Zone 6 –8 - 9 Meeting

Operations Update Mr. Bob Hayden Director, Performance and Policy

Directorate of Performance and Policy

CARTS Overview

C

ommissary

A

dvanced

R

esale

T

ransaction

S

ystem

R

CARTS Overview

Mission The CARTS program is a total system replacement of DeCA’s aging existing point-of-sale (POS) systems , including all commissaries, server centers, and test beds GOALS and OBJECTIVES Improve customer service

- Keep pace with commercial industry

Lower cost of ownership

- Achieve high POS system availability -Improve business functionality

Comply with DoD system mandates

- Enhance security - Achieve flexible open system compliance

Strategic Partner Acquisition Strategy

• • • • • •

Single-step to full operational capability One prime integrator of COTS/non-developmental items Performance-based contract with performance incentives Full and open competition Indefinite delivery/indefinite quantity contract 10-year contract (5-year base and five 1-year options)

R 4

Benefits of Shelf Checkout

No interaction with a checkout person Greater accuracy than a checkout operator Privacy Control Having a choice on how to checkout Speed or faster checkout Shorter Lines 0 10 20 30 40 50 60 % of Shoppers

Survey conducted in 2006 by IDC Corp of 6,359 shoppers

.

5

CARTS Solution Overview

Self-Checkout 6

CARTS Solution Overview

Non Checklane Hardware and Back Office Solution Components

Data Entry Terminal Hand-held Terminal Electronic Shelf Label Hand Scanner

Pricer

Portable Printer Back Office Printer

Lenovo PC CAC Enabled Keyboard

Cash Management

PSC QS6500 Symbol MC3000

Customer Price Check Station

Zebra QL320 QL320 IBM InfoPrint R 1532 Express Symbol Cummins JetScan 4068 Currency Counter JetSort 1606 Coin Sorter 7

Cash Register

CARTS Solution Overview

( Store Front) Checklane Hardware

Check Stands Scanner / Scale

SurePOS 742

Receipt Printer

R

Cashier Entry Device Customer Access Terminal

4610-TG9 4820-2GB

Customer Display Hand-held Scanner

8

Deployment Schedule Criteria

•

No installs on Federal holidays, paydays, peak sales periods

•

Installs on lower sales volume days as much as possible (Mon/Tues/Wed)

•

Commissaries open 7 days/wk will not close for install

•

BRAC sites or closure scheduled at end of deployment

•

No installs during holiday black-out period Thanksgiving / Christmas peak sales period

•

Will provide training to all employees in advance of deployment

9

Recommendations for Success of SCO

 Properly train our employees and patrons for self checkout  Monitor and manage self-checkout as part of front-end, use the registers in slow times  Must have full management by-in  Commit to using the self check outs as cashier driven during busy periods 10

DeCA Swell Allowance Program Update

11

Swell Allowance Program

• 16 Companies in the program (listed on next slide) • Letters sent to companies not participating or offers too low • Will bring new companies on monthly as offers are accepted • CAO will soon be able to track vendor throwaways along with store throwaways to validate percentages used in the swell allowances 12

Swell Allowance Program

Companies Participating as of January 1, 2007

• Bavarian Meats • Callard Bowser Suchard Inc Durex • Jack and Jill • JC Potter • Jelly Belly • Johnson & Johnson • JTM Provisions • Kelloggs • Nabisco Food Group Planters Nuts • Nestle • Novartis • Performance Seed • Picsweet • Rivianna • Roger Wood Foods • Seattle Fish 13

Swell Allowance Program

Exclusions to the program:

• Price Reductions – items reduced voluntarily by the vendor in order to promote the sale of products or short dated items reduced for quick sale • Returned Merchandise – products in good condition voluntarily returned to the vendor at their request and/or items donated by a vendor to other organizations on military installations • Guaranteed Sale Items – items that do not sell and are not unsaleable; items that do not sell within a specific period of time, such as holiday or seasonal items and promotional items, and items that are under a specific buy-back agreement • Voluntary Recall/ALFOODACT – medical recalls • Distributor VCMs – shortages, mis-picks, etc.

