The budget mess and military resale:
There is a flurry of speculation on what will come next in the arena of budget reductions, when they will happen and what the likely impacts are. We will try and layout the likely scenarios here and the possible impacts on military resale.
Annual resale appropriations for military resale funding is approximately $1.6 billion. This includes about $1.3 billion for commissaries and another $250 to $300 million to support exchanges (primarily for shipment of products to overseas bases). An additional $16 billion is provided through products and services charged to patrons and net proceeds from operations (about $700 million) is used to provide dividends to make capital purchases in commissaries and exchanges and provided dividends to support MWR programs.
There are several bills and actions that will determine the funding levels for military resale.
Annual authorization and appropriation bills normally lay out policy and allocate funding for these programs. For fiscal year 2012, commissaries and exchanges were funded at the levels requested by the administration and practically funded commissaries and exchanges at prior year levels with some relatively minor adjustments. However, within the Pentagon and the administration, nearly $450 billion was reduced from the projected Defense levels in the next ten years with another $350 billion taken "internally" by the Pentagon to be applied to other high priority Defense programs. Military resale programs are going to face heavy competition for other Defense priorities at these levels.
Compounding the budget program was a major piece of legislation that was enacted in August of 2011 was the Budget Control Act of 2011. This is the legislation that raised the debt limit (at least enough to last until 2013). This legislation established binding caps on annual appropriations in the areas on discretionary spending (including defense). This is intended to generate $900 billion in savings by 2021. This bill also established the supercommittee. The supercommittee was tasked with achieving an additional $1.2 trillion in savings over the next 10 years. These are reductions over and above the $900 billion previous reductions. The supercommittee failed to meet its goals and the automatic budget triggers are set to kick in.
How the 2013 sequestration will work:
The cuts resulting from the failure to enact sufficient savings will first take effect in January 2013 (which is actually the beginning of the 2nd quarter of the government financial year that begins on Oct. 1, 2012.) Under the formula that the Budget Control Act specifies, defense programs would be cut by a total of $54.7 Billion each year from 2013 through 2021.
I am only going to focus on the defense equation at this point because it is that impact that will hit military resale. It is important to note the major role that will be played by the Appropriations Committees in this process. They will decide how to live within established caps.
The defense sequestration of $54.7 in 2013 would occur through across the board proportional reductions in the funding provided in appropriations bills. The Appropriations Committees will decide how best to allocate allowed funding. The 2013 reductions will be the only year when the reductions will be allocated against already appropriated defense spending so it needs to be viewed differently. The president can exempt some or all of military personnel funding from sequestration. This however would not change the total amount of defense reductions, only where they come from.
Where does military resale stand?:
There were a series of amendments considered during the passage of the Senate National Defense Authorization Bill that called for significant changes to the military resale system. Through a dedicated and focused government relations strategy, these proposals did not make the defense bill. There are still some issues lingering that will have to be addressed during the time of committee mark-up between the Senate and the House in early 2012. The focus at this point must be directed to the budget process. The DoD has prepared a 2013 budget that meets the requirements of the first phase of the Budget Control Act of 2011 that is the DoD portion of the $900 Billion in required savings. This budget calls for efficiencies to continue to be generated by the military resale system but no major change in the organization of the business model. The sequestration reductions have not been incorporated into the current budget. This is where it gets a bit technical. The White House could give congress some time to work things out or it could require the proposed budgets from all departments and agencies to be submitted in accordance with the guidelines of the Budget Control Act to include the impacts of required sequestration. In fact this could be the law but we are not in a position to make that call.
This set of circumstances is clearly the most serious challenge facing the military resale business channel in history.
This is not merely a one year challenge but a 10 year gauntlet that will be run every year as the reductions continue to mount. In a report issued the same day the supercommittee failed to reach an agreement, the Center for Strategic and International Studies recommended eliminating the taxpayer subsidy for commissaries. A report prepared by the House Armed Services Committee Staff included draconian actions like closing exchanges. These are real proposals.
Already, and just in the past year, associated with the enormous budget pressure we have seen several efforts to remove funding for resale, including:
The ALA is working worked an aggressive government relations strategy to combat each of these proposals and build support across the board for our programs. Just recently, we moved to get support to block an amendment in the Senate that would have adversely impacted military resale during the deliberations surrounding the NDAA. We continue to work a four corner strategy to solidify our relationships with the key members of the Senate and House Authorization and Appropriations Committees. We also continue to expand our reach into other Committees with jurisdiction over related issues including House Financial Services, Senate Finance, House Ways and Means and House and Senate Government Affairs. But we realize that the nature of this threat is far different and greater than any previously encountered so the regular course of action will not be enough.
