From the desk of the ALA President 12/24

Defense, DeCA funded.  Congress passed a full year appropriations bill covering FY 2021 that runs until October 1, 2020.  Included is full funding of the DeCA request of $1.146 billion and a three percent pay raise for the troops.   It also included a $11 million reduction to funding for the Pentagon’s Chief Management Officer office.

Congress passed a $900 billion pandemic relief bill.  The bill didn’t include any of the defense funding that was in the $2.2 trillion House passed version including the $1.4 billion for reliving nonappropriated fund programs of the DOD from the impact of the pandemic.  House leaders have pledged to continue to press for further pandemic relief and ALA will advocate for the resale relief funding.  Resale programs, including VCS, have received nearly $340 million in relief funding from earlier versions of pandemic relief.

NDAA up in the air.  It’s 4,700 pages long and the Congressional defense authorizing committees have been working on it all year long.  The Defense bill includes many provisions affecting resale programs that have been covered in earlier versions of my communications.  But President Trump appears to be headed toward vetoing it.  Congress will have to return between Christmas and January 3, 2021 to override any veto.  If the bill is not enacted by January 3, they have to start all over again because bills don’t carry over into the next Congress.  Beltway folks are pretty sure the votes are there in the House for a veto override (although the House Republican leader said he will not support an override) but not so sure about the Senate.

ALA communications platform overhaul.  Over the next couple of weeks, ALA will be asking selected members to “beta” it’s new communications platform.  We’ll also be enhancing our ability to communicate with and activate ALA’s valued associates—a network of military family and veteran advocacy groups.  The platform will also enhance our ability to communicate with Washington policymakers on issues that matter to the membership including reducing friction in the military patron shopping experience and ensuring that policymakers are mindful of the positive or harmful aspects of policy impacts on resale programs during their deliberations.  We want to get member feedback on the website features to ensure that we are being responsive and relevant to evolving member needs.  The new site tightly integrates membership data with communications.  We’ll have interactive communication features for the various ALA councils and chapters.  Also, the platform is designed to ease conference registration and conference virtual broadcasts.  The site will also centralize member subscriptions, company and personal profiles, and event sponsorship opportunities.  It will provide access to the members portal for sales data, add delete files, notices to trade and other relevant information will continue to be available via the new website.

Pandemic drops exchange sales nearly $1 billion.  Below are the latest combined sales data from military resale programs.  The pandemic is having a tremendous impact and exchanges and commissaries are staying open, keeping employees on board, and serving patrons despite many challenges.  ALA’s Larry Lapka reports that due to the ravages of the COVID-19 pandemic, the Army & Air Force Exchange Service (AAFES) implemented a different type of sales strategy during the holidays, including Thanksgiving’s Black Friday and Cyber Monday, and the strategy seemed to work, mitigating sales losses during the ultra-busy shopping period.  According to the Exchange, it pivoted from Black Friday-specific promotions to providing savings across a 12-week span, from Labor Day on Sept. 7 to Cyber Monday on Nov. 30.

AAFES’s noted that its “12 Weeks of Black Friday Savings” campaign “helped to protect authorized shoppers and associates as crowds in-store were reduced, allowing the Exchange team to make adjustments to mitigate shifts in consumer buying, COVID-related manufacturing and supply chain constraints and installation access limitations.”  According to the Exchange, this strategy resulted in a 38-percent increase in online sales, offsetting what it described as “modest” decreases in Main Stores and Specialty Stores, with lessened sales of 11 percent and 8 percent, respectively.   All told, implementing numerous customer-friendly promotions throughout the expanded holiday period, AAFES reported that it was able to lessen the shopping hindrances of this very unique season, producing an overall retail sales decrease of 5 percent — without fuel — versus the same time period a year earlier.

Meanwhile over at MCX, despite the challenges this year that were caused by the existence of the pandemic, the Marine Corps Exchange (MCX) posted lower sales for Thanksgiving week, which resulted in a flat retail environment for the entirety of November.   “We recognize the product resourcing constraints everyone is dealing with and appreciate everything the vendor community is doing to mitigate this,” said MCX Chief Operating Officer (COO) Jennifer Wible.  Wible noted that flat sales at two commands — which “saw significant traffic declines due to base restrictions” — resulted in enterprise-flat sales growth to the prior year, with overall November sales “reflecting a great merchandising strategy and optimized store execution.”  She reported that all MCX store retail merchandise sales were down 14.32 percent compared to a 16.6-percent dip in main stores when compared to last year.    “This year, the MCX staggered sales between the Wednesday before Thanksgiving (Nov. 25) and the Friday after the holiday (Black Friday on Nov. 27) in order to accommodate COVID distancing and capacity restrictions.”  Top Hardlines sellers in MCX venues on Wednesday, Nov. 25 included Apple Airpods Pro with Wireless Case ($70,971 in sales based on 363 units sold); Samsung 65-in Smart 4K UHD television ($23,264/52 units sold); and LG 55-in. Smart 4K UHD television ($12,400/31 units sold).  Top Hardlines sellers in MCX stores on Black Friday included Nintendo Mario Kart Bundle ($143,186/363 units sold); Apple MacBook Air 256 GB Gold ($76,873/99 units sold); and Apple MacBook Air 256 GB Gray ($69,082/88 units sold).

