Current Environment of the DLA Clothing & Textiles Procurement-Presentation by NISH

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

DEFENSE LOGISTICS AGENCY AMERICA’S COMBAT LOGISTICS SUPPORT AGENCY

DLA Troop Support Clothing & Textiles Col Jeanne Hardrath

Jeanne.Hardrath@dla.mil

WARFIGHTER SUPPORT ENHANCEMENT

STEWARDSHIP EXCELLENCE

WORKFORCE DEVELOPMENT

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

Agenda • Who We Are • How We Are Doing • FY 11 Financial Analysis • Final Thoughts

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

DLA Troop Support

Mission, Vision and Values Mission We accomplish the Defense Logistics Agency mission by providing effective and efficient support to our warfighters and other customers with food, clothing, construction, and medical solutions to achieve their global mission Vision Warfighter-focused, globally responsive, fiscally responsible supply chain leadership Values • Warfighter needs guide us • Integrity defines us • Diversity strengthens us • Excellence inspires us 4

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Clothing & Textiles

Our Management Team

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Who To Contact Clothing & Textiles contracting staff organized in Divisions by Product Group and Programs • Organizational Clothing: Sharon Piecyk

(215)737-8043

• Equipment & Tentage:

(215)737-3274

Terri Scheetz

• Special &Extremity Clothing:

Kevin Peoples

(215)737-5657

• Director: Col Jeanne Hardrath Jeanne.Hardrath@dla.mil

(215)737-3001

• Deputy Director: Keith Ford keith.ford@dla.mil

(215)737-3000

• Administrative Assistant:Irene Pirollo irene.pirollo@dla.mil

(215)737-3002

• Small Business Office Mike McCall mike.mccall@dla.mil

(215)737-2323 6

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DLA TROOP SUPPORT SMALL BUSINESS OFFICE 1 800-831-1110 Michael McCall -- 215 737-2321 Michael.McCall@dla.mil

Clothing & Textiles: Joann Gatica -- 215 737-5910 Joann.Gatica@dla.mil

AbilityOne Acquisition Program Support Tyrone Lyles – 215 737-8484 Tyrone.Lyles@dla.mil 7

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

Clothing & Textiles $2.2

Customers: 20,000 Orders:

Sales

Billions

Customers / Items

$2.0

$2.4

$2.5

$2.1

7.3M annually average 600k monthly

Items:

48,000

FY11 Forecast

$2.1B

The Big Picture Inventory $1.5

Personnel / Vendors

Billions $1.4

$1.5

$1.6

(auth):

Employees *333 civilian + 10 military Suppliers: 604

*includes 2 DLA Troop Support Europe & Africa positions

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

Clothing & Textiles Sales FY10 Service Breakout

$Millions

Historical Trend

FY10

$2.1B

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FY10

DLA Troop Support Share of the Business FY11 thru Dec

Small Business $2.4B

Small Business $914M

AbilityOne $469M

Mandatory $609M Other than Small Business $10.8B

UNICOR $140M

AbilityOne Troop Support Contract Dollars: $469M NISH $337M •JSLIST •Parka/Trousters •Cold Weather Shirts •Navy Working Uniform

•Army Combat Uniform (ACU) •Airman Battle Uniform (ABU)

NIB $132M

Mandatory $75M Other than Small Business $711M

AbilityOne $69M

UNICOR $6M

AbilityOne Troop Support Contract Dollars: $69M NISH $51M •JSLIST •Parka/Trousters •Cold Weather Shirts •Navy Working Uniform

•Army Combat Uniform (ACU) •Airman Battle Uniform (ABU)

NIB $18M

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

FY 10 C&T Share of Business

$871M

Mandatory $589M

AbilityOne $450M NISH $326M UNICOR NIB $124M $139M

$540M Small Business

FY 2010 Most Active NISH Items: JSLIST -- $121M Fleece Jacket -- $46M Mid Weight ECWCS Shirt -- $18M Mid Weight Cold Weather Drawers -$14M Wet Weather Poncho -- $12M Microclimate Cooling Undershirt -- $11M Wet Weather Parka -- $10M Working Trousers -- $8M Warehousing & Distribution -- $7M

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

DSCP C&T Industrial Base • Small Business • Mandatory Suppliers – – –

NISH UNICOR NIB

45% 34% 23% of total 8% of total 3% of total

• Large Business 21% • FY 10 -- $540 Million Total Small Business Contract Dollars -- HUBZone Small Business -- $155 million NISH – Women-owned Small Business -- $64 million $326 million – Small Disadvantaged Business -- $82 million – Veteran-owned Small Business -- $112 million • AbilityOne suppliers are a vital component of our domestic industrial base • In 2010, over 55% of clothing and textile contract dollars were awarded to domestic small businesses • Many suppliers, including AbilityOne firms, met the rapidly escalating demand during Operation Iraqi Freedom and Operation Enduring Freedom 12

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

Material Availability Clothing & Textiles all Services

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

Unfilled Orders Clothing & Textiles all Services

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RTC Bag Fill Rates Clothing & Textiles 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Oct‐ 09

Oct‐ 10

Army

99.9% 99.9% 100.0 99.9% 100.0 100.0 99.9% 99.9% 99.3% 99.3% 99.7% 99.4% 99.5% 98.9% 99.2% 99.6% 99.8% 99.7%