We also have begun a major effort to provide an economic argument for these benefits in addition to the traditional compassionate arguments. In effect, we are saying that any reductions will have an adverse effect elsewhere in the budget and will therefore not yield savings.
We have ramped-up our efforts to tell our story in the halls of the Pentagon and in the executive office of the president.
Now, we have added yet another dimension to our efforts.
The ALA realized that any call to action must include the beneficiaries of the military resale programs if it is to maximize its effectiveness hence the establishment of the ALA affinity group, The Coalition to Save Our Military Shopping Benefits. This organization with its separate Board of Directors and budget is intended to reach-out to nonmembers, patrons and employees of the resale system and educate, engage and when necessary activate these groups in support of the military resale programs. To date, much has been accomplished:
There is a place in this campaign for everyone and there is a need for everyone. We will need every segment of our industry to participate if this strategy is to be successful.
What is the best way to Save our Military Shopping Benefit? INCREASE USAGE and INCREASE SALES — thereby demonstrating that it is in high demand by the patron base.
We will continue to provide updates as things progress. Much has been accomplished in a short time, much remains to be done. These are the best customers in the world and they deserve the best quality of life possible...we must prevail.
Patrick B. Nixon
Pentagon conducts budget war games
The Washington Times Share
The nation's highest-ranking military officers convened at the Pentagon recently to discuss the smaller armed forces they will inherit once $450 billion in cuts commence in 2013. A defense source briefed on the discussion with Defense Secretary Leon E. Panetta said scenarios such as confronting a world crisis with nine aircraft carriers instead of the current 11 were discussed. More
Obama administration urges flat 2013-2017 defense spending plan
Bloomberg News Share
The White House and Pentagon are near agreement on a draft five-year defense budget that flattens expenditures though 2017, with the lowest war spending since 2004, according to an Office of Management and Budget document. The OMB also endorses a Navy plan to delay by two years start of construction on the Huntington Ingalls Industries Inc. CVN-79 John F. Kennedy aircraft carrier, and provides $508 million to bankroll the new U.S. Office of Security Cooperation in Iraq. More
No defense deal, but compromise may be at hand
National Journal Daily AM Share
Congress is unlikely to pass the controversial defense authorization bill this week, according to several senior committee aides, but House and Senate conferees on the bill are hoping to secure a floor vote before recess, which could begin as early as next week. (Free subscription required.) More
Experts: DoD could slash 150,000 jobs
Federal Times Share
A reduction in force. More base closings and consolidations. Big cuts to defense intelligence agencies. All those options affecting the Defense Department's vast civilian workforce would be on the table if automatic across-the-board budget cuts go forward, experts predict. That workforce, the largest of any federal agency, totals about 790,000, according to the most recent DoD figures. During the next decade, its size could tumble 20 percent to about 630,000, the smallest since the Defense Department's creation in 1947, under a scenario outlined last month by Defense Secretary Leon Panetta in a letter to Congress. More
Leaders of 12 Texas military bases form a united front
Fort Worth Star-Telegram Share
Commanders of Texas' 12 major military installations have formed the Texas Commanders Council, an informal group that hopes to unify a message to legislators next year on issues of vital importance to their bases. "We would like to speak with one voice in the state of Texas," said Capt. Robert Bennett, commander of Naval Air Station Fort Worth, who invited the other commanders to form the group. "We would like to go to the Legislature and say, 'These are three or four major challenges, and we could sure use some help on them.'" More
Defense bill conferees meet; hope bill ready by weekend
AOL Defense Share
The House named its conferees to handle negotiations over HR 1540, as this year's defense authorization act is fondly known, and lawmakers from the opposite sides of the Capitol met this afternoon to hammer out a final bill. One Hill source said the discussions were, "moving quickly. We hope to have the language locked down by this weekend." More
Senate approves $662 billion defense bill
The Boston Globe Share
Ignoring a presidential veto threat, the Democratic-controlled Senate last night overwhelmingly approved a massive $662 billion defense bill that would require the military, not police, to hold suspected terrorists linked to Al Qaeda or its affiliates, even those captured on U.S. soil. More
Battle over military health care premiums slows for now
The Washington Post Share
Now that the sweeping defense authorization bill for 2012 has passed the Senate and House, the fight over Tricare, the health insurance plan for the military, has reached a truce — for the moment. House and Senate negotiators are working out differences in the defense authorization bill before it goes to President Barack Obama, but Tricare is not among the contested issues. More
