From the desk of the ALA President/Washington Update 12/18

Quotes of note

“These are our Alamo”. Army in Bavaria garrison commander Christopher Danbeck referring to commissaries and exchanges staying open during the most recent mass outbreak of the pandemic in Germany. 

“In our simulations, absent any action, debt held by the public would increase from 100 percent of GDP in 2020 to 229 percent of GDP in 2049.”  December 2020 GAO report The Nation’s Fiscal Health. 

“A whole lot of the reform came from category management and simply managing billions of dollars in expenditures in a smarter and more modern way.”  DoD’s Chief Management Officer Lisa Hershman commenting on the accomplishments of her office. 

“Family programs and Morale, Welfare, and Recreation (MWR) functions are essential components to take care of People and help the Army compete and win the fight for talent.”  From the just released Army Installations strategy. 

Germany clamps down, resale programs persist.  Resale programs in Germany are staying open and the customers and commanders appreciate it.  Tough rules are going into effect Germany-side including shutdown of retailers on the German economy.  But exchanges and commissaries are staying open.  “All garrison-provided services that are currently open will remain open with our COVID mitigation strategies in place,” USAG Stuttgart commander Col. Jason Condrey said in a statement Monday.  That includes on-base fitness centers and shopettes, the statement said.   The Army in Bavaria will also keep its post exchanges and commissaries open, garrison commander Col. Christopher Danbeck said in a video message posted on Facebook and reported in the December 16 European Edition of the Stars and Stripes.  “These are our Alamo,” Danbeck said. “The facilities remain open as they provide essential supplies to our community.

Stay tuned for DeCA changes.  ALA has learned that the leadership of DeCA is doing top-to-bottom scrubs of its entire supply chain and is examining several scenarios to ensure that products are on the shelf.  The review is being led by new Director Bill Moore and includes some 20 listening sessions with major suppliers.  The listening sessions cover the commissary and supplier waterfront including advice from industry on category management, pricing, SKU optimization, store stocking, e-commerce and joint marketing campaigns.  All share one common theme; building sales and volume.  Also, under DeCA review are category management processes and the Agency’s loyalty and rewards programs. 

Vaccine roll-out.  Health care workers in DoD are getting the vaccine and DoD is rolling out more doses as they get them.  ALA is pressing DoD to provide early vaccines to front-line customer interfacing workers in resale programs including contractors who have to work in stores.  The military health system has announced that priority recipients of the vaccine will include “health care providers and support personnel, residents and staff of DOD long-term care facilities, other essential workers such as emergency responders and security personnel, and high-risk beneficiaries.”

ALA Chapter of Excellence Competition gearing up.  We know all ALA chapters are excellent, but some are more excellent that others.  ALA will be issuing nomination forms for its annual Chapter of Excellence Awards.  Chapter President’s should look for this in their inboxes. 

Government shutdown update.  Seems like an annual ritual but this year, no one expects that Congress, in the middle of this pandemic, would dare to shut down the Government…and it probably won’t.  That doesn’t mean they won’t push it to the brink…and they are.  The new deadline for agreement is December 18.  Most expect that they’ll get an agreement.  Unsure at this point whether there will be another continuing resolution for a few days until they get agreement. 

Defense funding missing from the latest pandemic relief bill.  The most popular version of the latest pandemic relief bill is circulating on Capitol Hill.  The $780 billion bill doesn’t include any defense funding as was provided in the original second House pandemic relief bill.  That bill provided $1.4 billion for backfilling nonappropriated fund (including exchange) losses due to the pandemic which ALA has been advocating for.  Funding is still flowing to backfill NAF program pan demic impact from the first relief bill passed this past Spring.  So far, around $340 million has been provided by the Administration to help exchanges get through the pandemic.  This includes $140 million that was provided to the Veterans Canteen Service in one of the Continuing Resolutions to keep the Government open.  Additional Defense pandemic relief funding, including NAF relief ,could come in later pandemic relief bills or be included in an upcoming Omnibus appropriations bill to keep the Government running through 2021. 

NDAA update.  There’s a lot of resale policy guidance in this coming year’s National Defense Authorization bills.  Both the House and Senate have passed the annual Defense policy bills by wide margins and sent them over to the White House on December 11.  They are on the President’s desk awaiting a decision on whether he will veto them. 

3610 extension but no funding in latest pandemic relief bill.  Section 3610 of the Coronavirus Aid, Relief, and Economic Security Act provided authority to reimburse contractors for employee expenses associated with the pandemic. Authority to continue the program into the Spring is included in the latest version of the pandemic relief bill circulating in Congress.  However, the new proposal doesn’t appropriate funding for the Section 3610 reimbursements.

