From the desk of the ALA President 1/7

Democrats on way to taking Senate control.  Control of the U.S. Senate is on the way to shifting to the Democrats.  All committee and subcommittee chairs will shift to the Democrats.  Normally negotiations between parties over committee sizes and ratios, action of committee assignments begin in November after the election.  Because of the need for a run-off election in Georgia that took place on January 5, this organization was delayed.  Congress officially convened on January 3 with the Republicans in control.  While they are in the majority and control the agenda and legislative pace, they do not have the 60 votes needed to pass legislation.  That is, unless, as threatened, they change the rules to eliminate the filibuster in which case they only need a simple majority.  Committee assignment resolutions are considered in late January and committee funding resolutions are considered in February.  Senators are already bidding for which committees they want to belong.

Democrats now will control the confirmation process for Pentagon picks with a series of quick nomination hearings to begin after the inauguration of President-elect Biden.

For resale programs, the key committees are Armed Services, which sets policy and multi-year funding levels for DoD, the Defense Appropriations Committees which allocate annual funding for DoD.  Senator Jim Inhofe (R-Okla.) will relinquish his Chairmanship of the committee to Jack Reed (D-R.I.).  Resale program jurisdiction on the SASC falls under the Personnel Subcommittee.  This Subcommittee was chaired by Tom Tillis (R-N.C.), but the chairmanship will shift to the Democrats and the current Ranking Member of the Subcommittee is Kirstin Gillibrand (D-N.Y.).  For Appropriations, the Chairmanship of the Defense Subcommittee will probably shift to the current ranking member, Senator Dick Durbin (D-Ill.) from Senator Richard Shelby (R-Ala.).  Committee staff ratios also shift with the Democrats having more control over staff positions.  It’s unclear as to the practical effect the shift will have on resale programs.  Senator Jim Inhofe resisted efforts at privatizing commissaries and has consistently supported full funding or commissary budgets.  And, while Democrats are generally supportive of funding for military family programs, there will be pressure on the overall Defense spending levels as progressives in the party argue for more domestic spending at the expense of defense spending.

The Senate Veterans Affairs committee chair will probably shift to the Ranking member John Tester (D-MT) and the Gary Peters (D-Mich.) is in line to replace Ron Johnson, (R-Wisc.) as Chairman of the Homeland Security Committee which has jurisdiction over the CGX.

House of Representatives transition.  Because leadership of the House did not change hands, they are further along in organizing for the next session of Congress.  For the House Armed Services Committee, Adam Smith (D-Wash.) will retain the Chair and Mike Rogers (R-Ala.) has been approved to be Ranking Member of the Committee, replacing Mac Thornberry (R-Texas) who has retired from Congress.   The Committee is still organizing but it appears the Jackie Speier (D-Calif) will be Chairman and Trent Kelly (R-Miss) will be ranking member.   Three democrats were appointed to the committee including Joe Morelle (D-NY) and newly elected members Rai Kahele (D-Hawaii), and Sara Jacobs (D-Calif).

Pentagon transition taking shape.  The Biden team has announced General Lloyd Austin as their pick for Secretary of Defense.  Also announced is Kelly Magsamen as Austin’s Chief of Staff.   Magsamen is VP for National Security and International Policy at the Center for American Progress and has held several positions in DoD.  This is the same organization that Neera Tanden currently runs.  Tanden is up for Biden’s Director of Office of Management and Budget.  She doesn’t have to be confirmed by the Senate.

Kathleen Hicks is being nominated for Deputy Secretary of Defense.  Hicks is currently at the Centers for Strategic and International Studies.  She is heading up Biden’s Defense transition team.  ALA has hosted a number of CSIS speakers at its meetings in recent years.  As Deputy Secretary, Hick will have management responsibilities for the DoD and be involved in funding and restructuring decisions affecting resale organizations.  This is especially significant with the elimination of the Chief Management Officer’s Position that is currently in the 2021 version of the National Defense Authorization Act.  The CMO office has been leading resale transformation efforts in the Pentagon.   She worked on the Commission for the National Defense Strategy that was set up in the 2017 Defense bill.