Pentagon vows to keep defense industry healthy
Further massive cuts in U.S. defense spending triggered by the failure of lawmakers to cut deficits would emasculate the U.S. defense industrial base, a senior Pentagon official said. The Defense Department was already doing its share to reduce federal deficits and Congress should redouble its efforts to solve the nation's fiscal crisis, Brett Lambert, U.S. deputy assistant defense secretary for manufacturing and industrial base policy, told an investor conference. More
White House renews veto threat on defense bill
The Associated Press via Yahoo News Share
The White House recently accused the Democratic-controlled Senate of "political micromanagement" at the expense of national security after it approved legislation requiring military custody of suspected terrorists, even those captured within the U.S., and indefinite detention of some without trial. More
Pentagon sides with White House against eliminating automatic cuts
The Pentagon is wading into the political fight over how to close the nation's yawning budget deficit, with senior officials indicating that they oppose the growing congressional efforts to shield the Defense Department from the hundreds of billions of dollars of mandatory cuts triggered by the failure of the congressional supercommittee. More
White House unveils 2013 defense budget plan
Army Times Share
The Obama administration is planning for a $523.42 billion base defense budget in 2013, with an additional $82.53 billion for contingency operations, a combined one-year reduction of about $47 billion in the base budget and an assumption of a $35 billion drop in operating costs in Iraq and Afghanistan from what was previously planned. More
2012 food trends to watch
Supermarket News Share
The year 2011 brought higher food prices at unprecedented levels, crops and livestock destroyed by global weather catastrophes, nations at war over the lack of food supplies and more food recalls from unique points of origin. What's in store for 2012? More
Shoppers want a deeper grocery relationship
Progressive Grocer Share
Consumers are interested in more than a simple seller-to-buyer relationship, according to Innovation Trends, Attitudes and Opportunities from the International Dairy-Deli-Bakery Association. For this new research, IDDBA commissioned Datassential to explore consumer attitudes and interest in various forms of innovation. A key finding shows that grocery stores have an opportunity to expand their roles in shoppers' lives by presenting themselves as stewards of their communities and conduits between food sources and end consumers. More
Clark's Market taps locally produced clean energy
Gourmet Retailer Share
Clark's Market, a community-based independent with eight stores in western Colorado, is teaming up with local solar garden developer the Clean Energy Collective to reduce energy costs and its environmental impact by shifting to locally-produced clean energy with the purchase of solar power in the CEC's community-owned solar gardens. More
Report: Some children's cereals may have way too much sugar
Los Angeles Times Share
Before you pour your child a heapin' bowl of sugary cereal, read this: The Environmental Working Group has just come out with its list of the 10 worst children's cereals. Your child's favorite might be on it. More
Safeway offering holiday assistance
Store Brands Share
In a recent survey, Pleasanton, Calif.-based Safeway found that 75 percent of women counted perfecting their holiday decor and meal menus among the most demanding aspects of holiday entertaining. Moreover, 58 percent of women said their biggest holiday regret is being so busy that they don't get to enjoy the food or company. To help transform the holidays from ordinary to extraordinary this year, Safeway said is providing shoppers with a variety of fresh ideas, tips and tricks from top experts via the new Safeway Holiday Inspirations website. More
8 ways to make grocery shopping more sanitary
Mother Nature Network Share
You may wash your hands often, closely scrutinize expiration dates and thoroughly rinse your produce prior to eating it, but are you doing enough to protect yourself from grocery store germs? More
The following commissary items were posted to the ALA website as of 10 a.m., 8 Dec 11:
DP #1, Alaska Shipper Quantities.
DP #2, CONUS Promotion & Shipper Quantities.
DP #5, WW Promotion Package, Frozen Food Month Features.
Fathers Day Far East & Alaska Quantities.
NOTICES TO TRADE
12-11, Category Review Schedule 2012.
12-17, Gelatines and Puddings.
Adds/Changes/Deletes for Week 11-49.
FDS Distributor Codes dated 11/29/11.
FDS Distributor Change Forms for East, Midwest/West and Alphabetical Listing.
Guard & Reserve On-Site Sale Schedule updates.
Guantanamo Bay NEXMART Reset
Industry support is being requested by DeCA for an upcoming reset at Guantanamo Bay NEXMART in May 2012. Due to the sensitivity of this location and required planning, a strict timetable will need to be followed. DeCA and GITMO store management feel that 15 to 20 people would be needed to complete the store reset. A passport or military ID WILL BE REQUIRED for this trip. Flights are limited and depart from either Miami or Ft. Lauderdale at a cost of approximately $300 round trip. Below you will find additional information with regards to timing, transportation and accommodations.