• Product Demonstrations • Manufacturer Deletes 14

Swell Allowance Program

• Stores still have latitude to flush out deleted items, close dated items or agreed upon distressed purchases from manufacturers with manual VCMs under mutual agreements or requests from the manufacturer • Companies are still responsible for close-dated merchandise • Ensure store staff and vendor stockers are handling product properly and watching for close dated items 15

INFRASTRUCTURE UPDATE

16

Surcharge Funded SRM Programs

• Facility maintenance and repair includes — Recurring M&R funds for projects > $150K — Inter Service Support Agreement costs — M&R for the overall sustainment and major construction program including prior year contract M&R modifications, and unprogrammed M&R requirements • Refrigeration equipment maintenance and repair is the refrigeration and heating, ventilation and air conditioning contracts managed by the regions • Refrigeration replacement includes: — Contractor and Government furnished equipment costs associated with current year sustainment projects — Prior year contract equipment modifications and unprogrammed equipment requirements 17

Surcharge Funded SRM Programs

Continued

• Minor construction includes projects under $750K and include design and construction costs associated with current year sustainment projects, prior year contract modifications, and unprogrammed construction requirements and future design • The energy & environmental component includes projects to improve energy consumption and reduce environmental impacts • Major construction includes costs of $750K or more and require reporting to Congress. Costs include design, construction, equipment, prior year contract modifications, AETC salaries and PMAC contract costs 18

DeCA Surcharge Investment Plan ($ In Millions)

400.0

300.0

200.0

100.0

0.0

Total Store Equip Information Technology Repair & Maintenance Major Construction FY 06 237.0

25.1

89.9

85.4

36.6

FY 07 361.3

20.8

80.1

114.3

146.1

FY 08 279.4

24.3

49.6

123.1

82.4

FY 09 279.8

22.9

72.2

122.1

62.6

FY 10 281.4

23.3

65.9

117.1

75.1

FY 11 283.4

23.8

61.6

121.4

76.6

FY 12 286.9

24.3

52.9

122.9

86.8

FY 13 288.5

24.8

41.9

131.1

90.7

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Surcharge Funded SRM Programs

Facility Maintenance & Repair $34.1

33% FY2006 Equipment Maintenance & Repair $14.5

14% Equipment Replacement $14.3

14% Equipment Facility Maintenance & Maintenance & Repair $15.4

Repair 7% $30.7

13% FY2007 Equipment Replacement $42.9

18% Energy & Environmental $2.7

1% Minor Construction $2.1

2% $102M Obligated Energy & Environmental Major Construction $2.7

3% $34.4

34% Minor Construction $1.1

0% $232M Programmed Equipment Maintenance & Repair $16.5

9% FY2008 Equipment Replacement $44.1

25% Facility Maintenance & Repair $32.4

18% Minor Construction $1.2

1% $176M Programmed Energy & Environmental $2.0

1% Major Construction $80.0

46% Major Construction $139.2

61%

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Management Challenges

• Funding — Budget • Shifting emphasis to sustainment reduces number of major projects • Non-construction programs competing for Surcharge reduces available funding • Info Technology Programs • Operational Equipment Programs • Lack of BRAC funding — Higher construction cost trends • Higher costs impact project approval levels/execution timelines • Reduces program 21

Management Challenges

• Planning/Programming/Execution – Basing initiatives • OIGPBS - 6 locations impacted; Ramstein, Spangdahlem, Ansbach, Wiesbaden, Vilseck, Vicenza – Total Cost $92.9 M OIGPBS Impact $77.6 M • BRAC - 10 locations impacted; Fort Bliss, Fort Riley, China Lake, Fort Benning, Fort Carson, Fort Lee, Norfolk, Fort Sam Houston, Moody AFB, Fort Belvoir – Total Cost $189.2 M BRAC Impact $143.9 M • Lack of OIGPBS/BRAC funding disrupted the normal prioritization process • Requires a shift towards more facility sustainment 22

Ongoing HQ Projects All Zones

• Roofs – TREMCO is currently the contractor for this service with one 800 phone number to call if a covered store has a roof leak (1-800-5TREMCO). FY06 Major Maintenance and Repair Projects (>$150K) Handled through HQ DOF • Maintenance and Repair Projects (<$150K) – Handled through Field Engineers (FE) and re-occurring work orders at store level • Major Construction Project – Handled through DeCA’s San Antonio Engineers 23