Resale Roundup-November 2020 ($ in thousands) *

Service                Nov. 20                    Nov. 19             Diff.                FY20 YTD               FY19 YTD               Diff.

AAFES             $498,547                  $577,749         -13.7%                $4,844,124               $5,414,527            -10.5%

 

NEXCOM          203,612                    230,349         -11.6%                  1,769,032                 1,925,448              -8.1%

 

MCX                     65,823                      75,088         -12.3%                     636,557                    703,330              -9.5%

 

VCS                      26,279                      43,541         -39.6%                     273,432                    419,106            -34.8%

 

CGX                     18,684                      18,654          +0.2%                     160,296                    137,687           +16.4%

____________________________________________________________________________________________

TOTAL             $812,945                  $945,381         -14.0%                $7,683,441               $8,600,098            -10.7%

(exchanges)

Service                Nov. 20                    Nov. 19             Diff.                FY21 YTD               FY20 YTD               Diff.

DeCA               $362,349                  $390,855           -7.3%                   $726,175                  $760,207              -4.5%

* Fiscal years vary by service, as do computation methods. Sales figures are provided by the services on a monthly basis. Some information provided by the services reflects incomplete sales totals or flash figures. Audited figures are used when provided by the services. Sales figures are approximate and are rounded off. AAFES, NEXCOM, MCX and CGX sales totals include gasoline, and fluctuations in prices can impact monthly and yearly performance. Most exchange sales do not include concession sales. All year-to-date charts on this page refer to the month shown in this table unless otherwise specified. Totals may not agree because of rounding.

 

FISCAL YEAR 2020 YTD TOTALS ($ in thousands) **

                        FY 2020 Sales FY 2019 Sales Diff.

DeCA              $4,511,272      $4,485,525      +0.6%

 

Exchanges       $7,683,441      $8,600,098      -10.7%

 

Total                $12,194,713    $13,085,623    -6.8%              

**DeCA Fiscal Year 2020 ended Sept. 30, 2020. The exchange systems’ Fiscal Year 2020 ends Feb. 2, 2021. All other conditions applying to sales and store totals are as described in Resale Snapshot

NEX offers free calls for sailors during the holidays.  The Navy Exchange Service Command’s (NEXCOM) Telecommunications Program Office will be paying for phone calls from deployed military members placed between from Dec. 24 – 26, 2020 and again Dec. 31, 2020 – Jan. 1, 2021. In order to place a call, military members need to have an active Personal Identification Number located on the back of a prepaid phone card or a Virtual Pin Number ordered through AT&T. Calls will be limited to 10 minutes per call.  “Once again this year, we are honored to be able to help deployed Sailors keep in touch with their loved ones over the holiday season,” said Mary B. Johnson, Vice President, NEXCOM’s Telecommunications Program Office. “We know being away from home during the holidays can be difficult and stressful. Offering these phone calls home is our way of thanking our military members for their service and sacrifice to our country.”  In addition, free Wi-Fi will be provided on Dec. 25, 2020 and Jan. 1, 2021 for military members staying in Unaccompanied Housing at Camp Lemonnier, Djibouti; NSA and ISA AB, Bahrain; NSF Deveselu, Romania; and at all U.S. Navy bases in CONUS as well as for military members living in both Unaccompanied and Family Housing at NS Guantanamo Bay, Cuba.