Tentative Reset Dates: May 20-22, 2012
Travel Dates Dictated by Available Flights: Arrive GITMO May 17, 2012, depart GITMO May 23, 2012.
Lodging: $50/night. Rooms contain kitchenettes.
Meals: Full access to all base facilities to include, the Galley (lunch/dinner $4.25 & breakfast $2.65), two full service restaurants and fast food (McDonalds and Subway), O'Kelly Pub and Windjammer Cafe.
Transportation at GITMO: All transportation will be provided to and from the airport to the base.
Clearance Data: Naval Station Entry Clearance Request form must be submitted and approved by required deadline.
Internet and cellphone service: There is no cellphone service and limited Internet service.
Misc: This is a closed base but you will have access to all recreational facilities, bowling, snorkeling, etc. Base rental cars are available as well as a base bus service that has a stop at the lodge.
Trip POC: Mike Hatfield, S & K Sales Co, 804-647-1141, email@example.com.
TIMETABLE: Dec. 16, 2011 - Interested participants contact POC by this date with their intent to attend the reset. Feb. 25, 2012 – Navy Station Entry Clearance Request form is due back to POC Mike Hatfield. March 22, 2012 – final confirmation of participants. Room reservations will be set up based on final confirmation list. May 17, 2012 – travel to Guantanamo Bay. May 20-22, 2012 – NEXMART reset. May 23, 2012 – Depart Guantanamo Bay.
People interested in supporting this reset should send their name NLT Dec. 16, 2011 to the Commissary Council POC – Mike Hatfield, S & K Sales Company, via email to firstname.lastname@example.org, or call him at 804-647-1141. As mentioned above it is anticipated that 20 people will be needed. Mike will maintain a sign up list by order of names received and also maintain alternates. After he receives enough names and before Feb. 1, 2012, Mike will provide those selected to attend with all the information they will need (air fare, clearance and room reservation) to complete the process.
March 7-9, 2012
ALA chapter news
The Hampton Roads ALA had a very successful Benefit Luncheon last week in Virginia Beach. Over 145 guests were on hand to hear NEXCOM SVP Tess Paquette and AAFES SVP LG Dan Tompkins' presentations. Over $32,000 was raised with $10,500 each going to AREA, NEREA and the HRALA Scholarship Programs.
Bottom Dollar stores to expand
The News & Observer Share
The Belgian conglomerate that owns Food Lion plans to open hundreds of Bottom Dollar grocery stores, part of a strategy to increase sales and compete with low-cost grocers such as Aldi and Wal-Mart. More
US online sales a record $6 billion in week after holiday
The Associated Press via Houston Chronicle Share
U.S. shoppers are still spending heavily online after a record-busting "Cyber Monday," research firm comScore Inc. said. The firm, which tracks Web use, found shoppers spent nearly $6 billion online Nov. 28-Dec. 2 — a record. More
Retail: Consumers no scrooge with sale of seasonal decor in US
Bloomberg Businessweek Share
With little to cheer about these days 8.6 percent unemployment, fears of European contagion Americans are splurging on LED lights, 16-foot-tall inflatable Santas and pre- decorated artificial trees. This year U.S. consumers will spend $6 billion on decorations, the most in at least seven years, according to the National Retail Federation, which began tracking the data in 2005. More
JC Penney buying stake in Martha Stewart Living for $38.5 million in effort to revive its brand
The Washington Post Share
J.C. Penney Co. is buying a minority stake in Martha Stewart Living Omnimedia Inc. for $38.5 million, the latest move by the department store to attract new customers and perk up lackluster sales. Penney is acquiring a 16.6 percent stake in the media and merchandising company. The Plano, Texas, company will create mini-Martha Stewart shops within its department stores and a joint website. More
Wal-Mart launches first social networking app
Wal-Mart Stores Inc, the world's largest retailer, unveiled its first social-networking application late on Nov. 30, in a move to latch onto one of the hottest trends in e-commerce. Wal-Mart launched Shopycat, which uses Facebook data to recommend gifts to consumers, on the company's Facebook page. This is one of the first products to roll out of @Walmartlabs, a unit of the company based just south of San Francisco that is developing social-networking and mobile technologies for the retailer. More
Coinstar adds retailers to line of no-fee gift cards
Progressive Grocer Share
Self-service coin counting solutions provider Coinstar has expanded its line of no fee gift cards available at its kiosks to include cards from Chili's Grill & Bar, Maggiano's Little Italy, Papa John's and Toys"R"Us. Coinstar's broad range of no fee options were developed to enable consumers to get more value out of their coins from top national and regional brands. More
The Top new products of 2011
Convenience Store News Share
Twenty-two products in 21 product categories (there was one tie) were named winners in the 15th annual Convenience Store News Best New Products Awards competition. Judged again this year by Past Times Marketing, the submitted entries were rated on the criteria of taste, value, convenience, healthfulness, quality ingredients, preparation requirements, appearance and packaging. More
Retail industry adds 50,000 jobs in November
Gourmet Retailer Share
Although Department of Labor data reveals that the retail industry added almost 50,000 jobs in last month the second-highest increase since September 2007 the Retail Industry Leaders Association cautioned that new regulations could slow the continued pace of job growth. The data shows that the retail industry added 49,800 jobs in November, raising the number of total U.S. retail jobs to 14.7 million. The retail industry has added nearly 200,000 new jobs in 2011, averaging 14,000 new jobs each month. The news coincides with optimism regarding the current holiday shopping season. More
