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Mr. Patrick B. NixonMr. Patrick B. NixonDirector & CEODirector & CEO

February 14, 2007 February 14, 2007

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DeCA • Regional offices• Commissaries• Country locations• Central distribution centers (CDC)• Central Meat Processing Plant

DeCA • Regional offices• Commissaries• Country locations• Central distribution centers (CDC)• Central Meat Processing Plant

FY 2005 FY 2006FY 2005 FY 2006 3344

268268 263263

1414 1313

11 111010 1010

DeCA workforce• Military

• End strength Family members Local nationals

CIV FTEs executed

DeCA workforce• Military

• End strength Family members Local nationals

CIV FTEs executed

FY 2005 FY 2006FY 2005 FY 2006 1010 55

17,81717,81718,02318,023

38%38% 38%38%

2,0942,094 2,1192,119

14,90414,90415,05815,058

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FY 2007• $5.5M reduction per OSD for efficiencies

• $25.5M reduction per OSD for Defense-wide offset

• $4.4M COB approved reductions

• $17.1M foreign currency fluctuation

FY 2008 - FY 2013• BRAC, overseas restationing, reengineering,

and other cost savings initiatives are reflected in the current budget

FY 2007• $5.5M reduction per OSD for efficiencies

• $25.5M reduction per OSD for Defense-wide offset

• $4.4M COB approved reductions

• $17.1M foreign currency fluctuation

FY 2008 - FY 2013• BRAC, overseas restationing, reengineering,

and other cost savings initiatives are reflected in the current budget

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Facilities & Improvements

Equipment

Information Technology**

Total

Facilities & Improvements

Equipment

Information Technology**

Total

FY 2006

$122M

$25M

$90M

$237M

FY 2006

$122M

$25M

$90M

$237M

FY 2007

$260M*

$21M

$80M

$361M

FY 2007

$260M*

$21M

$80M

$361M

FY 2008

$205M

$24M

$50M

$279M

FY 2008

$205M

$24M

$50M

$279M

* 4 major construction projects rolled over into FY 2007** Commissary Advanced Resale Transaction System (CARTS) begins deployment in February 2007 – completion date 2008

* 4 major construction projects rolled over into FY 2007** Commissary Advanced Resale Transaction System (CARTS) begins deployment in February 2007 – completion date 2008

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Revised OMB Circular A-123, Appendix A requires agencies to report on the effectiveness of their internal controls over financial reporting

Accomplishments

• Highest score in DoD on the FY 2006 Annual Statement of Assurance Scorecard• OSD(C) referring DoD Components to DeCA as the model for

implementation

Internal Control efforts contributed significantly to the fifth consecutive “clean” audit opinion on financial statement

Revised OMB Circular A-123, Appendix A requires agencies to report on the effectiveness of their internal controls over financial reporting

Accomplishments

• Highest score in DoD on the FY 2006 Annual Statement of Assurance Scorecard• OSD(C) referring DoD Components to DeCA as the model for

implementation

Internal Control efforts contributed significantly to the fifth consecutive “clean” audit opinion on financial statement

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Increasing the value of the benefit without

increasing the cost

• Implemented Health & Wellness

Dietitian onboard to promote Health and Wellness

initiatives

• Expanded Natural & Organic food

• Expanded Virtual Commissary

Improved product availability

• Assumed produce procurement mission

Increasing the value of the benefit without

increasing the cost

• Implemented Health & Wellness

Dietitian onboard to promote Health and Wellness

initiatives

• Expanded Natural & Organic food

• Expanded Virtual Commissary

Improved product availability

• Assumed produce procurement mission

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Commissary gift certificates

• Nearly $11M gift certificates purchased to date

More than $200K donated by Industry, military, and general public to charities assisting military families including

• Operation Homefront, USO, Air Force Aid Society

and Fisher House Foundation

Scholarships for Military Children

• Nearly 3,000 students assisted

• More than $5M since 2001

• Increased public donations seen in FY 2006

• FY 2007 scholarships close February 21, 2007

• Pre-deployment and welcome back activities for troops

• Commissaries/vendors actively participate locally

Commissary gift certificates

• Nearly $11M gift certificates purchased to date

More than $200K donated by Industry, military, and general public to charities assisting military families including

• Operation Homefront, USO, Air Force Aid Society

and Fisher House Foundation

Scholarships for Military Children

• Nearly 3,000 students assisted

• More than $5M since 2001

• Increased public donations seen in FY 2006

• FY 2007 scholarships close February 21, 2007

• Pre-deployment and welcome back activities for troops

• Commissaries/vendors actively participate locally

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Program coordinated with Industry and DSC-P

Contracts awarded for all CONUS locations, plus Alaska, Hawaii, Puerto Rico, and Cuba

• NE protest has delayed performance by contractor

Solicitations to follow for coverage in Pacific and European locations

DSC-P support will continue until conversion completed

• Results extremely positive Improved quality Increased savings Increased organics