Susan Davis retiring from Congress.  Ten-term military and resale family advocate Susan Davis (D-Calif.) is retiring from the Congress.  Davis has long been a friend of the military quality of life programs and has been a consistent advocate for military family matters including resale programs.  She served on the House Armed Services Committee Personnel Subcommittee which has oversight of exchange and commissary programs.  We wish the Congresswoman well and appreciate her service to the Nation and to our military families. 

Week of the Chapter.  ALA’s Chairman Michael Sleighter (Advantage Military) and Vice-Chairman Ray Milo (S&K Sales) hosted calls with the Presidents of its Chapters this week to solidify the partnership between the ALA National organization and its affiliate regional chapters around the globe.  Christine Roussey of IRI and Stephanie Supplee of Coast Pacific Food Distributors are serving as West and East Coast Chapter Representatives.  Also, ALA’s Sharon Zambo-Fan will be dedicated to organizing ALA National efforts to support affiliate chapters.  ALA is issuing an updated Chapter Handbook. 

AAFES & ALA virtual workshops getting organized.  AAFES and ALA are laying in at least six workshops to deal with a variety of issues.  They will roll-out in the Spring. 

DoD civilian fitness contract awarded.  Millennium Enterprises, doing business as Millennium Health and Fitness Inc., Scottsdale, Arizona has been awarded an indefinite-delivery/indefinitely-quantify contract with a maximum amount of $25,000,000.  It’s wellness and health promotion support services and to staff, operate and manage Department of Defense wellness fitness centers in the Washington D.C. region.

Happy Holidays.  The Holiday season is a busy and stressful time for all engaged in providing goods and services to our military folks.  And ALA extends is best wishes to all industry and resale and food service Government partners.  We wish you and yours a safe and wonderful holiday season.  President Trump issued his Executive Order for the Holidays.  It said: “The heads of executive departments and agencies may determine that certain offices and installations of their organizations, or parts thereof, must remain open and that certain employees must report for duty on December 24, 2020, for reasons of national security, defense, or other public need.”  All of us who work in this industry can relate to that. 

Service centennial.  Happy 100th Birthday ALA.  It was 1920 when the Quartermaster’s Association was formed, the nucleus for what has become the ALA.  The true definition of “Association” is a union of persons in a company or society for some particular purpose.”   ALA is just that.  It is a remarkable organization where members get together with members to work toward a lot of great common goals.  Many members serve on boards, councils, task forces and in chapters around the globe.  These members volunteer their time to the betterment of the entire industry.   As we close out 2020 and our anniversary year, our mission is to promote, protect, and enhance the military resale and quality of life benefits on behalf of our members and the military community.  It doesn’t get much better than that.

Companies faced with Government cyber compliance.  We’re tracking this because it’s coming, and companies that sell to the government are going to be affected.  CMMC stands for the Cybersecurity Maturity Model Certification (CMMC) framework.  We’re working with DoD to determine the extent and level of certification required for both appropriated fund and nonappropriated fund contracts.  Meanwhile, The Department of Defense (DoD) issued an interim rule on Sept. 29, 2020 to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the Cybersecurity Maturity Model Certification (CMMC) framework. This interim rule includes new DFARS clause 252.204-7021, which specifies CMMC requirements and enables the department to verify the protection of Federal Contract Information (FCI) and Controlled Unclassified Information (CUI) within the unclassified networks of Defense Industrial Base (DIB) companies. The interim rule became effective on Nov. 30, 2020, following the 60-day public comment period. The Chief Information Security Officer (CISO) team for Acquisition and Sustainment is currently reviewing and adjudicating the comments. 

In addition to the full CMMC process, which will eventually require every DoD vendor and subcontractor to earn some level of certification from an independent CMMC assessor, the rule added some shorter-term requirements as part of what the department calls a “crawl, walk, run” approach to improving security in the industrial base.  As of Dec. 1, almost all vendors bidding on new contracts will have to log into a web portal and self- attest to DoD which specific security controls in NIST Special Publication 800-171 they’re currently complying with. And especially for contractors who claim a “medium” or “high” score, DoD reserves the right to conduct on-site audits to make sure those attestations are accurate.

“The Defense Contract Management Agency has been doing those audits, which we refer to as DIBCAC assessments, for about two years now,” Katie Arrington, DoD’s chief information security officer for acquisition and sustainment said at an industry conference this month. “What will happen is they will take your assessment that you have given yourself and logged in SPRS, and they’ll actually come to your site and they’ll say, ‘Let’s see how we think you’re actually doing.’ If you’re doing all 110 controls, you’ll be known as a ‘DIBCAC high,’ and that will be good for three years for your company.”  The interim rule includes a phased rollout of CMMC implementation in fiscal years 2021-2025. Starting in fiscal year 2021, the department will pilot the implementation of CMMC requirements for Level 3 and below on select new acquisitions.

