boot camp 101 what is this marketplace? how does it work? can my company play? what are the major...
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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
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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!
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Market ComponentsMarket Components
RationsRations
Dining Hall Food ServiceDining Hall Food Service
Commissaries and ExchangesCommissaries and Exchanges
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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
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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
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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
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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
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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
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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
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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
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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
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NATICKNATICK
U.S. Army Natick Soldier RD&E Center U.S. Army Natick Soldier RD&E Center Natick, MANatick, MA
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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
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Defense Logistics Agency-Defense Logistics Agency-Troop SupportTroop Support
DLA Troop Support DLA Troop Support Philadelphia, PAPhiladelphia, PA
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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
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USAPHCUSAPHC
HQs US Army Public Health Command HQs US Army Public Health Command Aberdeen Proving Grounds, MDAberdeen Proving Grounds, MD
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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
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USDAUSDA
Agricultural Marketing Service/DCIS Agricultural Marketing Service/DCIS Washington, DCWashington, DC
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FOOD SYSTEMSFOOD SYSTEMS
RATIONSRATIONS
SUBSISTENCE PRIME VENDORSUBSISTENCE PRIME VENDOR
COMMISSARYCOMMISSARY
EXCHANGEEXCHANGE
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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
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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
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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
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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.
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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
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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???
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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
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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
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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
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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
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Commissary SummaryCommissary Summary
Big businessBig business
DECA: Fort Lee, VADECA: Fort Lee, VA
Large ordersLarge orders
Very bureaucraticVery bureaucratic
Broker is neededBroker is needed
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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
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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
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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
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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
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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
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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
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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
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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
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Food Service Feeding ItemsFood Service Feeding Items
CookiesCookies
PastaPasta
Meat ItemsMeat Items
Drink ItemsDrink Items
ShorteningShortening
VegetablesVegetables
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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
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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
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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
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Commissaries & ExchangesCommissaries & Exchanges
Types of itemsTypes of items
Usual manufacturer requirementsUsual manufacturer requirements– Deliver dailyDeliver daily– Stock shelves dailyStock shelves daily– Handle discrepanciesHandle discrepancies
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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
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QUESTIONS ??????QUESTIONS ??????
THIS IS A THIS IS A
GOOD TIME TO GOOD TIME TO
ASK QUESTIONS!!!ASK QUESTIONS!!!
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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