A gift that keeps on giving.  Exchanges are used to giving back and this holiday season is no exception.  From Dec. 17-22, 250 military families in 22 NEX locations received the news that their layaways of children’s items, totaling nearly $65,000 was paid in full by Pay Away the Layaway, Inc. As a special surprise, celebrity Montel Williams made the announcement virtually to those lucky families.  Military families were asked to come to their NEX and once they arrived Montel Williams virtually surprised them with the news. Williams stated, “My military service spanned over 22 years in the Marine Corps and the United States Navy, so I’m honored to have an opportunity to share a message with our military families…today I’m here to thank you for your service, and thank military service members for their courage, their determination and their sacrifice. I also know all too often that sacrifice in silence and that the holidays are particularly hard for military families on a budget.”  “As the grandson of a World War II Navy veteran, I am proud to support the men and women who serve us,” said Lee Karchawer, Founder of Pay Away the Layaway. Pay Away the Layaway is pleased to be able to return kindness in our small way during a tumultuous year for many. We wish the children of our Navy families a Merry Christmas and Happy Holidays!”

Star power.  Academy Award-winning actor Matthew McConaughey, author of Greenlights, will be featured in the second series of the MCX Book Club: Cover to Cover premiering on Tuesday, December 22nd at 7 p.m. (EST) at www.facebook.com/MarineCorpsExchange. In this light-hearted, conversational style interview, McConaughey provides insight and reflections into his new book Greenlights as well as exploring his writing processes, discussing resiliency and discipline. McConaughey even reveals what’s next for him.

AAFES Names ‘Home for the Holidays’ Sweepstakes Winners.  A military member from each of the five service branches won $5,000 each by using their Military Star Card in the Army & Air Force Exchange Service’s (AAFES) “Home for the Holidays” sweepstakes.  “Our military heroes often spend important holidays away from their loved ones in service to their country,” said Tommy Ward, Exchange Credit Program senior vice president. “It’s an honor for Military Star to give these five heroes extra financial support during the holidays.”  According to AAFES, the sweepstakes garnered more than 46,000 entries. Shoppers who used their Military Star Card to make two purchases from any military exchange (including online through ShopMyExchange.commyNavyExchange.comShopCGX.com) and Exchange concessionaires, or at participating Morale, Welfare and Recreation (MWR) facilities, plus two purchases at any commissary operated by the Defense Commissary Agency (DeCA), were automatically entered to win.  “You can’t go wrong using the card,” said Maldonado, who has served in the Army for almost four years. “It’s super convenient.”  The Military Star Card is an exclusive line of credit for service members and their families to use at exchanges and commissaries, no matter where they serve. The card is administered by AAFES.

All about Ike.  Susan Eisenhower, granddaughter of President Ike Eisenhower was featured on AAFES’ premiere broadcast Chief Chat.  Susan Eisenhower, who also appeared at the ALA’s virtual annual convention in October talked about her new book “How Ike Led”.  “Chief Chat” is hosted by Air Force Chief Master Sgt. Kevin “KO” Osby, the Exchange’s senior enlisted advisor, on facebook.com/shopmyexchange to boost morale for the military community. Upcoming “In Recognition Of” guests include:

  • Retired Army Col. Jack Jacobs, Medal of Honor recipient, noon Central Nov 5
  • Retired Army Capt. Florent Groberg, Medal of Honor recipient, 10 a.m. Central Nov. 12
  • Silver Lifesaving medal recipient Coast Guard Petty Officer 2nd Class Victoria Vanderhaden and her father, Master Chief Petty Officer of the Coast Guard Jason Vanderhaden, 10 a.m. Central Nov. 17
  • Retired Marine Corps Warrant Officer Woody Williams, 10 a.m. Central Nov. 19
  • Retired Army Sgt. Maj. Gary Littrell and retired Sgt. Gary Beikirch, 10 a.m. Central
    Nov. 24

California retail COVID restrictions contested.  A coalition of employers and associations has sued Cal/OSHA and Chief Douglas Parker to invalidate the recently enacted COVID emergency temporary standard (ETS) and enjoin the Division of Occupational Safety and Health from enforcing it. “They are acting to defend California business from an overbearing illegal government action,” said someone well known who asked to remain unidentified for fear of retribution from Cal/OSHA.  The lawsuit comes against the expected backdrop of two coronavirus vaccines developed under and now being distributed at “warp speed” by the Trump Administration.

The National Retail Federation (NRF) filed the lawsuit along with the National Federation of Independent Businesses (NFIB), Abate-A-Weed of Bakersfield, Mayfield Equipment Co. of Ukiah, and Relles Florist of Sacramento was filed in San Francisco Superior Court.  The Plaintiffs contend that DOSH and the Standards Board relied on “unsupported speculation there is a nexus between reopening workplaces and the increase in COVID-19 cases. The agencies waited several months before promulgating the standard, demonstrates a lack of a need for an emergency standard, and the board should have engaged in regular rulemaking.