AAFES 2012 Seminars
2012 Power Zone Seminar: The dates are July 30–Aug. 3, in Orlando at Caribe Royale Hotel. Below is a link to the hotel.
2012 Express Seminar: May 7-11, in St. Charles, Ill., at Pheasant Run Resort.
Exchange FTP/MKImages procedures
The necessary components needed to begin the new receiving process of vendor images have been completed. Effective immediately, all vendor images being submitted to our FTP site will now be sent to a new designated server. In addition, the size limit for the MKImages inbox is in the process of being increased to help accommodate extra image submissions. Below are the guidelines and procedures for submitting images.
Submitting images via MKImages:
Once an image is accepted, the Image Coordinator will replay back to the sender notifying them the image has been approved. If an image is rejected or can not be identified, the Image Coordinator will replay back to the sender informing them and provide guidance on what is needed. The liaisons and Designer will be copied on the messages in each instance.
This information including further instructions on how to access our FTP site, is indicated on the attached PDF. Jack Christensen will be the POC for any questions you or the vendors may have. And certainly I can be contacted as well in the event Jack is out of the office or requires assistance with an issue. If these procedures are followed correctly, it should help to alleviate the issues we are all experiencing.
Army & Air Force Exchange Service
Visit our online store! www.shopmyexchange.com
Price of school lunch to increase for OCONUS DoDEA schools
Yokota Air Base Share
Starting Jan. 3, 2012, school lunch prices at all Department of Defense Education Activity schools Outside the Continental United States (OCONUS) will increase. On Nov. 10, the military services approved an increase in the price of school lunches at DoDEA schools in order to keep pace with increasing operational costs and comply with The Healthy, Hunger-Free Kids Act (Public Law 111-296). The Act requires participants in the USDA meal program to raise paid student lunch prices to a level comparable to the state subsidy rate used for USDA reimbursement. More
AAFES new item fee
New Item Allowances New Policy:
To better align with retail industry best practices, The Exchange is establishing a corporate policy requiring suppliers to provide New Item Allowances. These allowances will be used to offset the intrinsic costs associated with adding items to multiple Exchange systems, such as but not limited to:
Army & Air Force Exchange Service
People First December 2, 2011
Aerotech News and Review Share
Editor's Note: The "People First" section is compiled from information from the Air Force Personnel Center, TRICARE, 56th Force Support Squadron, Airman and Family Readiness Flight, Veterans Affairs, the civilian personnel office and armed forces news services. For the complete story, go to the Web address listed at the end of the story. More
Fort Carson MWR boosts soldiers' morale in Afghanistan
A flag now hangs on Forward Operating Base Walton's helicopter landing zone that was sent by four hard working ladies (Michele, Toni, Gigi and Ann) with the Fort Carson Morale Welfare and Recreation team. They sent two flags from the 2nd Brigade Combat Team, 4th Infantry Division, families with messages to their soldiers saying, "be safe," "I love you" and "come home soon." More
AF officials seek NAF employees for career broadening opportunities
Newsroom America Share
NAF employees now have the opportunity to expand their careers and sharpen their leadership skills through the NAF Career Broadener Program. Applications for this program are part of the NAF Development Team call released Dec. 1. This Air Force initiative allows federal employees in categories NF III/IV/V, UA 6-12, NA 09-15, NL 01-15, NS 01-19, and CY 04-05 the chance to pursue management roles outside their primary area of expertise for career enhancement. More