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PRESIDENT'S MESSAGE

Outlook on the shutdown happening and, if it happens, how it would unfold

Things are pretty volatile on the shutdown as you know and forecasters oscillate daily on their predictions. We simply can't say at this point whether Congress will move fast enough to fund the Government and avoid a shutdown. Various proposals are circulating, the latest, originating in the Senate to provide a "Continuing Resolution" to fund the Government through Dec. 11. But, it's too early to tell where this will end up.

In any event and even if the Government shuts down, there is an active debate ongoing on what activities will remain open.

If Congress doesn't get a deal, broadly here's how it works based on past experience:
  • The Government runs out of money.
  • NAF programs are not effected and military are still paid.
  • DoD keeps half of their 750,000 employees working under various authorities but defers salaries.
  • The other half of DoD employees are furloughed.
  • Commissaries overseas stay open.
  • Existing authority and new authority is invoked, employees are called back from furlough and commissaries in the U.S. open.
Exchanges and MWR programs

Exchanges or other nonappropriated fund programs are not affected and on-base MWR programs that are necessary to provide for programs that remain open during any shutdown.

Commissaries

On commissaries, it is a fair certainty that overseas stores would remain open. The question is stateside commissaries.

Because of the 2013 shutdown and precedent that was created on U. S. commissaries, there is a pattern that suggests the Administration will use its authorities and allow U.S. stores to continue to operate, but there are no guarantees. We certainly are making the argument for keeping the stores open.

We have communicated our concerns to Pentagon and Administration (OMB, DoD) folks on the particular damage that would cause to suppliers because of our long pipeline, especially with regard to certain commodities with long lead times and perishability. We have prepared a letter to the Secretary of Defense along the lines of the letters that were sent in 2013, and will launch that early next week depending on the political conditions determining a shutdown.

We have been and will be actively communicating to the Administration and to Congress our belief that commissaries are an essential (and "excepted") activity that should be allowed to continue in the event of a shutdown. We understand that DeCA is also communicating with the DoD. So far DoD has not set in motion detailed and comprehensive planning for a shutdown and has issued no guidance on commissaries.

Following is a summary of the wide body of administrative and Congressional guidance argues in favor of keeping all commissaries open.

One law that is on the books: The Feed and Forage Act, gives the Secretary of Defense the authority to provide for activities for clothing, subsistence, forage, fuel, quarters, transportation and medical and hospital supplies. The Secretary in consultation with the Office of Management and Budget can elect to include commissaries under this Act.

Outside the Feed and Forage Act, the broad authority to continue some activities during a lapse in appropriations is generally governed by the Anti-deficiency Act, and reflected in Office of Management and Budget guidance to executive agencies. During the last shutdown, roughly half of DoD's 750,000 employees were covered under existing authority — so they continued to work but were not to be paid until funding started flowing. Essentially and subject to review by OMB, each agency is responsible for making specific determinations on which activities may continue during a shutdown and which may not. They then determined that overseas commissaries would remain open.


In the 2013 shutdown, the decision was made eight days into the shutdown to re-open commissaries in the U.S. due to concerns raised by ALA and from other sectors. Next, the Pay Our Military Act was passed and the Administration interpreted this Act as also permitting the recall of those DOD civilians "whose responsibilities contribute to the morale, well-being, capabilities and readiness of service members." Under DOD's revised contingency plan reflecting this interpretation of the Pay Our Military Act, DOD civilians were recalled from furlough if they "contribute support to service members and their families on an ongoing basis" and commissaries were specifically mentioned.

And, if this is not enough, there is the fact that commissaries are part of the "Defense Working Capital Fund" and, as such, can use funding carried over from prior years or can continue to operate if there are supporting other defense programs that are remaining open.

We are in touch with the relevant Congressional committees to see if they are going to enact an updated version of the Pay Our Military Act. We don't know yet because, right now, Congressional focus is not on another version of the Pay our Military Act but rather getting a "Continuing Resolution" to keep the entire government running. We hear that a 2016 version of the Pay Our Military Act is in the works as a back-up.