The lawsuit alleges four causes of action:

  • That the Cal/OSHA Standards Board violated the state Administrative Procedure Act by failing to provide specific facts demonstrating the existence of an emergency and the need for immediate action, and it failed to address the situation through nonemergency regulations.
  • Cal/OSHA violated the California Occupational Safety and Health Act by overstepping its jurisdiction in regulating wages or sick leave in the ETS.
  • The Board violated the Due Process Clause of the 14th Amendment to the U.S. Constitution by denying employers “any meaningful opportunity to respond to the proposed regulations and explain how and why they are so deeply flawed”; and
  • Cal/OSHA violated the California Constitution guarantee of “acquiring, possessing and protecting property” by requiring employers to exclude employees “for potentially unlimited periods of time and to pay the potentially ruinous costs associated with these exclusions.”

The parties say California employers have “eagerly committed” themselves to protecting their workplaces from the coronavirus, often at great expense. “The latest science and data reveal that employers’ efforts have generally been successful.” The retail industry alone has spent more than $8 billion to implement effective COVID protocols, they say.

The lawsuit contends the new regulation “would place additional regulatory burden on California businesses that are already compliant” with state COVID requirements and guidelines.

The testing provisions of the ETS alone could cost individual employers millions of dollars, the plaintiffs allege. “One retail employer that operates hundreds of stores in California calculates that it will need 46,897 tests per month for California employees based on current case trends,” the suit states. “Compliance with these ETS requirements may require employers to provide millions of COVID-19 tests.

But DOSH promulgated the complex, 21-page standard, and the board adopted it, despite an opinion by board staff saying it wasn’t necessary. In its recommendation on the labor petition that triggered the rulemaking action, staff stated it was “unable to find evidence that the vast majority of California workplaces are not already in compliance with COVID-19 requirements and guidelines.”

The regulation was triggered by Oakland based WorkSafe, which says it promotes “safety, health, and justice” for workers. Worksafe is Cal/OSHA Chief Douglas Parker’s most recent employer.  A copy of the lawsuit can be found by clicking here.

Defense purchases 100 million vaccines.  The Pentagon today accounced that the Trump Administration, through the U.S. Department of Health and Human Services (HHS) and Department of Defense (DOD), will purchase an additional 100 million doses of COVID-19 vaccine from Pfizer.  On Dec. 11, the U.S. Food and Drug Administration (FDA) authorized the vaccine for emergency use and doses began shipping immediately. The vaccine is being provided at no cost to Americans. Vaccine administration costs for private-sector administration partners are covered by healthcare payers: private insurance, Medicare or Medicaid, and HHS’s program to cover COVID-19 costs for the uninsured which is reimbursing the provider at Medicare rates from the provider relief fund.  Under the agreement, Pfizer will manufacture and deliver up to 100 million doses of its SARS-CoV-2 vaccine, BNT162b2, to Government designated locations. Under the terms of the agreement, Pfizer will deliver at least 70 million doses by June 30, 2021, with the balance of the 100 million doses to be delivered no later than July 31, 2021.  The additional doses ordered today provide for a seamless transition from the first 100 million doses contracted earlier this year. This represents successful implementation of the U.S. government’s overall strategy to ensure continued availability of safe and effective SARS-CoV-2 vaccines to Americans.  This strategy began in spring 2020 with Operation Warp Speed (OWS) planning and has been consistent in all initial OWS contracts and agreements with industry partners supporting large scale manufacturing of SARS-CoV-2 vaccines.  Today’s agreement also includes options for an additional 400 Million doses of the Pfizer vaccine. As part of ongoing coordination, the government and Pfizer are also continuing to discuss potential approaches to further strengthen our partnership and safely expand output and accelerate production.  “Securing more doses from Pfizer and BioNTech for delivery in the second quarter of 2021 further expands our supply of doses across the Operation Warp Speed portfolio,” said HHS Secretary Alex Azar. “This new federal purchase can give Americans even more confidence that we will have enough supply to vaccinate every American who wants it by June 2021.”  The agreement announced today brings the total doses of Pfizer’s vaccine purchased by the federal government to 200 million. Pfizer began manufacturing the first 100 million doses while clinical trials were underway. Manufacturing in parallel with clinical trials expedited the traditional vaccine development timeline and built toward the U.S. government’s Operation Warp Speed goal to begin delivering safe and effective vaccines to the American people by the end of the year.  This goal has been achieved with the initial distribution of the Pfizer vaccine beginning immediately after the Food and Drug Administration granted Emergency Use Authorization (EUA).  The Biomedical Advanced Research and Development Authority (BARDA), part of the HHS Office of the Assistant Secretary for Preparedness and Response, has now collaborated with the DOD Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (JPEO-CBRND) and Army Contracting Command – New Jersey to provide Pfizer approximately $4B total for the delivery of 200 million doses of the vaccine to Government-designated locations across the country.

