Business Operations Overview for FY16

The document provides an overview of the business operations for FY16, highlighting key goals and objectives of the Products and Textiles departments. It discusses meeting employment and project completion goals, product distribution strategies, environmental challenges, ETS compliance, and current activities such as agreements with SourceAmerica and discussions with DLA. The focus is on maximizing product distribution, preventing leakage, and improving product development efficiency.

• Business operations
• FY16 goals
• Product distribution
• Textiles department
• Environmental challenges

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1. PRODUCTS and Textiles OVERVIEW Marie-France Vareilles Vice President, Products Sally DiDonato Director, Textiles TAG July 2016 1

2. Overview FY16 goals and objectives Business environment Current activities Department Overview Textiles 2

3. FY16 Goals/Objectives Meet or exceed assigned new employment goals of 278 Blind Work Years (BWY) and project completion goals of 75 for all product categories Status to Date: NIB Products Projects and BWYs Department BWYs Projects Commodities 48.90 18 Textile 148.33 12 Niche 18.56 8 Military Resale 1.31 16 Commercial .78 5 TOTAL 217.88 59 3

4. Product Group Objectives Provide operational support to ensure maximum distribution of our products within our network of authorized wholesalers and distributors- implement distributor policy Decrease the leakage of products by preventing the marketing/ sale of Essentially-the-Same (ETS) products among Multiple Award Schedule (MAS) holders and bids/ solicitations Improve and sustain the MR program through effective product launch, increase program promotions to DeCA and improve product distribution Decrease product development time to efficiently and effectively add new products to the procurement list 4

5. Business Environment DLA not issuing NSNs when there is no contract Foreign Military sales Tailored Logistics Service (TLS) contracts are a source of leakage for products DOD proposal to cut commissary funding 5

6. Business Environment ETS compliance of GSA distributors ETS policy published July 2015 Distributor Policy published and effective July 2016 Federal Strategic Sourcing Initiatives: GSA JanSan/MRO requisition channel launching August 2016 OS3 requisition channel launched November 2015 Industry Day August 25-26, 2016 FPI waivers 6

7. Current Activities Reviewing M&D agreement SourceAmerica Product transfer from VA National Acquisition Center to Strategic Acquisition Center Discussions with DLA FedMall Cooperative Agreement 7

8. Products: Department Overview Mission:Manage product assignments, product development, procurement list addition and ETS process while ensuring visibility of new products among the various sales channels PRODUCTS - Product development - Engineering production support Textile Products - Commercial distribution support SUPPORT Channel Operations Essentially the Same (ETS) - Product designation - Compliance monitoring Niche Products & Commercial - Federal & Commercial product development - Engineering product support Commodity Product Management - Develop New Products - Refresh Existing Items Product Development Support - Product Assignment - Product Reporting Military Resale Program management - 11

9. Product Management & Development Shawn Spengler Director Jan-San & MRO Kevin Campbell Senior Director, Products Amanda Alderson Program Director Office Products Tom Black Director Niche Products Sally Didonato Director Textiles Products Michelle Grant MRO Associate Product Manager Richard Hill Jan-San Associate Product Manager Ashley Kraus Associate Product Manager Office Products Ryan Gold Niche Associate Product Manager Buster Parrott Commercial Product Manager Develop opportunities to expand AbilityOne and commercial product manufacturing. Coordinate all activities of NIB s product development which include: product identification, engineering review, agency support and customer interface. Assist in production startups, increase blind labor rates on projects and resolve customer issues. Senior Director: Kevin Campbell, kcampbell@nib.org, (703) 310-0538 Office Products: Amanda Alderson, aalderson@nib.org 703-310-0347 JanSan/MRO: Shawn Spengler, sspengler@nib.org 703-310-0559 Niche: Tom Black, tblack@nib.org, (703) 310-0396 9

10. Textiles Operations Sally DiDonato Director Textile Operations Jeffrey Papalia Senior Development Engineer Marisol De Matos Amy Fletcher Project Manager Technical Training Manager Barbara Hutton Technical Training Specialist Customer Interface Engineering Review Agency Technical and Production Support Director: Sally DiDonato, sdidonato@nib.org, (703) 310-0390 10

11. FY16 Goals/Objectives - Textiles Meet or exceed assigned new employment goals of 122 Blind Work Years (BWY) and project completion goal of 15. Goal for Textiles: 148.61 BWYs and 12 Projects added to the Procurement List Major Programs: Army Combat Uniform Coat (59 BWYs) Navy Running Pants (29.15 BWYs) Army Wind Jackets (20.03 BWYs) EWOL Jacket & Trousers (15.59 BWYs) Will finish FY16 with 149.72 BWYs an 14 Projects 11