Contracts

We need to stay tuned to see what guidance goes into effect this year. We are in unchartered territory because if the stores close: How can commissary contractors fulfill their obligations if they can't ship? In the 2013 shutdown, guidance on "excepted activities" included the following language:
"Contractors performing under a contract that was fully obligated upon contract execution (or renewal) prior to the expiration of appropriations may continue to provide contract services, whether in support of excepted activities or not. However, new contracts (including contract renewals or extensions, issuance of task orders, exercise of options) may not be executed unless the contractor is supporting an excepted activity. No funds will be available to pay such new contractors until Congress appropriates additional funds. The expiration of an appropriation does not require the termination of contracts (or issuance of stop work orders) funded by that appropriation unless a new obligation of funds is required under the contract and the contract is not required to support an excepted activity. In cases where new obligation is required and the contract is not required to support an excepted activity, the issuance of a stop work order or the termination of the contract will be required."

"The Department may continue to enter into new contracts, or place task orders under existing contracts, to obtain supplies and services necessary to carry out or support excepted activities even though there are no available appropriations. It is emphasized that this authority is to be exercised only when determined to be necessary where delay in contracting would endanger national security or create a risk to human life or property."

We don't know yet whether or how DeCA implements this contract 2013 contract guidance if and when a shutdown occurs and guidance is issued on 2016 implementation.


Patrick B. Nixon
President, American Logistics Association




WASHINGTON UPDATE


New commissary reform plan to protect shopper savings
Stars and Stripes
The Department of Defense is modifying its approach to reform the commissary benefit with new guarantees to preserve overall shopper savings and also to avoid pay cuts for current employees, according to a source who has seen fiscal 2017 budget planning documents.
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Shutdown looms but Congress has plenty of distractions
Military Times
Congress has only seven working days left to avoid a government shutdown, and a host of distractions in coming days will make that work even more difficult. Senate Majority Leader Mitch McConnell, R-Ky., has promised that lawmakers will find a way to avoid a shutdown, citing the damage that the funding gap could cause in a host of federal operations, including defense and Veterans Affairs programs. Amid all the political sparring, defense lawmakers also are working to finalize the annual defense authorization bill, which would mandate a host of military benefits updates and overhaul the military retirement system. Conference committee members have described that work so far as moving slowly but steadily.
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Senate maneuvers to avoid shutdown
Defense News
U.S. senators are poised to consider a stop-gap funding bill that keeps the federal government running through Dec. 11 and strips funding from Planned Parenthood — expected to set the stage for a more viable bill.
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Pentagon moves into uncharted waters
The Hill
While lawmakers only intend for their stopgap funding measure — known as a continuing resolution — to last through mid-December, the Army is bracing for the possibility that funding is eventually put on autopilot for a whole year, according to official documents obtained by The Hill.
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ALA/MCS IMPACT WORKSHOP


ALA/MCX Impact Workshop — Oct. 29
ALA
We are excited to announce a new Workshop, dedicated exclusively to MCX!

On Thursday, October 29 — just after the ALA Convention — ALA and MCX will conduct the "first-ever" ALA/MCX Impact Workshop.

This event is intended specifically for ALA members who supply MCX, and designed to be a collaborative and interactive exchange of ideas. Key buyers and divisional managers from MCX will be attending and participating in an array of working and briefing sessions.

We all know the environment in the Military Resale Channel has changed. Keeping up to date on those changes is critical to your business success! Please see the preliminary agenda for more details and register for this must attend event today!

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MARK YOUR CALENDAR

Specific information on upcoming ALA events is posted regularly on the ALA website. To learn more about each event, please click the following links:

Date Event
Oct. 1 Hampton Roads ALA Golf and Oyster Roast Chuck Johnson Memorial
Oct. 26-28 68th Annual Convention
Oct. 29 2015 ALA/MCCS Impact Workshop
Dec. 3 NY ALA Holiday Luncheon