10-year MCX logistics contract.  The Marine Corps Exchange (MCX) and Landair, Inc. have signed a 10-year contract for 4PL logistics services.  Landair, Inc. (www.landair.com), based in Greeneville, Tenn., is the current logistics provider for the MCX and according exchange service Bryan Driver who works in the Business Support Services Division, “has shepherded [the MCX] through a complete centralization and transformation of their logistics network over the past five years.    Driver noted, “By continuously supporting improvement efforts in transportation, assured receiving, compliance, and visibility, Landair has helped MCX achieve cost metrics that exceed those of most industry peers, according to a recent Gartner benchmarking study.  “After going through the competitive bidding process, the award of this new long-term contract will allow the continuation of this valuable and mutually rewarding partnership and continued forward progress in cost optimization and innovation.

IRI total store look.  IRI announced the launch of IRI Integrated Fresh, a new solution that tracks sales of random weight as well as traditional UPC items that can be shared across the industry with retailers and manufacturers to give a more holistic view of the store.  Integrated Fresh is the first fact-based data definition of departments, such as dairy, deli, bakery, meat, seafood and produce, and is based on extensive research on which products and attributes the majority of retailers and suppliers consider to be among items found in these departments. Previous definitions varied because they were based on opinion, not a majority-rules, data-driven approach.   “We collaborated with IRI to develop a solution that solves a significant issue in our industry,” said Jeremy Johnson, vice president of education, IDDBA. “Before Integrated Fresh, definitively measuring the total size of the deli or bakery departments was difficult and varied greatly depending on data source and retailer. Integrating both fixed- and random-weight items together properly was also a challenge. We are excited to be able to offer our members special access to this valuable new resource.”

Debt keeps rising…fast.  The Government is shoveling out money to cope with the pandemic.  Meanwhile, GAO reports that by 2023, federal debt held by the public is projected to reach 107 percent of gross domestic product (GDP)—its highest point in U.S. history— according to the Congressional Budget Office (CBOI.  In our simulations, absent any action, debt held by the public would increase from 100 percent of GDP in 2020 to 229 percent of GDP in 2049. 

Reform efforts worth it.  DoD’s Chief Management Officer Lisa Hershman say that reforms in DoD generated some $6.2 billion this year alone.   The savings came primarily from what she called “pure reform” such as improved contract management and trimming programs in defense agencies, Hershman said in an interview. “A whole lot of the reform came from category management and simply managing billions of dollars in expenditures in a smarter and more modern way.”

Defense agency review prognostication.  Todd Harrison, a frequent ALA speaker and defense policy expert at the Center for Strategic and International Studies believes that the incoming administration will continue to target Fourth Estate agencies such as the Defense Commissary Agency.    IN an interview, Harrison said that these agencies are a “perennial target.”   And you know, it’s true that there are a lot of opportunities to gain efficiencies and do things more effectively in this fourth estate. But you know, I wouldn’t bank on that being the magical silver bullet that fixes everything. I think that this administration, like previous administrations, will come in and will, you know, have some sort of an efficiency initiative, will target the Fourth Estate, they’ll make a little bit of progress. But the truth is, that you can make some progress, but a lot of the efficiency savings you can get out of the Fourth Estate, they actually require an upfront investment, and they require time to start to pay off. And so, it’s just a matter of do we have the political will to inflict the pain that efficiencies cause, and the patience to see it through?

More information on PowerDax needed.  Calls with ALA Chapter Presidents have prompted calls for more information on DeCA’s roll-out of its business systems and how it will affect vendor relationships and ordering.  ALA is looking into an on-line seminar to provide more information. 

Army installations—a new strategy.  The Army is out with its strategy on installations.  Here are some pertinent excerpts.  The Army will have to compete for human capital: installation conditions and services are a factor in this competition. “The Army wins through its People; they are the Army’s greatest strength. Safe operations and adaptable and tailorable quality of life programs for Soldiers and Families improve Army readiness and reduce uncertainty. Modern, robust, and efficient facilities; training and education; and modern services are critical to the productive employment and development of Army talent. The Army People Strategy will only succeed with sufficient and trained professionals who provide key services and infrastructure. Our People promote the Army as a great team to join, and installations as the best places to work and live. Facility conditions; safe operations; modern services supporting the mind, body and spirit; Family programs and Morale, Welfare, and Recreation (MWR) functions are essential components to take care of People and help the Army compete and win the fight for talent.