Dr. Colin Kahl is tapped to be the Pentagon’s Undersecretary of Defense for Policy.  He worked Defense issues for Biden when he was VP under Obama.  He won’t be involved with resale issues but will be involved in basing and troop stationing decisions.

Moore, Flannery and other DeCA chiefs January 6 meeting with ALA Commissary Council.   DeCA and industry is collaboration is accelerating as Alex Sizemore, ALA’s Commissary Council Chairman and Council Subcommittee leads met with the DeCA leadership on a wide range of issues aimed at boosting volume, improving stocks on shelves, and reshaping the category management processes.  The call included Director Moore, Jim Flannery, COO Mike Dowling, Store Operations Chief Rogers Campbell, Tracie Russ, Chris Burns, IT Director Theon Danet, Randy Eller, and Bonita Moffett.   A wide-ranging discussion took place with Council briefings to DeCA on:  EBS deployment and planning, joint business planning, store operations, store resets, pricing and promotions, patron engagement and e-commerce, and cross-resale promotions.  The Council effort is part of an increasing ALA and DeCA effort to more closely synchronize efforts across the board to boost the commissary benefit and air and resolve friction both in the patron shopping experience and in the supply chain.  

CMMC determinations in the works.  The DoD is examining the impact of the Cyber Security Maturity Model implementation and its effect on commissary and nonappropriated fund contractors.  ALA is working with OSD to clarify the application of the CMMC and will report developments as they take place.

Diversity training Executive Order implementation. While Biden is expected to eliminate or radically change an executive order issued in September by Trump, Agencies, including the Department of Defense, are moving forward on implementation.     Those requirements include incorporating language in all contracts that prohibits the types of divisive training outlined in the order for contract employees and removing “divisive concepts” from agency training, ensuring diversity training contracts meet the EO’s requirements.  Biden is expected to overturn the Executive Order requesting Agencies are required to evaluate whether to debar any contracts that violate the Order.

Vaccines for resale program contractors?  OSD working on a memo regarding vaccine allocations to the Defense Industrial Base contractors.  We will share as soon as it clears.

Grocers administering vaccines.  Grocery chains including Albertsons, N-E-B, and Walmart have started administering COVID-19 vaccines to high-priority recipients as the food-retailing industry gears up for a large-scale rollout of inoculations against the disease during the coming months, according to announcements from the companies.  The retailers are initially giving vaccines to people in Phase 1a of the Centers for Disease Control and Prevention’s distribution plan, which limits the shots to healthcare workers and residents of long-term care facilities.  Grocery workers are among the “frontline essential workers” included in the next phase of the government inoculation plan, but it remains unclear when vaccinations will be made available to that segment of the population.

Amazon Air. Inc said on Tuesday it bought 11 Boeing 767-300 aircraft, as it looks to quicken delivery with an expanded fleet.  The aircraft, including seven from Delta Air Lines and four from WestJet Airlines, will join Amazon’s air cargo network by 2022

Moore assures commissary shoppers on safety.    “Be assured, at all of our commissary locations worldwide, we are following CDC and DOD guidance, specifically regarding sanitary measures, social distancing and wearing masks,” said Bill Moore, DeCA director and CEO. “These measures are particularly important to keep our employees and customers healthy as case numbers climb.”
On March 25, DeCA’s stores, central distribution centers and its central meat processing plant were designated mission-critical in DOD’s response to the COVID-19 pandemic. Since then, the agency has not taken this responsibility lightly, Moore said.

“The entire DeCA team appreciates the tremendous responsibility of being one of your valued lifelines for support and understands the critical mission of delivering your commissary benefit,” he said.