COALITION UPDATE


Sweeping commissary proposals worry watchdogs, unions, manufacturers
Military.com
A series of new proposals issued this month in a long-anticipated study on the military commissary system has raised alarms among commissary watchdogs, union officials and industry representatives. The report recommended a series of changes that would allow the commissary system to set its own prices based on region, reduce employee wages and benefits and consolidate operations. "The report's recommendations need to be challenged," said Candace Wheeler, a spokeswoman for the Save Our Benefit coalition. "The Pentagon shouldn't take cuts ahead of the system's ability to absorb them without impacting patrons."
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Give troops the pay and benefits they deserve
Military Officer's Association of America
The Senate is all that stands between troops and the pay and benefits they actually deserve. Military families have done enough and the future force is at stake. Look at the situation from the troops' perspective: frequent and dangerous long deployments; lower pay; higher costs for food, housing and health care; not to mention the uncertainty of getting a pink slip downrange — or worse. Is this the kind of environment you'd want to work and live in or have your spouse exposed to? Pitting readiness against personnel is a false choice and a breach of faith. The solution is simple: Congress needs to support both readiness and the people programs necessary to sustain the force. It is not a case of one or the other.
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How Congress quietly killed military healthcare reform
The Hill
Service members need portable benefits to take with them throughout their careers, including healthcare. In the end, conversations about cost savings in military compensation are largely treading water unless they propose military healthcare reform. Other areas of compensation — basic pay, commissary benefits or Basic Allowance for Housing — all enjoy near-unanimous support among military families. Reductions to each benefit were proposed by different stakeholders in this year's National Defense Authorization Act process, and each had met stone walls of resistance from Congress, advocacy groups, or the military itself.
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Guard commissary privileges
Air Force Sergeants Association via DVIDS
It was 12 years ago that, after many years of effort, AFSA and its Coalition partners achieved year-round commissary benefits for members of the Guard and Reserve. An article in DVIDS focusing on the benefit specifically for Guardsmen reports, "Since the passage of the National Defense Authorization act of 2003, National Guardsmen, retirees and their authorized family members have enjoyed unlimited access to the nation's military commissaries. Before 2003, Guardsmen were limited to 24 commissary shopping days annually."
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COMMISSARY ANNOUNCEMENTS

Commissary Web Posts

The following commissary items were posted to the ALA Website between 10 AM, September 17, 2015 and 10 AM, September 24, 2015:

PROMOTIONS:
- Chill/Freeze/Pre-Packaged Meat Seasonal Package, Update #3.

NOTICES TO TRADE (NTT)
- 15-96, Category Review Notification – Laundry Detergent.
- 15-100, Selection of Suppliers for DeCA Brand Name Fresh Chicken Merchandising Program (NTT 15-43, Addendum NTT 15-83).

MISCELLANEOUS:
- Adds/Changes/Deletes for Week 15-38.
- CRV Values as of September 20, 2015.




COMMISSARY NEWS


PepsiCo's big spending on R&D is paying off
TheStreet
The Quaker Oats brand, acquired by PepsiCo for about $13.4 billion in 2000, has long been known primarily for its steel-cut oats that take 30 to 45 minutes to cook. But now, the 114-year-old Quaker Oats brand is trying to offer increasingly time-starved consumers cups of instant oatmeal and granola bars.
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Coca-Cola has spent millions on health research, fitness programs
The Wall Street Journal (tiered subscription model)
Coca-Cola Co. said it has spent almost $120 million to fund scientific research as well as health and fitness programs in the U.S. since 2010, a disclosure that is part of the soda giant's promise to be more transparent after critics accused it of playing down the role of sugary drinks in obesity.
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Grocery trade groups reviewing new FDA menu guidance
Progressive Grocer
Industry trade groups are busy studying exactly what new U.S. Food and Drug Administration draft guidance regulating menu calorie counts means for their grocery retailer members.
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Wave of the future: General Mills looks to e-commerce for sales growth
Food DIVE
General Mills is investing in its e-commerce channel, which the company calls its "fastest growing food-channel," said Shawn O'Grady, General Mills' president of sales and channel development, during the company's recent earnings conference call.
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Natural e-retailers focus on service, value
Supermarket News
Natural and organic e-retailers are balancing price and service as they strive to make gains against both physical stores and larger online competitors.
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Americans wasting nearly half of the most expensive grocery item they buy
TakePart
The United States is one of the largest seafood markets in the world, buying 4.7 billion pounds in 2011 — second only to China. Not all of that fish, however, is consumed: According to a study conducted by the John Hopkins Center for a Livable Future, nearly half — 2.3 billion pounds — ends up in the garbage.
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Report: Online offers 'huge opportunity' for CPGs
Supermarket News
An online presence represents "a huge opportunity" for CPG companies to develop a better understanding of consumers, according to a report by just-food.com, a U.K.-based research company. The ease with which products can be found on e-commerce sites is a decisive factor in successful online merchandising of packaged foods, the report noted.
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General Mills places big bet on gluten-free Cheerios
Fortune
The cereal maker is introducing gluten-free Cheerios in a move aimed at perking up its cornerstone business and widen its array of healthier food.
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Study: Grocery shoppers create social recipe
Chain Store Age
Social media plays an important role in the grocery shopping process. According to a new study from market research firm Packaged Facts, "Retail Food Marketing Trends in the U.S.: Technology, Mobile and Social Media," a majority of grocery store shoppers use social media to get recipes. More than half of grocery store shoppers also use social media to compare prices between food brands, or access a supermarket website to check prices or find products or a sales flyer.
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EXCHANGE NEWS