Kroger hires 1,000 to administer vaccines.  Kroger Health, the health care arm of The Kroger Co., is moving from preparation to action this week to provide coronavirus vaccinations nationwide across its 2,200 pharmacies and 220 in-store clinics in 35 states.  Kroger Health said it will take a phased approach in delivering the vaccines, starting with priority populations as defined by federal and state governments. Plans call for Kroger Health to begin providing the Pfizer/BioNTech vaccination in Anchorage and Juneau, Alaska, this week to health care workers in partnership with the state. Kroger Health said it’s also engaged in vaccination efforts for prioritized populations in several other geographies.  Kroger has conducted over 250,000 COVID tests since April.  “As one of the most-accessible health care partners in the U.S., Kroger Health is prepared and ready to play an active role in helping distribute the vaccine in collaboration with public health officials and community partners,” stated Dr. Marc

Vaccines for grocery workers.  Over the weekend, the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) prioritized health care personnel, long-term care facility residents and people ages 75 and older for Phase 1a of the U.S. COVID-19 vaccination allocation. That group includes health care professionals in hospitals, emergency medical services, pharmacies, outpatient clinics, home health care, and public health and long-term care facilities, as well as residents of skilled nursing and assisted living centers and other residential care facilities.  Next up for coronavirus vaccines in Phase 1b will be people with chronic health conditions at a significantly higher risk for COVID-19 as well as essential frontline workers, including grocery and food industry employees. That group includes first responders, food and agriculture, education (teachers), utility, police, fire fighters, corrections officers and public transit workers, among others. Coming next in Phase 1c will be adults with high-risk medical conditions, those ages 65 to 74 and other essential workers. Mass administration of COVID-19 vaccines, covering much of the U.S. population, is slated for Phases 2 and 3.

Hit this link for the latest Defense guidance on deploying the vaccine.  https://media.defense.gov/2020/Dec/08/2002548508/-1/-1/0/CORONAVIRUS-DISEASE-2019-VACCINE-GUIDANCE.PDF

Other key vaccine links:

https://www.cdc.gov/vaccines/acip/meetings/downloads/slides-2020-09/COVID-07-Dooling.pdf

https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf

https://corporate.perduefarms.com/media/2547/final_perdue_cdc-vaccine-letter_121020-2.pdf

https://drive.google.com/file/d/1xDyQ9ZFuxMIXQujubTgouacipRWg8HU0/view

CPG sector lobbies for vaccines.    Food companies and trade groups have been sending letters and lobbying state and federal officials to secure vaccine prioritization for food workers in manufacturing plants.   “Worker absenteeism remains a concern in manufacturing facilities, posing a threat to the maintenance of consistent inventories of life-sustaining products,” Michael Gruber, vice president of regulatory and government affairs at the Consumer Brands Association, wrote in a letter to the Centers for Disease Control and Prevention. “Without early vaccinations, the CPG sector risks the absence of skilled workers due to illness and the subsequent negative impacts on the supply chain.”  Food plants, particularly meatpacking, were hit especially hard at the start of the pandemic, and as they await word on when exactly it will be possible to administer the vaccine to their workforce, they are preparing to be in the next group for distribution.  Among the meatpacking industry, more than 50,000 workers have been infected and at least 255 have died because of the coronavirus, according to the Food and Environment Reporting Network. The virus has continued to spread among workers and their communities despite precautions, and many companies have faced accusations of mishandling outbreaks.   “Like other critical infrastructure sectors, the meat and poultry industry was among the earliest to face the unprecedented challenges of the COVID-19 pandemic,” KatieRose McCullough, director of regulatory and scientific affairs at the North American Meat Institute, wrote in a letter to the CDC. “Placing meat and poultry plants at the top of the list for Phase 1b allocation can help maximize the health of the entire rural community because the establishment is often the town or county’s largest employer. Prioritizing meat and poultry workers also can help mitigate health inequalities given much of the workforce is comprised of minorities, immigrants, or those with lower socioeconomic status.”