Since the start of the COVID-19 pandemic, DeCA has implemented the following measures to help mitigate the spread of the virus in commissaries:

* Commissaries conduct daily health screenings of anyone who works in commissaries – including employees, baggers and affiliated contractors – before they start their shifts

* Anyone (including customers) entering a store must wear a face covering

* Stores have clear plastic sneeze shields in all regular checkout lanes

* Commissary personnel wipe down checkout areas, product display cases, restrooms and shopping carts with disinfectant, and practice routine hand washing and other basic sanitation measures

* Touchless credit card processing eliminates the need for the customer to sign

* Customers scan their own ID cards so cashiers can provide them touchless transactions

* Reusable bag usage has been banned

* DeCA canceled special events such as the spring sidewalk sales, in-store product demonstrations (including DeCA’s free coffee program), group tours, vendor-sponsored events and other events to discourage group gatherings

* Commissaries are working with installation leadership and public health personnel to implement risk reduction practices specific to that base

To help give customers more cost-effective options for personal protective equipment, commissaries have added disposable and reusable masks and digital contactless thermometers to store inventories.  “I would like to send a profound ‘thank you’ to our customers on behalf of our DeCA employees worldwide,” Moore said. “We all would like you to know how much we appreciate your understanding, patience, and continued support throughout the coronavirus outbreak.”

Standard retires as DeCA Chief of Staff.  Teena Standard served at DeCA since its inception in 1991.  She is being replaced by Christopher Lyons, DeCA’s resale and government affairs advisor until a permanent replacement is appointed.

Tyndall experiments with commercial vehicle scanner.  A new x-ray scanner taking only two minutes to inspect an incoming commercial vehicle is in use at Tyndall Air Force Base, Fla., the U.S. Air Force announced. The first Mobile Vehicle Access Control Inspection System, or VACIS M6500, of the Air Force was deployed in mid-December and significantly reduced the time it takes to inspect a vehicle arriving with construction supplies. The base is being rebuilt after it was destroyed by a hurricane in 2018.

Labor agreement pending in Korea.  South Korea and the United States are negotiating a plan to share labor costs and avoid once more furloughing local employees of U.S. Forces Korea, a spokesman for the South Korean Ministry of National Defense said Monday, according to a Stars and Stripes article.   “South Korea and U.S. defense authorities are currently holding discussions for employment stability of Koreans working for USFK,” said Boo Seung-chan at a Monday ministry briefing.  Seoul and Washington have been at odds over President Donald Trump’s demand that South Korea substantially increase the amount it pays to host a U.S. military presence, a contract called the Special Measures Agreement. The previous agreement expired in December 2018.  In April, the U.S. government placed about 4,500 South Korean base employees, about half its local workforce, on unpaid leave for almost three months when the two countries failed to agree on a plan to divide the costs of their wages. The decision was a blow to the alliance and its military readiness to fight on the divided peninsula, commanders at USFK told Stars and Stripes in April.  The current negotiations aim to break that deadlock and prevent another furlough, according to a report Monday by the Yonhap News Agency based in Seoul. In June, South Korea provided $200 million to pay the entire Korean workforce at U.S. bases through the end of 2020.  The U.S. military warned its South Korean base employees in November that they may face another furlough in 2021 if an agreement cannot be reached.

Happy 75th to VCS.  The Veterans Canteen Service is celebrating 75 years of service to our Nation’s Veterans and the thousands of dedicated caregivers in Veterans facilities.  ALA congratulates and extends its gratitude to VCS Executive Director Ray Tober and his world-class team of professionals for their service at 160 locations worldwide n caring for our Veterans and contributing to so many worthy causes on their behalf.   Ray, we are honored to be associated with you and your team.  Seventy-five years ago, on Jan. 3, 1946, President Harry S. Truman formally established the forerunner of today’s Veterans Health Administration, the Department of Medicine and Surgery within the Veterans Administration, when he signed Public Law 79-293.

Customs and Border Protection Agency detaining Sime Darby Plantation palm oil products.  Citing use of forced labor, CBP is urging consumers to “check the websites of their favorite retailers to verify that they have fair trade policies and corporate social responsibility programs.” Palm oil is a common ingredient in products that U.S. consumers encounter every day in grocery and convenience stores. According to U.S. Department of Agriculture reports, palm oil is increasingly found in processed foods, cosmetics, pharmaceuticals, soap and biodiesel.  The Withhold Release Orders and Findings listed  The Department of Labor’s List of Goods Produced with Child and Forced Labor; and Vietnam sanctions considered.