All Hawaii NEX locations plastic bag ban ready
Ho'okele
The Navy Exchange Pearl Harbor officially is plastic bag ban ready. As a U.S. Department of Defense entity, NEX is not required to comply with the state of Hawaii ban. However, in order to contribute to Hawaii's environmental objectives, the NEX has chosen to voluntarily comply with Chapter 9, Article 9 of the Revised Ordinances of Hawaii ban on plastic bags.
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Contracts for Sept. 21
U.S. Department of Defense via noodls
Raytheon Co., Raytheon Missile Systems, Tucson, Arizona, has been awarded an $180 million fixed-price-incentive, firm target, indefinite-delivery/indefinite-quantity contract for Advanced Medium-Range Air-to-Air Missile program support and annual sustainment. Contractor will provide program support, service life prediction program and contractor logistics support services ...
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INDUSTRY NEWS


Wal-Mart to hire 60,000 workers for holiday rush
The Wall Street Journal (tiered subscription model)
Wal-Mart Stores Inc. said that it plans to hire 60,000 seasonal workers for the coming holiday season, matching its hiring level from last year.
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Steve Madden, Kate Spade top the fastest growing retailers in 2015
Forbes
Despite sluggish retail growth earlier this year, consumer spending gradually is picking up in part thanks to low gas prices. To find the fastest-growing retailers leading this wave, we screened U.S. apparel and footwear companies with a market cap of at least $1 billion and ranked them based on average same-store sales growth in the first two quarters of 2015.
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Challenger: Holiday retail hiring expected to be flat in 2015
The Wall Street Journal (tiered subscription model)
Holiday hiring by U.S. retailers is expected to be flat in 2015, partly owing to changing shopping habits and job growth in the sector earlier this year, according to global outplacement firm Challenger Gray & Christmas Inc.
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Is it time for retailers to phase out the on-call shift?
By Danielle Wegert
Employees in the retail industry are likely to earn hourly wages — and these workers are also likely to live paycheck to paycheck. Every hour can make a difference when it comes to paying bills and keeping food on the table. However, these employees are also likely to have erratic schedules with less stability than other professions thanks to scheduling tactics like on-call scheduling. This not only makes income uncertain for the employee, but it can also cause work-life problems.
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Missed an issue of Executive Briefing? Click here to visit Executive Briefing archive page.