Some state officials are already working to prioritize food workers. Other state draft plans also show that food, manufacturing and agriculture workers would be in early phases, but the details vary. For example, Nebraska‘s plan lists food and agriculture workers in 1b, while California’s interim draft plan puts agriculture, grocery and food industry workers in its general phase 1. Meanwhile, Indiana’s draft has foodservice and manufacturing workers in Phase 2 and Alabama’s plan also has food workers in Phase 2. In some, food workers who have prior medical conditions, who live in shared housing or who are over age 65 could also potentially get the vaccine sooner. Arkansas’ updated plan released Tuesday lists meatpacking and grocery workers in Phase 1b.

When it comes to finalizing those plans, 30 states are still working on more specific criteria for the next phases, according to KFF.  Although the CDC’s Advisory Committee on Immunization Practices put out an interim recommendation for the initial phase to include healthcare workers and long-term care residents, it hasn’t yet released a recommendation for 1b.

Legal questions surround vaccine administration to food industry workers.  Once the food industry is able to get the vaccine, distrust from some workers could pose a problem that companies are starting to think about now. People of racial or ethnic minorities were some of the most impacted by the outbreaks in meat plants, and distrust of the vaccine could be an issue when vaccinating the workforce.   A recent global survey found that 61.4% of employees said they would get a COVID-19 vaccine if their employer recommended it. But an FDA analysis of the Pfizer vaccine found “no specific safety concerns.”  “There is a lot of distrust in the vaccine, even though it is likely highly safe and effective,” said Lawrence Gostin, a co-author on the study and global health law professor at Georgetown University.  So one major question companies are asking now as they wait for the vaccine to be distributed to their workers: Can employers mandate the vaccine if workers don’t want to take it? Gostin said in an email he expects employers at least in certain sectors to mandate the vaccine and thinks it would be lawful to do so.  Brett Coburn, a labor and employment partner with law firm Alston & Bird, said that while generally it is legal to mandate a vaccine, there are some exceptions. Title VII prohibits employment discrimination so employers would need to provide for religious accommodations and accommodations for those with medical conditions, like an allergy.   Companies will also need to negotiate with the unions that represent its workers, because “it can’t just come in and require union-represented employees to get the vaccine without bargaining about that,” Coburn said.

“I think this is a really delicate issue because employers are, of course, saying, we would like for our employees to be vaccinated because it will make the workplace safer, it will allow us to get back to normal or some version of normal sooner, but there’s just the practical reality that a lot of people in this country are going to be reluctant to get the vaccine and that’s, of course, driven by a lot of different things,” Coburn said.   Coburn said although employers may have the right to vaccine their workforce, it might not make the most sense. He said employers may look to instead incentivize employees to get the vaccine, make it accessible to workers and provide educational information.  “Employers just have to be realistic about the fact that a lot of employees may be unwilling to do this, and you need to think about, OK well if I mandate this and a material portion of my workforce refuses to get it, what am I going to do? Am I going to fire one-third, one-fourth of my workers over this? Or am I going to have a different approach?” Coburn said.

Camp Humphrey’s commissary shopping volunteers help quarantined troops and families.  While in the COVID-19 precautionary 14-day quarantine here, many newly arrived Soldiers, civilians and their families often yearn for the comforts and qualities that a simple trip to the grocery store could give them.  To help bring some of this material comfort to those in quarantine, volunteer shoppers have dedicated their time and energy to make custom trips to the Humphreys Commissary, filling specialized orders.  “When we arrived here, we needed help when our son got an allergic reaction, so we reached out and someone came and brought us Benadryl,” said Staff Sgt. Jorge Abreu, a native of the Bronx, NY, and a military police Noncommissioned Officer, assigned to the 3rd Military Intelligence Battalion, 501st Military Intelligence Brigade. “When we needed diapers, someone came and brought us those too. We tried to prepare as best as we could, but there are some things that you just can’t foresee. So those people helped us, and we decided that we wanted to return the favor, as it was really hard for us and it’s probably hard for other families and single Soldiers.”

Alcohol tax break extender.  Beer, wine and spirits makers had been bracing for excise tax increases Jan. 1. But the latest pandemic bill provided some relief.  It appears the lower tax rates they have had since 2018 will be extended permanently.

DLA produce award.  FreshPack Produce Inc., Denver, Colorado, has been awarded a maximum $41,500,000 firm-fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for fresh fruits and vegetables.  This was a competitive acquisition with one response received.  This is a five-year contract with no option periods.  Location of performance is Colorado, with a Feb. 28, 2026, ordering period end date.  Using customers are Department of Agriculture schools and reservations.  Type of appropriation is fiscal 2021 through 2026 defense working capital funds.  The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-21-D-S748).