  • Adapt Quality/Functional Facilities. The condition of Army facilities – living and working spaces – must rival the commercial sector in functionality, quality, resilience, and sustainability. Housing and dining facilities are critical components of Soldiers’ experienced QOL. Similarly, Families should have ready access to quality childcare and chapel facilities to accommodate diverse spiritual needs. Ancillary facilities and green spaces that enhance living and work environments – such as walkable development patterns, fitness centers, and recreation areas – contribute to wellness and resilience. The Army must provide quality facilities, whether owned and operated by the Army or shared or leased facilities on or off the installation, that enable the readiness of Soldiers, Families, and Department of Army Civilians in an MDO environment.
  • Deliver Modern Services. Installations provide key QOL services and programs that acclimate Soldiers and Families into the military community. Future recruits will increasingly come from “smart cities” that streamline the provision of public goods and services in a responsive, user-centric environment. This next generation of potential Soldiers will expect similar levels of information, convenience, and choice when it comes to Soldier and Family programs and services offered on an Army installation.
  • Transform Installation Operations. Installations must modernize operations, use data-driven “smart city” approaches to transform the delivery of goods, and modernize services and mission support. Sensors, scheduling applications, and remote monitors will create a COP of real-time conditions, occupancy, and availability of stationing capacity across an installation. Using Artificial Intelligence/ Machine Learning (AI/ML) tools, installations will operate in a proactive manner. The installation enterprise will place increased emphasis on modeling and simulation to support master planning and education of garrison personnel. Partnerships with the private sector will allow pilots and testing of new technologies. We must update facility standards and materials to adopt a total life- cycle cost mindset, resilience, modularity, and safety by “prevention through design.” Multi-use, multi-tenant, adaptable, modular buildings are a means to achieve balance between standardization and demands for future flexibility. Divestiture and modification of physical spaces will accommodate increases in remote or distributed work, reduce operating costs, and allow staff enhanced capability to customize work areas. Tailored services will match the mission, characteristics, and requirements of each installation.

Pentagon News/Military News:

    Senate sends massive defense bill to Trump
(Roll Call) The Senate on Friday voted overwhelmingly and on a bipartisan basis to send President Donald Trump a final defense authorization bill for fiscal 2021.
   

    Timing on defense bill veto could cause problems for Congress, military
(Military Times) The fate of dozens of military pay authorizations, Pentagon reform plans and new program starts now depends on whether President Donald Trump will follow through on his public promises to block a $740.5 billion defense authorization bill over a non-military complaint.
   

    VA unveils first coronavirus vaccine sites as case numbers continue to climb
(Military Times) Veterans Affairs leaders publicly unveiled their initial plans for coronavirus vaccine distribution this week as active cases and deaths related to the illness reached record highs among the department’s patients.
   

     National Guard distributing coronavirus vaccine in 26 states
(Military Times) On Monday — as the first coronavirus vaccines went into arms across America — senior National Guard officials from Ohio, Oklahoma, and West Virginia detailed the critical role their troops are playing in distributing the vaccine in spite of its extreme storage temperature requirements.
   

  Who could be Lloyd Austin’s deputy defense secretary?
(Defense News) Now that President-elect Joe Biden has picked Lloyd Austin, a retired Army four-star general, to lead the Department of Defense, the next question becomes who will serve as deputy defense secretary, the No. 2 spot in the department.
 

    What a Biden presidency means for defense
(National Defense) With Democratic President Joe Biden in the White House and Republicans maintaining sway over the Senate, observers shouldn’t expect a radical change in military spending or strategy, analysts say.
   

INDUSTRY NEWS

US ports stayed busy as retailers readied for the holidays

Import levels at US cargo ports set records in the fall and growth was forecast to remain strong in December as retailers geared up for in-store and online holiday sales, according to the Port Tracker report from NRF and Hackett Associates. “The pandemic has made the past year one of the most trying the supply chain has ever seen, but retailers have met that challenge,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. Read more.

Online alcohol orders soared during Thanksgiving week

Thanksgiving this year brought a surge in online alcohol orders, according to delivery service Drizly. Sales were up 173.6% from the average on the evening before Thanksgiving, and sales via Drizly’s White Glove service grew 1,063% from Monday through Wednesday of the holiday week compared to the same week last year.

Full Story: Modern Retail (tiered subscription model) (12/8)

Stockpiling returns as more grocery shoppers go omnichannel 

Walmart, discounters in strong position heading into 2021

 

RESALE NEWS:

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Camp Lejeune gives free Christmas trees to active-duty service members

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NMCCL’s Marine Mart employees dedicated to keeping doors open during pandemic

. Robert Jones, Operations Manager for the Retail Division at Marine Corps Community Services, says the Marine Mart staff never missed a da…

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