Survey: Holiday shopping season in full swing for 32 million Americans
USA Today
Though summer hasn't officially ended, holiday shopping is already on millions of Americans' to-do lists. About 1 in 7 American adults have already started their holiday shopping, according to a CreditCards.com survey of 1,004 adults conducted over the Labor Day weekend.
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What does Amazon's Prime Day mean for retail?
NRF
Amazon's Prime Day has come and gone, and depending on which pundits are sounding off, the retail giant's 20th birthday celebration was either a solid success or a mixed bag of outcomes.
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How your buying behavior can predict your gender
CNBC
Let's pretend you just tested out a new soap, and were pretty pleased with the results. Not only did your skin feel fresh afterward, but it left you smelling good hours later. Now, how many bars of this particular soap will you buy? Just one to tide you over? Or maybe a dozen so you don't run out? As it turns out, the way you answer could depend on your gender.
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Are jeans falling out of fashion? Levi Strauss reports slowing sales
The Telegraph
Levi Strauss, maker of the world's most famous blue jeans, has said that sales of belts and other accessories are now growing significantly faster than sales of its denim clothing for the first time, amid stiff competition from the sportswear market.
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Report details 4 ways retailers build customer loyalty
Chain Store Age
There are four key elements that sustain a customer's loyalty over the long term (and price is not one of them), according to the newest research from Synchrony Financial.
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TRENDING ARTICLES
Missed last week's issue? See which articles your colleagues read most.

    Soldier receives free commissary groceries for a year (DVIDS)
The 6 issues that could cause a government shutdown (The Washington Post)
Why ALDI is the grocery store of the future (ZACKS)
Category expansion continues for WhiteWave Foods (Food Business News)
Week ahead: Defense negotiators search for deal (The Hill)

Don't be left behind. Click here to see what else you missed.


C-STORE NEWS


SABMiller gives AB InBev bid a 1-month shelf life
CSP
SABMiller is giving Anheuser-Busch InBev one month to submit an acquisition bid following speculation a merger offer between the two brewers was imminent.
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Budweiser, Miller eyeing possible merger
Daily Republic
The makers of Budweiser aren't satisfied with being the kings of beer. They want an empire. Anheuser-Busch InBev, the world's biggest brewing company and the owner of Budweiser, announced it wants to buy SABMiller, the second-largest brewer — and the maker of long-time rival brand Miller Genuine Draft.
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Slideshow: Wawa: Inside an upgraded icon
CSP
Wawa convenience stores announced in February that it would remodel its entire store base to introduce new products and improve efficiencies. The Wawa, Pennsylvania-based chain granted CSP exclusive access to the "whys" behind the three-year Wawa Remodel Program, what will and won't change in the upgraded stores and a sneak peek into what we can expect from the retailer moving forward.
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Mapping the path to purchase
CSP
For the past six years, VideoMining Corp., State College, Pennsylvania, has harnessed heat-mapping technology to track convenience-store customers' shopping behavior in its annual C-Store Shopper Insights program. For the 2014 program, eight retail chains had one or more stores outfitted with ceiling-mounted cameras to follow their customers' journey through the aisles.
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MWR NEWS


Family tweets? DoD tries to get word to families
Military Times
Over the next few months, service members and families will see a new social media effort to get the word out about available resources designed to help them as they navigate military life. The first two programs being launched under this digital marketing strategy are aimed at preventing child abuse and neglect, and increasing financial readiness, said Rosemary Williams, deputy assistant secretary of defense for military community and family policy, told the Defense Department's Military Family Readiness Council.
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AAFES generates money for quality-of-life programs
The Gold Standard
Soldiers and their families shopping and dining at Army and Air Force Exchange Service stores and restaurants on Fort Knox generated more than $1.10 million last year for Army quality-of-life programs.
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Kansas: FLFHC welcomes new community director
Fort Leavenworth Lamp
Fort Leavenworth Frontier Heritage Communities is welcoming its new community director, Haylee Beard. Beard comes to Fort Leavenworth Frontier Heritage Communities with many years of experience in property management, with her most recent position as a regional property manager, overseeing multiple properties in Kansas and Florida.
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Washington: Golf manager to retire after 42 years of service
The Northwest Guardian
The thing about Mike McDonald is that he aims to please the people who come into Eagles Pride Golf Course on Joint Base Lewis-McChord, Washington. He'll have fun with you and have a friendly back-and-forth, but only after he gets to know you. In 42 years of civil service, McDonald has a long list of regulars that include service members, veterans, family members, reservists and just about every other facet of the local community. That's what he will miss the most once he retires from his work on JBLM as the course manager and director of golf on the installation Sept. 30.
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