Bacon contract award.  Epic Foods LLC, * Columbia, South Carolina, has been awarded a maximum $18,860,000 fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for pouched bacon.  This was a competitive acquisition with one response received.  This is a five-year contract with no option periods.  Locations of performance are South Carolina and North Carolina, with a Dec. 21, 2025, ordering period end date.  Using military services are Army, Navy and Marine Corps.  Type of appropriation is fiscal 2021 through 2026 defense working capital funds.  The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE3S1-21-D-Z231).

 

Best regards,

Stephen Rossetti

President

 

NDAA vetoed.  Yesterday we reported the President was headed toward a veto of the National Defense Authorization Act.  He has indeed vetoed the bill.  It now goes to the House and Senate for a vote to override his veto, a move that is expected to take place in the period between Christmas and January 3 when Congress is expected to reconvene.   The bill contains a number of provisions affecting military resale programs.  The House Rules Committee has set a vote on the veto override for December 28 and the Senate will probably move on the 29th.

Stimulus and Omnibus Bills stalled.  The President has threatened to stall the omnibus appropriations bill and the second major pandemic stimulus bills over disputes on levels of funding and other matters.  Congress merged the stimulus bill and appropriations bills and if the President vetoes the bills and Congress does not act to override, the Government is threatened with another shutdown.  Lawmakers are scrambling for a solution perhaps with votes as early as today.  Senators have been notified of the possibility of going back into session to override any veto.

AAFES Christmas gift.  Nearly 290 military families’ spirits are a little brighter this holiday season after their Army & Air Force Exchange Service layaway balances were paid in full.  The paid-for layaways represent more than $66,000 in holiday gift purchases for military children.   “This means a lot—it was definitely an unexpected blessing,” said Army Reserve Capt. Quintesha Greene of the 2nd Battalion – 290th Regiment, who is assigned to Tinker AFB on active orders. “It makes you realize that there are still good people out there who are willing to help others.”  Several of the lucky shoppers were surprised with the news during a Dec. 14 Zoom call hosted by television personality and Navy Veteran Montel Williams, while others were surprised on a Dec. 21 Zoom call with officials from nonprofit Pay Away the Layaway, which paid off the layaways along with the restaurant chain Subway and nonprofit Soldier’s Wish.  “This year has been difficult for everyone, and military families are no exception,” said Air Force Chief Master Sgt. Kevin Osby, Exchange senior enlisted advisor. “We hope this simple gesture shows these lucky families how much their contributions mean to their country, especially during these challenging and uncertain times.”

DeCA’s Director Moore on the state of the commissary benefit, consolidation, the pandemic, curbside, e-Commerce, savings and more.  The year was supposed to be a game changer for the Defense Department’s commissaries, one that extended shopping privileges to all disabled veterans — a pool of four million potential patrons — who could help reverse a steady slide in sales over the past eight years, according to an article in Military.com.

But five days after opening the doors to newly eligible shoppers, many U.S. military bases instituted heightened security measures in response to the killing of Iranian Gen. Qasem Soleimani in Iraq in a U.S. drone strike.

Then, in late March, many installations closed their gates again to nonresidents and nonessential personnel in response to the growing coronavirus pandemic.

The promise of a banner year began to fade.

Yet the madness of 2020 held bright spots for the military’s grocery stores, with the Defense Commissary Agency posting record-breaking sales numbers in early March as the lockdowns loomed and finishing up the year with nearly 1% increases in revenue and sales.

Bill Moore, named as director of the Defense Commissary Agency (DeCA) in July, described the increases as “good” but said the stores have a long way to go.

“We were positive, and I don’t want to downplay that. … We’ve got a lot of work to do to really turn our revenue around and we’re on our way to do that, but we are not there yet,” Moore said during an interview Dec. 15 with Military.com.

On March 13, the commissary system posted its highest one-day dollar amount of sales in its history, $34.5 million. The day before and after saw the 11th highest sales day and 7th highest in history, respectively.

Although the facilities were deemed “mission critical,” some installations’ health protection levels kept many customers from getting to the stores — restrictions that showed in the stores’ bottom lines throughout the summer.

While many stores are getting out from under the slow period, they again are facing increased pressure with the rise of COVID-19 cases in military communities this winter, Moore said.

“I’m fighting hard to keep them to where they can get into the stores,” he said.

The son of a disabled Army combat veteran who retired in the 1970s, Moore “grew up in commissaries,” going with his mom weekly to the store. As an adult, he worked for the Department of the Army, where, as principal deputy chief of staff for logistics, he paid close attention to DeCA’s workings.