U.S. Trade Representative to initiate an investigation of Vietnam’s manipulation of currency and is considering sanctions.     A statement from the U.S. Trade Representatives’ office says “Vietnam’s currency is closely tied to the U.S. dollar. Available analysis indicates that Vietnam’s currency has been undervalued over the past three years. Specifically, analysis indicates that the dong was undervalued on a real effective basis by approximately 7 percent in 2017 and by approximately 8.4 percent in 2018. Furthermore, analysis indicates that the dong’s real effective exchange rate was undervalued in 2019 as well.”  Hearings were held on December 29 and 30.  Retail organizations testified that

  • They are concerned about the potential for tariffs to be now placed on their imports from Vietnam as a result of this investigation.
  • As companies continue to recover from the ongoing economic damage caused by the coronavirus pandemic, new tariffs on imports from Vietnam will further harm these U.S. companies and will result in higher costs for their consumers, many who themselves are recovering as well.
  • The proposed tariffs would increase costs to consumers (businesses and their customers, including American families) at a particularly challenging time — even after retailers attempt to adjust by changing sourcing, yet again.
  • Consumers would pay as much as $11 billion more for goods imported from Vietnam.
  • Apparel and footwear would be especially hit, as tariffs on these items from Vietnam
  • Sanctions would add to the high duties American consumers already pay for these goods. Notably, the tariffs on imports from Vietnam would shift some trade back to China, even with tariffs of equal size imposed on imports from that source.
  • The Retail Industry Leaders Association testified that American businesses and families have been assessed more than $72 billion and placing a tax on Vietnam imports now would create tremendous uncertainty for U.S. retailers and unfairly punish them for moving away from China.

All but three Navy bases have reinstated their travel restrictions due to the coronavirus pandemic.  The Stars and Stripes newspaper also reported that as of December 28, 59 out of 62 naval bases had travel restrictions reinstated, according to a Pentagon document released Wednesday. The only U.S. naval bases that have lifted their travel restrictions are located overseas: Naval Station Rota in Spain, Naval Station Guantanamo Bay in Cuba, and Naval Support Activity Bahrain the paper reported.  As of Monday, 91 of 231 U.S. military installations around the world, or 39%, had lifted their travel restrictions for personnel, according to the document. The last time there was that few bases open for travel was July 13.  The military reached the most open bases on Nov. 4 at 153 out of 231, or 66%, according to the Pentagon. Since then, more installations have had to reinstate travel restrictions as coronavirus cases have risen during the holiday season and cooler weather.

DoD travel restrictions published.

Operation Warp Speed briefing×576-1769k.mp4

  • With two vaccines for COVID-19 —one from Pfizer and one from Moderna— now available to Americans following emergency use authorization by the Food and Drug Administration, Operation Warp Speed has been moving quickly to get those doses out to everyone who needs them.    “We are really doing well, in my opinion, in the distribution,” Army Gen. Gustave F. Perna said during a briefing today from the Pentagon. “Over 14 million doses of vaccine have been distributed to date. And every day we push more vaccine.”
  • Operation Warp Speed stood up just seven months ago, in May, to help bring a vaccine for COVID-19 to the American people. Since then, Perna said, OWS has been instrumental in the development of two vaccines, and Americans are now receiving those vaccines. Perna also said OWS worked to develop manufacturing capacity for the vaccines while they were still in development — including the construction of new manufacturing facilities.  The general also explained other efforts OWS has undertaken since it stood up, to further the goal of getting vaccines and therapeutics to the American people.  In October, OWS announced a partnership with CVS and Walgreens where those two pharmacy chains would provide free-of-charge vaccination services to long-term care facilities across the U.S.

J.C. Penny’s and Macy’s saga continues.  Macy’s has announced the closure of 36 more stores of the 544-store chain.  Also, under new ownership, J.C. Penney is continuing its tradition of turning over chief executives.  When Soltau arrived two years ago, there were high hopes that her reputation as a talented merchant might bring about the turnaround the department store had been toiling at for years. She replaced Marvin Ellison, who left to become CEO at Lowe’s after about three years on the job, making it four CEOs in about 10 years.  The department store hasn’t had a year of positive net income since 2010, and has especially struggled in women’s apparel. Penney has watched beauty retailer Sephora plan to exit the shops it had established at several Penney stores, which have proven to be some of Penney’s best traffic drivers, and head to Kohl’s instead.