FY 03 04 04 04 04 04 05 05 06

Major Construction Projects Completed FY2006/FY2007

Location Osan AB/ CDC Whiteman AFB Randolph AFB Bangor NSB Fort Sill Mayport NS NS San Diego Camp Zama Ft McCoy Total Scope Upgrade Upgrade Upgrade Upgrade Upgrade Upgrade Replace Conversion Replace Cost $M 14.1

7.2

12.2

13.6

12.9

12.7 32.6

3.9

5.2

114.4

Completed Oct 05 Oct 05 Feb 06 Mar 06 Sep 06 Oct 06 Dec 06 Feb 07 Apr 07

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Major Construction Projects Under Construction

FY 04 05 05 05 06 06 06 Location Ft Detrick (Replace) Scope CWE M2 3,239 Peterson AFB (Replace/Joint) 9,506 Grafenwoehr (Replace/Joint) 5,162 $M 12.5

22.1

16.1

Rota NAS (Replace/Joint) 5,098 Harrison Village (Replace/Joint) 4,366 Barksdale AFB (Upgrade) 8,770 Keesler AFB (Replace/Joint) Total 12.8

8.0

21.5

8,568 29.0

44,709 $122.0

Expected Completion Jan 08 Mar 07 Jun 07 Sep 07 Apr 07 Apr 08 Jun 09

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FY 2007 Major Construction Program

Scope PA CWE Scheduled M 2 $M $M Award Location Robins AFB (Replace) 1 Dyess AFB (Upgrade) 1 Ft Drum (Upgrade) 1 Richards- Gebaur (New) 1 Keesler AFB (Replace/Joint) 2 Willow Grove 3 (New/Joint) Saratoga Springs (Replace) 2,082 Livorno (Replace) Chievres (Replace) Eglin AFB (Upgrade) Total 7,036 6,619 7,692 1,884 9,218 2,025 2,244 4,088 10,852 16.6

10.6

22.3

8.0

39.0

4.3

7.1

8.9

16.1

15.6

16.6 May 2007 12.5 Jul 2007 22.3 Jun 2007 8.0 Jul 2007 29.0 Awarded 4.3

7.1

8.9

51,715 $144.2 $136.1

On Hold Aug 2007 Sep 2007 16.1 Sep 2007 15.6 Jul 2007

1 2 3 Approved in FY 2007 Construction Report for Cost Increase Funded with Hurricane Katrina Recovery Funds Funds withdrawn and reprogrammed. Placed on hold per Congressional guidance

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Major FY 2008 Construction Program

Location Scope M 2 New Orleans (Replace/Joint) 4,658 Ft Riley (Upgrade) 1 10,152 Ft Bliss (Replace) 1 10,825 PA CWE $M $M 19.7

23.5

31.2

19.7

23.5

31.2

Total 25,635 $74.4

$74.4

1 Requirement is 100% BRAC generated. No BRAC funding has been provided which will disrupt normal construction priority process. Costs recently revised based on A/E cost estimates.

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FY 2009 Major Construction Program

Location Ramstein AB (Upgrade) 1 Scope M 2 7,321 Initial Estimate $M 15.3

Spangdahlem (Replace/Joint) 1 Ansbach (Replace/Joint) 1 Total 4,838 3,303 15,462 20.6

14.1

$50.0

1 OIGSPBS impacted

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Ongoing Region Projects – Zone 6

• FY07 Region Construction Projects in Design/Progress – Randolph AFB • Replace fir pump controller circuit board – Dyess AFB • Replace air conditioning system in the Admin area 29

Ongoing Region Projects – Zone 8

• FY07 Region Construction Projects in Design/Progress – Tinker AFB • Extend exterior storage and canopy – Fort Bliss • Replace main switchgear • Misc. refrigeration repairs 30

Ongoing Region Projects – Zone 8

• FY07 Region Construction Projects in Design/Progress – Holloman AFB • Replace air conditioning unit and warehouse coolers • Paint entry area, hallways, and replace floor tile behind the meat cases 31

