The Army and Air Force Exchange Service
We go where you go to improve the quality of your lives through goods and services we provide
Society of American Military Engineers - 2020 Conference
Our Mission, Vision and Core Values
We go where you go to improve the quality of your lives
through goods and services we provide
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MISSION
VISION
CORE VALUES
Family serving family
Respect everyone
Courage to use good judgment
Be the preferred retail and service provider for the Military family through extraordinary customer experiences and value pricing
36COUNTRIES
Exchange By the Numbers
$8.7 Billion
REVENUE FY 2018 (includes concessions)
$2.4 Billion
In dividends over last 10 years
2.6 Million
School lunches served every year
Exchange Associates connected to military85%
1,250Wounded Warriors hired since 2010
$386Million EARNINGS FY 2018
$223 Million
Dividend to Soldiers, Airmen and their families
2,500FACILITIES
WORLDWIDE
1.1 Million
Combat uniforms outfitted in 2017
4,600 Associates deployed to combat zones since 9/11
Providing bakery goods/bottled water to support military overseas
7Plants
107Million
Meals served at Exchange restaurants
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DEMOGRAPHICS
Active Duty 1,407,891
Retiree 2,517,651
Guard & Reserve 1,080,874
Family Members 6,943,154
Civilians/Other* 1,030,945
Veterans 271,050
Total 13,251,565
*DoD civilians and eligible international military members
Serving the Military Family
RETIREE
FAMILY MEMBERS
ACTIVE DUTYGUARD/
RESERVECIVILIANS/
OTHER
2% 52%19%11%8%
VETERANS
8%
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Benefits Support Service Members & Families
100% of earnings are reinvested in military communities
• Quality of Life• Enable Readiness• Sense of Community
FY18 Sales (With Concessions)
FY18 Net Earnings FY18 Dividend
$8.7B $386M $223M
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Organizational Structure
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Construction Division (VP)
Gus Elliott
[email protected]: 214-312-3911
ConstructionRichard Kourajian
RenovationsJ.P. Page
Darrin Rogers
EnergyBrian Lally
Contracting Division
Mitchell Burnett
[email protected]: 214-312-3447
Construction
A-E Services
Leases
Equipment
Facility Management
Support Services
Real Estate (SVP)
Mike Smietana
[email protected]: 214-312-6579
Planning Division (VP)
Beth Goodman-Bluhm
[email protected]: 214-312-6890
Business AnalysisShabeeb Tayara
Fixtures & EquipmentCasandra Winbush
Master PlanningDan Warner
Military Programs CPT James Green
Finance & Accounting
Janet Milum
[email protected]: 214-312-3068
Capital Expenditures
Project Accounting
Fixed Assets
Utilities
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Operations Division Command Engineer
COL Juan Saldivar
[email protected]: 214-312-2107
Regional Facilities Management
Moises Pinedo
[email protected]: 214-312-6757
EnvironmentalRobert Largent
Greg Smith
Military ProgramsMAJ Thomas Piazze
Regional Support
MissionPlan, Develop, Construct and Maintain Exchange Real Estate Assets
VisionBe a Catalyst for Sustained, Long-Term Business Growth
Real Estate (RE) Directorate
1,730 Exchange Trailers
340 Exchange Tractors
14M Miles Driven
12th Largest Retail Private Fleet in U.S.
Our Logistics Operations Span the Globe
The Exchange is the Third Largest Shipper in the Defense Transportation System
10 Distribution Centers
48M Cases Shipped
2,527 Associates
35,835 Containers Exported
4,096 Containers Imported
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▪ RE interfaces with DoD installation leadership at all levels
▪ OSD, Army, AF
▪ Wing/Garrison, MAJCOM/IMCOM, Pentagon, Secretariat, DeCA
▪ Facility projects need BoD and Service approval (DD 1391)
▪ The Exchange is subject to DODI, AR & AFI rules on facilities &support
▪ Inter-Service Support Agreements
▪ Sharing 5-yr LRCP
We Build Partnerships
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We Build Partnerships
U.S. Congress
Army/Air Force
Exchange Board of Directors
Exchange CEO
Senior Vice President
Real Estate Directorate
OCONUS Commanders, Region SVP
CONUS Region SVPs
Office of the Secretary of DefenseOversight:
Construction Cost > $1M
Capital Cost > $1.5M
Capital Cost </= $200K
Capital Cost </= $100K
Capital Program Authority
110816 10
Investment Capital Cost < $1.5MSustainment Capital Cost < $5M
Capital Program Authority
ProjectInitiated
(PPQ)Project Authorized
(Charter)
Scope Definition
Design and Approval
ConstructionApproval and Commitment
Scope Defined(35% Design)
ConstructionCompleted
(Grand Opening)
BoDApproval
CongressionalRelease
YEAR 1 YEAR 2 YEAR 3+
BoD ViabilityReconfirmation
PlanningInitiation
Construction
Project Life-cycle
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Project Life-Cycle
PPQ – Project Planning Questionnaire
Sep-Oct Develop DD1391; coordinate w/BCEs & DPWs
Nov Exchange FY NAF Program Approved by BoD
Jan - Mar Finalize 1391s
Apr Submit to Services
May Services send to OSD
Jun Brief OSD on Program
Aug Brief Congress