DeCA Plans Slate of Early CY2021 Category Reviews.  ALA’s Larry Lapka reports that throughout December, the Defense Commissary Agency (DeCA) announced a slate of category reviews that will be conducted by the Sales Directorate (SD) and are scheduled to take place throughout January and into early February in calendar year 2021.  According to Tracie Russ, the agency’s director of Sales, these category review areas are slated to include items ranging from chilled butter, margarine and spreads to organic health and beauty care (HBC) products.

Delivery charges eat into supermarket profits.  Many supermarkets say they aren’t making money through Instacart, largely because the delivery company typically charges them a commission of more than 10% of each order. Some of Instacart’s retailer partners say the service holds too much control over customer interactions and expect it to take an increasing share of money that food makers spend on marketing.  All that has put grocers in a bind, as delivery continues to boom and becomes a necessity. Some grocers are focusing more on their own pickup operations or working with rival delivery companies.  For many supermarkets, food delivery cuts into already-thin profits. “We don’t think we make money from an Instacart order,” said Mark Skogen, CEO of Skogen’s Foodliner Inc., which operates more than 30 stores under its Festival Foods brand and began offering Instacart about a year ago.  Instacart said it has added or expanded arrangements with more than 150 retailers in the U.S. and Canada this year, putting it in partnership with more than 500 companies including Kroger Co., Walmart Inc., Aldi Inc. and 7-Eleven Inc.  To maintain some control, others are choosing not to outsource their entire e-commerce business. Kroger, the nation’s biggest grocer, handles pickup orders with its own staff. The company also encourages customers to order delivery through its website—rather than Instacart’s—by offering digital coupons and fuel savings at Kroger gas stations for members of its loyalty program. Kroger executives described Instacart on recent earnings call as a big partner but said the grocer is always seeking delivery partners.  Retailers have more options at hand. DoorDash Inc. and Uber Technologies Inc. started delivering groceries this year while Target Corp.’s Shipt Inc. continues to expand.

DeCA health safety slot filled.  Army Col. Alisa R. Wilma is the interim director of the Defense Commissary Agency’s public health and safety directorate, announced Rogers E. Campbell, executive director of DeCA’s Store Operations Group. The appointment was effective Dec. 15.  Wilma temporarily fills a position left vacant by the departure of Army Lt. Col. Angela Parham, who is on leave as she prepares to retire Jan. 31. The agency is going through the selection process for Parham’s permanent replacement, who is expected to be on-site by mid-June.  DeCA’s food safety mission ensures all edible products destined for commissary shelves are inspected by military Veterinary Services personnel, who check items for documented place of origin, and ensure they are within appropriate temperature ranges and free of any pests or signs of contamination that could cause foodborne diseases.  N In the area of occupational health and safety, agency specialists are charged with tracking U.S. federal requirements along with those governing the local national employees in the country where the store operates.

71 percent of young Americans between the ages of 17 and 24 are currently ineligible for military service, primarily because they are too poorly educated, too overweight, or have a history of crime or substance abuse. This according to Mission: Readiness, an organization of 800 retired admirals and generals in a letter to the acting Secretary of Defense.

Base operations contract award.  Valiant/ALCA JV LLC, Clarksville, Tennessee, was awarded a $7,528,791 indefinite-delivery/indefinite-quantity modification under a contract for base operating support (BOS) services at Naval Air Station (NAS) Sigonella. After award of this option, the total cumulative contract value will be $19,062,534. The work to be performed provides for all labor, supervision, management, tools, materials, equipment, facilities, transportation, incidental engineering, and other items necessary to provide base services for NAS Sigonella and its outlying support sites.

