EDITORIAL COMMENT: The Serving Line
Troop Support: The Prime Vendor Program's Prime Goal
Improving business and reducing costs in the subsistence category is a demanding task that calls for special effort, dedication and collaboration between the military and industry suppliers.
The Defense Logistics Agency (DLA) has set a goal of saving $10.3 billion by 2018 by decreasing operating and material costs, including the increased use of prime vendors. Under pressure to reduce costs, DLA Troop Support plans to achieve a 10 percent reduction in costs by fiscal 2018.
A cornerstone of the collaboration needed to achieve cost reduction and efficiencies between the military and industry suppliers is the trio of prime vendor programs available to federal foodservice customers.
On the subsistence side there is DLA Troop Support's prime vendor program, which includes the National Allowance Pricing Agreement (NAPA) and Manufacturer Pricing Agreement (MPA).
On the Morale, Welfare and Recreation (MWR) side are the Army's Joint Services Prime Vendor Program (JSPVP) and the Air Force Nonappropriated Fund Prime Vendor III (AFNAF PVIII) programs.
DLA Troop Support holds 55 main prime vendor contracts with 21 food distributors worldwide, as well as dozens of supplementary contracts, or catalogs, tailored to particular customer requirements. All of these contracts are worth more than $3.79 billion.
AFNAF PVIII provides food and related supplies to 429 Air Force clubs, bowling centers, golf courses, outdoor recreation sites, base restaurants and snack bar activities at more than 90 Air Force installations worldwide.
In fiscal 2012, prime vendor purchases totaled more than $73.6 million. A key component is the Rebate Program, which has established agreements with more than 134 food manufacturers. In fiscal 2012, the program earned $458,000 and has returned more than $3.7 million in rebates to the field since 2000.
In fiscal 2012, customers purchased $160.4 million off JSPVP contracts and saved more than $22.2 million through contract savings, rebates and off-invoice discounts.
Military and industry work together in the activity of troop feeding. Occasionally one side leans on the other for concessions until circumstances improve. In the current climate of tight federal budgets and cost-cutting goals, it is the military leaning on its industry partners to get better prices.
To contain costs associated with annual subsistence sales, DLA Troop Support is using reverse auctions in acquisitions if some benefit or reduction in price can be achieved compared with traditional methods. It is also studying whether pricing and allowances in the 16-year-old NAPA program are up to date with current industry standards.
JSPVP is concentrating its food and beverage purchasing volume for the continental United States (CONUS) by selecting a sole source in each of 16 highvolume categories to cut costs.
The focus in military food service, however, cannot be on price alone. At its best, the military-industry collaboration these prime vendor programs are based on accomplishes a goal that is far greater than simply a savings on purchases. In troop feeding, the common interest for both sides is to benefit service members with a steady, reliable supply of the best food items available. And it is a maxim of that common interest that, no matter what price advantages might be achieved, the quality of the food supplied the warfighter must never be compromised.