Jan - May Program Approved
Project Approval Timeline
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Project Approval Timeline
Master PlanningAnalysis on 10-year cycle w/ installation
Continuous requirements validation
Requirements
Image Updates - Sales/Sq. Ft. basis (stress), facility age & condition
Shopping Centers – renovate vs new; MD concept shops; ship-from-store
Express Stores – QSR expansion; healthy snack options
Restaurants – Support food transformation (healthy alternatives & popular brands)
Locally identified needs
Where Projects Come From
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Where Projects Come From
MD – Merchandise Directorate
QSR – Quick Serve Restaurants
Factors Affecting IRRFactors Impacting IRR
A financially marginal project7% - 9.9%
Below 7%
10% and above
A financially desired project
A financially acceptable project
Retained earnings is source for capital investment
Each projects evaluated as a capital investment
Portfolio return must be positive -> GENERATE MWR DIVIDEND
Factors impacting IRR/NPV
APF support
Demographics, housing & proj military strength
Sales trends & existing condition
Affected facilities
Intra-urban location patterns –competitors; complementary activities
Dispersion vs comparison good clustering (DECA, nearby gas & restaurants, etc)
Urban growth
Transportation network
TOTAL Net Present Value = $10.8M
Total NPV = $7.7M (profit)
ExpressDual FoodMini-Mall
Project Cost IRR NPV$4.3M 19.0% $4.4M$3.3M 16.7% $2.6M$11.8M 15.5% $3.8M
ExchangeMini-Mall
Project Cost IRR NPV$20.6M 3.8% - $2.0M$3.8M 4.0% - $1.1M
TOTAL Net Present Value = - $3.1M
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Long Range Capital Program
030520 15
Long Range Capital Program
030520
$578
LRCP Planned Project Starts
As of 10MAR2020
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2020-2021 LRCP Project Starts
Facility Type of Work CY 2020CY 2021
(Proposed)
Shopping Center New / Expand / Renovate -0- -0-
Shopping Center Image Update 7 / $45M 8 / $75M
Express New / Expand / Renovate 1 / $7M 1 / $3M
Food Projects New / Expand / Renovate 1 / $2M -0-
Special Projects Build / Equip / Upgrade 6 / $19M 3 / $15M
Project Totals 15 / $73M 12 / $93M
Planned LRCP Projects (BoD Yr.. 2021)*
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10
1
Sustainment
Investment
*Proposed Project Start 2021-2022NC – new constructionIU – image updateMCS – military clothing sales store
2021 PROJECT
Ft Hamilton, NY NC Express Kiosk w/ Gas
RAF Lakenheath, UK IU – Shopping Center
JBER – Elmendorf, AK IU – Shopping Center/MCS
Andersen AB, Guam IU – Shopping Center
Stuttgart Panzer, Germany IU – Shopping Center
Yokota AB, Japan Construct DC Cold Storage
Ft Wainwright, AK IU – Mall/Food Court
Ft Irwin, CA IU – Shopping Center
Bolling AFB, MD IU – Shopping Center
Maxwell AFB, AL IU – Shopping Center
JBSA - Ft Sam Houston, TX IU – Repurpose PXtra
Conceived LRCP Projects (BoD Yr. 2022)*
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8
3
Sustainment
Investment
*Proposed Project Start 2022-2024NC – new constructionIU – image updateMCS – military clothing sales storeH&G – home & gardenCCC – Car Care Center
2022 PROJECT
Wiesbaden Hainerberg, AAF, Germany NC Express/Gas
Ft Gordon, GA NC Express/Gas
Camp Roberts, CA NC Express
JBMDL Dix, NJ IU – Shopping Center
JBLM McChord, WA IU – Shopping Center
Aviano AB, Italy IU – Shopping Center
Patrick AFB, FL IU – Shopping Center
Columbus AFB, MS IU – Shopping Center/Relocate Express/Gas
Charleston AFB, SC IU – Shopping Center
Misawa AB, Japan IU – Shopping Center/MCS
JBSA Randolph, TX IU – H&G/CCC
Ft Riley, KS IU – Shopping Center
Wright-Patterson AFB, OH IU – Home & Garden
Moody AFB, GA IU – Shopping Center
Ft Carson, CO IU – Furniture Store
USAF Academy, CO IU – Shopping Center
Fairchild AFB, WA IU – Shopping Center
Construction / AE Services
Data / Geo (Title 1) / Design (Title 2)
Construction Management (Title 3)
New Construction / Renovation
Environmental / Energy
Store Support Services
Facilities Management Office (FMO)
Equipment / Fixtures
NBFF and In-house Food Equipment
Retail Store Fixtures
Office Furniture
Store Carpet and Flooring
Gas Dispensing
Fixture Logistics Installation Contract (FLIC)
Overseas Plants
Vehicles (non-GSA)
What We Procure
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What we Procure
NBFF – Name Brand Fast Food
A-E Contract Types
Small Projects – IDIQ Contracts
Set Hourly Rates
Individual Orders for each Project at FFP
Large Projects – Individual Contracts
FFP Contracts with design phases
Master Planning – IDIQ Contracts
Set Hourly Rates
Individual Orders for each Project at FFP
Environmental – IDIQ and Individual Orders
Energy Management – IDIQ and Individual Orders
FFP = Firm Fixed PriceIDIQ = Indefinite Delivery/Indefinite Quantity
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A-E Contract Types
Doing Business with the Exchange
http://www.shopmyexchange.com
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Doing Business with the Exchange
Thank You
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