Obligations FY 01 - $1.1B FY 02 - $1.6B FY 03 - $2.8B FY 04 - $2.0B FY 05 - $2.0B FY 06 - $1.6B Personnel Employees: 302 civilian + 8 Military + 2 Europe + 50 interns Suppliers: 858 Clothing & Textiles Supply Chain

4. 4  Sized items Example, Combat Boot – 133 sizes Men’s Army Dress Coat – 65 sizes Airman Battle Uniform – 155 sizes  Military unique Most clothing on a specification Service driven requirements Simple garments to complex protective clothing (Chem Suits)  Industrial Base – Strategic Supplier Issues Small Business driven Mandatory Sources National Industry for the Blind (NIB) National Industry for the Severely Handicapped (NISH) Federal Prisons (UNICOR) Socioeconomic Obligations (Hub Zones, 8(a), Set-Asides)  Best Value Long Term Contracts During peacetime, over 95% of our contracts are long term / best value contracts Clothing & Textiles A Unique Commodity Small Business $1011.24M Large $386.69M NIB $51.9M UNICOR $93.3M NISH $143.7M

5. 5 C&T Investment Plan FY07 By Major Grouping Expenditure History –FY 05 = $2.088B –FY 06 = $1.613B –FY 07 = $1.70 B (planned) –Anticipated that expenditures will level at $1.4B-$1.5B over the next 5 years Plan adjustments: –Based on actual sales –Customer collaborative forecasts –New item introductions FY07 Plan Dress Clothing$165.1M Field Clothing$492.9M Individual Equipment $581.6M Organizational Clothing $481.8M Total$1,721.4M Adjustments made thru the use of automated demand and supply tools

6. 6 C&T Investment Plan FY 07 By Minor Grouping Dress Uniforms –Shirts & Headwear $29.0M –Outerwear $76.5M –Dress Uniforms $59.9M Field Uniforms –Accessories $126.1M –Camo uniforms $239.6M –Footwear $127.2M Individual Equipment –Heraldics $9.4M –Equipment Items $305.9M –Safety Items $127.9M –Tentage $138.4M Organizational Clothing –Chemical Protective $189.8M –Cold Weather Gear $117.6M –Gloves $69.7M –Special Purpose $104.6M

7. 7 Meeting with Member Military Liaison Assistants 12 February 2007 Working Group partnering with American Apparel & Footwear Association (AAFA) –Recurring Meeting approximately every 60 days. –Objectives of the effort: An assessment of specific C&T industry skill sets in jeopardy The impact of those diminishing skills sets on the readiness Once assessments complete, a timeline and a path forward for preserving domestic production capability Summit with Industry and the Services to discuss requirements will convene in the next 60 days. Recent Outreach Efforts

8. 8 Continuing the Dialogue Potential topics include: –Timeliness of contract awards & delivery orders –Protection against uncontrollable cost increase in multiyear contract –IDIQ Min-Max ranges –Providing forecasts to Industry –Source Sampling and Shade Evaluation –Use of Supply Chain Manager –Review System for Better and Prompt Payment Options –Continued support of domestic manufacturing laws

9. 9 Virtual Prime Vendor (VPV) VPV is a logistics management system In operation since 1998 - excellent track record Establishing a new Virtual Vendor Manager (VVM) at each Recruit Center VPV Site RTC/CIIP Use chart 1 1MC San Diego 2MC Parris Island 3NTC Great Lakes 4Lackland AFB 5Ft. Jackson 6Ft. Sill 7Ft. Len Wood 8Ft. Knox 9Ft. Benning 1Lion Vallen – All Army 2Travis NIB – AF& MC 3Peckham NISH – Navy 1 2 3 2 3 4 5 6 78 9 Not shipped On time = No pay! * Chart Represents 35.5 Months Of Operation Travis VPV 8 DLA continues to manage contracts with C&T Industrial Base VPV Objective: Linking Supply and Demand