Long-time military family advocate Rep. Susan Davis’ farewell message.  So much of my time in Washington has focused on my two committees of Armed Services and Education and Labor. The fact that I witnessed the 9/11 attack on the Pentagon from my DC office (while watching planes strike the Twin Towers in New York) in my first year in office had a profound impact on me and the time I devoted to military families. In addition to making sure our troops got what they needed to meet their operations, I intervened with families where necessary. That extended to helping our troops with their educations and that of their families after the multiple deployments many of our men and women endured. I always felt that pairing of committees allowed me to use my skills and experience and best serve San Diego.  Thank you, Congresswoman Davis.

Germany withdrawal in question.  At least one Congressman is saying that the withdrawal of forces from Germany won’t happen any times soon.   “I do believe that if there’s a change in the administration, that this will not happen,” Rep. Ruben Gallego, D-Ariz., told Military Times on Oct. 15 during a press call. Gallego and his colleagues passed their version of the 2021 Defense bill which includes a provision that no troops be removed from Germany until the Defense Department submits a detailed timeline and financial plan for the withdrawal, then carries out a waiting period of 120 days.  Though the Pentagon has proposed moving 12,000 troops out of Germany, officials could not offer details about the cost or the proposed timeline for carrying out the plan.

Ahold acquires FreshDirect.  A new era begins for FreshDirect after Ahold Delhaize said it received regulatory approval and closed on its acquisition of the food delivery company. After receiving regulatory clearance from the U.S. Federal Trade Commission.  FreshDirect will retain its brand name and continue to independently operate out of its New York City facility.   Launched in 2002, FreshDirect provides grocery delivery to the greater New York City, Philadelphia, and Washington, D.C. metropolitan areas, with seasonal service to eastern Long Island and the Jersey Shore. Principal long-term investors in the online grocer include Brightwood Capital Advisors, Maverick Capital and W Capital Partners.  Albertsons decided to move away from doing its own grocery delivery in Southern California and other areas in early December, according to Andrew Whelan, senior director, communications & public affairs for Albertsons.

Walmart Agrees to Amend National Hiring Practices to Protect Military Members. The Department of Justice announced today the resolution of a lawsuit in which Naval Petty Officer Third Class Lindsey Hunger alleged that Walmart violated her rights when it failed to offer her employment at the Walmart store located at 2545 Rimrock Avenue in Grand Junction, Colorado because of her upcoming Naval Reserve commitments. Ms. Hunger had alleged that Walmart’s actions violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The Department of Justice Civil Rights Division and United States Attorney’s Office represented Petty Officer Hunger in the lawsuit.

As part of the settlement, which includes backpay for Petty Officer Hunger, Walmart has agreed to review and revise its employment and internal hiring policies across the corporation. It has also agreed to revise the policies to include the following language:  “Walmart prohibits discrimination against individuals, including applicants, based on their military service (including required military training obligations) or membership in the uniformed services.” Walmart will also ensure that “all supervisors, managers, and administrative staff” in the Grand Junction, Colorado store at issue receive training — developed in consultation with the United States —“on the requirements of USERRA and on employees’ and service members’ rights and obligations under the statute.”  This lawsuit stems from a complaint that Ms. Hunger filed with the United States Department of Labor, which, after an investigation by the Department of Labor’s Veterans’ Employment and Training Service, referred the matter to the Department of Justice.

GAO protests off slightly.  Industry continued a recent downward trend in the number of bid protests filed over federal contracts in fiscal 2020, according to the Government Accountability Office.  GAO, which adjudicates bid protests, handled 2,149 bid protests in fiscal 2020, down 2% from the 2,198 bid protests filed by industry in fiscal 2019.   Fiscal 2020’s bid protest tally represents a 10-year low in the number of bid protests filed by industry, down from a peak number of 2,789 protests filed in fiscal 2016.  In fiscal 2020, GAO sustained 84 of 545 total cases decided on merit, for a sustainment rate of about 15%. The most common reason for a sustained or successful protest by industry was over unreasonable technical evaluations, followed by flawed solicitations, unreasonable cost or price evaluations, and unreasonable past performance evaluation.

Best regards,

Stephen Rossetti


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