Ongoing Region Projects – Zone 9

• FY07 Region Construction Projects in Design/Progress – Buckley AFB • Extend exterior storage and new canopy (Increase in funds to complete project) • Repair sidewalk where sinking and buckling – F.E. Warren • Replace traffic doors in frozen food/dairy • Anti Terrorists Force Protection requires relocation of dumpster 32

Ongoing Region Projects – Zone 9

• FY07 Region Construction Projects in Design/Progress – Fort Carson • Replace meat processing floor (increase in funds to complete the project) • Unforeseen site conditions for meat processing floor (modification) – Fort Leavenworth • Replace freezer door and repair case ventilation • Install rotisserie oven and exhaust hood 33

Ongoing Region Projects – Zone 9

• FY07 Region Construction Projects in Design/Progress – Minot AFB • Replace Sales floor – Offutt AFB • Replace 4 receiving doors and 2 dock levelers 34

Energy & Environmental Program ( FY 2006 Energy Profile) 35

Energy & Environmental Program ( Energy Cost Comparison) 36

Energy & Environmental Program ( Energy Cost Comparison) 37

Energy & Environmental Program (Environmental Management System)

• DeCA’s EMS is a managed process that controls our response to environmental issues to improve DeCA’s use of funds and environmental footprint at each of our facilities. It consists of five elements:

– Policy – Planning – Implementation and Operation – Checking and – Management Review.

38

Energy & Environmental Program (DeCA's’ Significant Environmental Aspects) • Environmental aspect - An element of an organization’s activities products or services that can interact with the environment.

– Solid Waste Disposal Reduction and Recycling Enhancement – Energy and Water Conservation – Affirmative Procurement/Supplier Environmental Performance Packaging – Pesticide/Rodenticide Contracts – Sustainable Design in New Construction and Renovation – Toxic Materials Management – Refrigeration Maintenance 39

Energy & Environmental Program (Environmental Management System)

• CY 2006 EMS Accomplishments:

– EMS Awareness Video Developed – 7 Significant Environmental Aspects identified – 6 of 7 Environmental Management Programs adopted – Legal Registry and Compliance Evaluation – EMS News Release – Secretary of Defense Environmental Award – Federal Environmental Executive compliments EMS – EMS Audit shows improvement 40

Energy & Environmental Program (Environmental Management System)

• EMS Scope of Work for 2007:

– Address 2006 EMS Audit Findings & Recommendations – Environmental Policy & EMS Awareness – EMS Organizational Structure, Roles, and Responsibilities – EMPs – Competency and Training – Revision & Implementation of Emergency Response Procedure – Revision and Implementation of Other DeCA EMS Procedures 41

Equipment Branch Update

46

EQUIPMENT BRANCH (BUYING)

• Minimize store involvement in the equipment ordering process to the maximum extent possible • DeCA WEST Push Package Completed 12-Year Equipment Purchase Schedule, based on store class, workload, and equipment life cycle • Push plan is a living document: out of cycles, annual store review, DOLM site visits each 3 – 5 years 47

EQUIPMENT BRANCH (BUYING)

• Ten stores per year for replacement by departments: gondola shelving, bakery, furniture, warehouse, etc. • DeCA DOLM will budget for equipment • DOLM is responsible for the DeCA vehicle and Voyager Fuel Card Programs • Paging/Music system & CCTV system site survey 48

EQUIPMENT BRANCH (MAINT)

• DOLM is now active as the single point of contact for maintenance issues for operational equipment normally provided by this branch • DOLM will review maintenance needs for cost effectiveness and repair/replace decision. Requirements will be input or passed for action by DOLM • DOLM now responsible for the $28,000,000 DeCA surcharge equipment maintenance budget. Tasked to review all maintenance requirements for cost effectiveness 49

EQUIPMENT BRANCH (MAINT continued)

• Manage ACED, Automated Commissary Equipment Description Web Site • DOLM to update the 450+ Commissary Equipment Descriptions (CEDs) in 2007 • DOLM coordinates GF/GI Equipment and specifications for construction projects 50

Questions?

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