Program coordinated with Industry and DSC-P

Contracts awarded for all CONUS locations, plus Alaska, Hawaii, Puerto Rico, and Cuba

• NE protest has delayed performance by contractor

Solicitations to follow for coverage in Pacific and European locations

DSC-P support will continue until conversion completed

• Results extremely positive Improved quality Increased savings Increased organics

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Impact of closing locations: (BRAC 2005)

• Commissaries affected: 6 Stores Fort Monmouth, NJ Fort McPherson, GA Fort Gillem, GA CE Kelly Support Center, PA NSCS Athens, GA NAS Brunswick, ME

• FY 2006 Sales: $65.5M

• FY 2006 Surcharge: $3.3M

• Depreciated value of assets: $9.1M

• Employee authorizations: 195

Impact of closing locations: (BRAC 2005)

• Commissaries affected: 6 Stores Fort Monmouth, NJ Fort McPherson, GA Fort Gillem, GA CE Kelly Support Center, PA NSCS Athens, GA NAS Brunswick, ME

• FY 2006 Sales: $65.5M

• FY 2006 Surcharge: $3.3M

• Depreciated value of assets: $9.1M

• Employee authorizations: 195

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BRAC legislation approves a building addition to

DeCA HQ, Fort Lee

• Project contract award 1st qtr FY 2008

• Eliminates leased facilities

• Complies with DoD’s Force Protection Standards

Transfer DeCA’s Human Resources Operations Division

(HROD) to DLA in FY 2008-2009

• Dependent on conversion date to NSPS

• Challenges

Business processes

Funding

BRAC legislation approves a building addition to

DeCA HQ, Fort Lee

• Project contract award 1st qtr FY 2008

• Eliminates leased facilities

• Complies with DoD’s Force Protection Standards

Transfer DeCA’s Human Resources Operations Division

(HROD) to DLA in FY 2008-2009

• Dependent on conversion date to NSPS

• Challenges

Business processes

Funding

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Overseas Integrated Global Presence Basing Strategy (OIGPBS) Gaining Location

• 6 locations impacted: Ramstein, Spangdahlem, Ansbach,

Wiesbaden, Vilseck, Vicenza

• Total cost $92.9M

Base Realignment and Closure (BRAC) Gaining Location

• 10 locations impacted: Ft Bliss, Ft Riley, China Lake,

Ft Benning, Ft Carson, Ft Lee, NS Norfolk, Ft Sam Houston, Moody AFB, Ft Belvoir

• Total cost $178.9M

Overseas Integrated Global Presence Basing Strategy (OIGPBS) Gaining Location

• 6 locations impacted: Ramstein, Spangdahlem, Ansbach,

Wiesbaden, Vilseck, Vicenza

• Total cost $92.9M

Base Realignment and Closure (BRAC) Gaining Location

• 10 locations impacted: Ft Bliss, Ft Riley, China Lake,

Ft Benning, Ft Carson, Ft Lee, NS Norfolk, Ft Sam Houston, Moody AFB, Ft Belvoir

• Total cost $178.9M

Facility ImpactsFacility Impacts

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If you want to complicate your life…

• Don’t read or follow the Collective Bargaining

Agreement

• Don’t call the Labor Specialist (Chateara Seymour)

for advice when faced with a labor issue

• Don’t invite the union to participate in formal

discussions with bargaining unit employees

• Don’t return the Union reps phone calls—keep them

in the dark and close off all lines of communication

If you want to complicate your life…

• Don’t read or follow the Collective Bargaining

Agreement

• Don’t call the Labor Specialist (Chateara Seymour)

for advice when faced with a labor issue

• Don’t invite the union to participate in formal

discussions with bargaining unit employees

• Don’t return the Union reps phone calls—keep them

in the dark and close off all lines of communication

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Past efforts focused on combining processes• Most successful – Joint construction program & implementation of

open architecture/IT standards.

• Most problematic – differing APF vs. NAF rules

Current efforts focused on exploring opportunities that could strengthen the military resale system • Many would require OSD approval or Congressional

notification/action

Key charters• Joint sales events

• Brand named concessions within commissaries (e.g., Starbucks)

• Selling exchange items in commissaries

• Shared contracting opportunities

• Universal gift card

• Sharing distribution systems

• Use of on-line mediums, catalog, and direct mailing to communicate benefit information and advertise promotional events

Homestead

Past efforts focused on combining processes• Most successful – Joint construction program & implementation of

open architecture/IT standards.

• Most problematic – differing APF vs. NAF rules

Current efforts focused on exploring opportunities that could strengthen the military resale system • Many would require OSD approval or Congressional

notification/action

Key charters• Joint sales events

• Brand named concessions within commissaries (e.g., Starbucks)

• Selling exchange items in commissaries

• Shared contracting opportunities

• Universal gift card

• Sharing distribution systems

• Use of on-line mediums, catalog, and direct mailing to communicate benefit information and advertise promotional events

Homestead

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