“[The system] made a difference in the quality of life myself and my sister grew up with, and so I’m a big believer in it,” he said.

His goal as director is to encourage young service members and families to return to the commissaries — to utilize a benefit that must deliver, by law, 23.7% savings when compared with community prices; currently, they are delivering close to 25% savings, he said.

“We need to better educate our eligible patrons on the savings, and then we have to earn their trust,” Moore said.

Take the savings: Commissaries must provide a 23.7% savings over community stores, as measured by the “local market basket average,” calculated through surveys of stores in surrounding communities.

The average is based on surveys of stores in communities, including prices from Walmart, Harris Teeter, Publix and upscale grocers — an average that often prompts patrons to say they find better prices elsewhere.

“If we compared only to Walmart, it probably wouldn’t be 25%, it would be something less. But I personally went into Walmart and price-checked the items I buy every week for me and my boys, and the commissary beat Walmart on every single item,” said Moore, who lives near DeCA Headquarters at Fort Lee, Virginia.

“We need to get better at how to price certain items. I know when I walk into a grocery store, I can tell you the price of milk at every grocery store in town. There are just certain products that feed into price recognition. I think we need to pay better attention to that,” he said.

Another untapped market for bringing in new shoppers is ecommerce, including DeCA’s Click2Go online ordering and curbside pickup, available now at 11 stores in the U.S.

Moore said that broadening the program has its challenges, requiring additional refrigerator and storage space and an updated online shopping experience. But service members today value convenience, and curbside pickup is ubiquitous throughout the retail grocery market, he explained.

“They want to save money, but it has to be in a convenient way. We’ve got to figure out how to deliver on that,” he said.

In addition to Click2Go, DeCA also is exploring on-base grocery delivery, he added.

“Why can’t we figure out a way to drop groceries at the barracks door, or at least the door to the barracks. We could even work a deal where we have veteran-owned businesses take on that delivery mission,” Moore said.

There’s also the “coolness factor” — or lack thereof — of commissaries, he said, since many young service members believe only retirees and senior leaders shop in the stores.

He recalled a former patron — a junior enlisted soldier — saying he wasn’t properly masked earlier this year and was told to do push-ups by a higher-up in the store.

“Well, that’s one customer we won’t get back,” Moore said.

To better understand how to reach this audience, DeCA is setting up a young service member and family focus group. “I’ve got anecdotal evidence, but I’d like to back it up with focus group input,” he said.

For the past several years, the DoD has studied an effort to merge its commissary system with the military services’ three separate exchange systems — a proposal that a business case analysis conducted in 2018 said would save between $690 million and $1.3 billion in the first five years.

But the Government Accountability Office in May found fault with several underlying premises of that analysis, saying the researchers didn’t properly count the number of identical products sold across the four systems — a data point that would affect the estimated reduction of eliminating duplicate purchases — and underestimated or failed to count certain costs, such as establishing a new information technology infrastructure to manage the new agency or the cost of establishing a new central headquarters.

Moore said that, in his old job, the merger seemed like a “pretty good idea,” but now that he sees commissary operations and funding from the inside, it “doesn’t look like a viable business case.”

“I see great potential, and I think we would be idiots if we didn’t better partner with our exchange partners,” he said. “We just did a joint sale with AAFES for Veterans Day, and it worked great. From a partnering perspective, we should do that.

“It would take a pretty good while to realize the savings, and the savings probably wouldn’t be anywhere close to where that original [projections] were. … Frankly, I don’t see the business case to do it,” Moore added.

2019 survey of 75,000 Consumer Reports readers ranked Defense Department commissaries in the top 10% of 96 grocery chains, coming in at roughly fifth on the list, tied with wholesaler Costco and regional groceries Publix and Fareway.

Commissaries received excellent reviews for pricing, cleanliness and offerings of international products. They also were noted for checkout speed, meat and poultry quality, and the quality of store brands.

This year, officials have worked especially hard to keep the stores stocked and safe for shoppers and employees. DeCA is still struggling to keep cleaning products on the shelves and restricts purchases of paper goods, but Moore said he is working with vendors to ensure continuity of the supply chain.

Moore also said he is proud of the 14,000 employees who have helped keep the stores clean and open for customers and have worked long hours throughout the pandemic.

They have stepped up when their at-risk colleagues were placed on leave, stayed home when testing positive to ensure the safety of their workplace, and even given their lives — at least three commissary employees have died of COVID-19, Moore said.

“I’m proud of the way our workforce has stepped up. … The workforce is all in. They are passionate and dedicated. It’s hard not to be passionate about this mission.”

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