Navy

85.6% 89.0% 96.0% 91.4% 91.0% 95.0% 79.6% 93.4% 94.1% 96.5% 98.5% 98.9% 97.8% 97.7% 97.4% 98.8% 99.7% 98.8%

Marines 99.4% 99.7% 100.0 100.0 100.0 100.0 100.0 100.0 100.0 99.6% 99.5% 100.0 98.4% 98.8% 99.1% 99.4% 98.6% 98.4% Air Force 100.0 100.0 99.9% 99.3% 99.98 99.98 100.0 100.0 100.0 100.0 100.0 99.3% 100.0 100.0 100.0 99.6% 99.9% 100.0

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Recruit Training Center Performance Clothing & Textiles First Time Fill Rate March 2011

04-10 Mar

11-17 Mar

18-24 Mar

25-31 Mar

Monthly Avg

Ft Jackson

98%

99.8%

100%

97%

99.1%

Ft Benning

99.8%

100%

99.9%

Ft Leonard Wood

100%

99.9%

100%

99.9%

Ft Sill

99.8%

100%

99.9%

Ft Knox

100%

MCRD San Diego

99.3%

95.2%

100%

98.6%

95%

98.1%

100%

98.2%

Lackland AFB

100%

Great Lakes

98.4%

99.9%

97%

98.8%

Weekly Total

98.9%

99.2%

100%

99.3%

99.4%

MCRD Parris Island

â&#x20AC;˘ 5,600 NSNs are required to support all bag items at RTCs

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

FY10 C&T Investment by Division

Item Group

FY10 Plan

Dress Clothing

190.4M

Field Clothing

533.7M

Chemical/Outer Extremities Individual Equipment Total

FY10 • Expenditure history – FY05… $2.088B Actual – FY06… $1.613B 192.7M – FY07… $1.900B – FY08… $2.086B 680.6M – FY09… $2.637B

605.7M • Plan adjustments – Based on actual sales – Customer collaborative 700.8M 522.4M forecasts $2.107B $2.002B – New item introductions 682.9M

Adjustments made thru the use of automated demand and supply tools 17

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

FY11 Investment Plan vs. Execution

Oct-Mar Plan

Oct-Mar Actual

Mid-Yr Apr-Sep Plan

Dress Clothing

71.5M

69.2M

92.8M

162.0M

Field Clothing

213.9M

129.4M

263.6M

393.0M

Chemical/Outer Extremities

205.5M

102.5M

215.7M

318.2M

Individual Equipment

590.3M

234.0M

722.8M

956.8M

$1.081B

$525.1M

$1.295B

$1.830B

Item Group

Total

Revised FY11 Plan

Plan will be impacted by DoD Budget Decisions 18

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

FY 11 Execution • C&T Sales are down – FY10 sales were lower than FY09 – FY11 sales to date are over $230M lower than FY10 at the same time

• Customer Demand is down • Inventory, however, has remained steady • C&T obligations will decrease commensurate with the reduced requirements

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FY 12 Outlook • Now is the time to plan for future DOD business • You need to expect a reduced DOD budget in FY12 and the out years • Drawdown plans and any revisions for Iraq and Afghanistan will have a further impact the budget

The only thing certain about future budgets is that they are uncertain 20

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Efficiency "Meeting real-world requirements. Doing right by our people. Reducing excess. Being more efficient. Squeezing costs. Setting priorities and sticking to them. Making tough choices. These are all things that we should do as a department and as a military regardless of the time and circumstance.â&#x20AC;&#x153; Defense Secretary Robert M. Gates At the Pentagon, Jan 6, 2011

Sources: http://www.defense.gov/home/features/2010/0810_effinit/ and http://www.defense.gov/dodcmsshare/biography/hires_051909092929_Robert%20Gates%20-%20061212-A-5590K-001.jpg

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Efficiency “Ultimately, as leaders in government and industry, we owe it to the men and women in our armed forces to do all we can to provide them with the very best support to complete their mission and return home safely.” Ashton Carter Under Secretary of Defense for Acquisition, Technology and Logistics Sep 14, 2010

Source: http://www.defense.gov/home/features/2010/0810_effinit/

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Efficiency "Warfighter support is our organization's primary focus, but along with that comes the need to deliver products and services efficiently and to reduce prices.â&#x20AC;&#x153; Vice Admiral Alan S. Thompson Director, Defense Logistics Agency Aug 25, 2010

Source: http://www.army.mil/-news/2010/08/26/44228-agency-works-to-ensure-every-dollar-counts/index.html and http://www.dla.mil/Leaders/director.aspx

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

Last Thoughts In our joint quest to support our warfighters effectively and efficiently we must focus on the following • Vendor Past Performance • Product Quality • Product Value • Supply Chain Efficiency

WARFIGHTER-FOCUSED, GLOBALLY RESPONSIVE, FISCALLY RESPONSIBLE SUPPLY CHAIN LEADERSHIP

2011 DLA Industry Conference This event features speakers from OSD and the Military Services, informative breakout sessions, and exhibits from DLA’s headquarters, field activities and major suppliers. The theme of this year’s conference is “Sustaining Warfighter Support while Reducing Cost” Where: When:

Greater Columbus Convention Center Columbus OH 27-30 June 2011

For further information or to request exhibit space see the Web site at http://www.ndia.org/meetings/1780/Pages/default.aspx