12. Business Environment Majority of items changed to OCP Army no longer wants to pay royalties Business is stable some increase in demand for Afghan Army under current contracts New Project Forecast: Female Fit ACS Army Poncho Liner Hydration Cleaning Kits 12

13. Business Environment (Continued) Textiles Sales Thru May 2016 $141,186,763 Thru May 2015 $116,068,577 Increase $ 25,118,186 Projected Additional Increase end of FY 16: $14M Projected Total Sales for FY 16: $155M Possible increase with End of Year Funds Continuous Resolution could have an effect on sales 13

14. Business Development NIB has employed Managing Procurement Solutions as Consultant MPS brings years of experience with Government contracting and FPL Charter: Coordinate visits and or strategic planning sessions with major customers Identifies areas of opportunities for FPL or M&D Meetings held with PM SCIE and PM SPE to discuss NIB capabilities 14

15. Textiles: Challenges Customer Sponsorship Contracting Agencies have small business goals Competitive Pricing Cost Margins Competition with Industry Erratic Customer Demand Labor Intensive Blind Worker Availability & Skill Sets Meeting Ratio (75%) 15

16. Manufacturing and Development (M&D) Seven NPAs in the M&D Pool Source America is Prime (NPAs are subcontractors) LCI, BISM, Lions Volunteer, Winston-Salem, San Antonio, Seattle and Greensboro NIB involved in several M&D Projects this FY Airborne Rucksack Hydration Bladder Cleaning Kits JFADE 12 Projects expected for FY 17 16

17. Pricing Realities of Current Market Prices Commercial firms bidding low prices to keep doors open Customer feels these prices are indicative of a fair market price since contractors are able to deliver on time with quality items Difficult for Ability One Producers to participate in textile items. Need to review O/H and Margin to be in line with commercial firms. 17

18. Contract Performance Adherence to contract schedules is paramount Customer do not see individual Agency but NIB as a whole Past performance is used to assess NIB s capability on new projects NPAs that are prime need to communicate issues that will delay performance with NIB. DLA will not issue delivery orders when contract is in delinquent status Delinquency Rate: 16% - last year 26% In Comparison: Commercial Contracts: Source America: Federal Prison Industries:

19. Operations Support Chuck Froemke Assistant Vice President Operations Support Annelie Eyre Channel Operation Manager Quan Leysath Product Development Support Manager David Barrett Team Lead, ETS Procurement List (PL) Addition Administration SourceAmerica & Commission Relationship Management Launching products to our Channel Partners Identification of new ETS designations at product launch and throughout the lifecycle of a product and subsequent housing of data ETS Compliance monitoring of authorized AbilityOne MAS holders and Solicitations posted by federal agencies AVP: Chuck Froemke, cfroemke@nib.org, (703) 310-0545 Quan Leysath, qleysath@nib.org 703-310-0458 Annelie Eyre, aeyre@nib.org 703-310-0525 19

20. AbilityOne Channel Partner Distribution Network 2016 NIB facilitates the management of the networks Producing NPA Wholesalers GSA GSA Purchase Requisition 600 + Commercial Distributors BSCs: NIB, , Commercial AbilityOne.com Federal Customers: Army, Navy, AF, Marines DHS, USDA,, DOT DOE, DOE, VA, NASA, EPA HHS, NSF, HUD, GPO,USPS,DOJ, DOA,DOS Legend Order Flow Product Flow 20

21. ETS Team Essentially the Same David Barrett ETS Lead Jennifer King Program Director, Special Projects & ETS Policy Vacant ETS James Frick- Tordella ETS Coordinator Identification of new ETS designations at product launch and throughout the lifecycle of a product ETS Compliance monitoring of authorized AbilityOne MAS holders and Solicitations posted by federal agencies Maintain ETS database containing all ETS designations Issuance of ETS quarterly files to channel partners Challenge processing Consolidated reporting of compliance actions Team Lead: David Barrett dbarrett@nib.org 703-310-0584 21

22. ETS Metrics as of July 2016 FY16 Results: Infractions found in the BSCs and Solicitation Monitoring through June 2016 total 224 ETS infractions (Solicitation Monitoring 140 infractions and BSC- 84 infractions) Base Supply Center (BSC) compliance visits total 69 (14 locations containing ETS and 55 ETS Free). All but one AbilityOne location was ETS free. The non- AbilityOne operated stores are the biggest concern with 83 out of 84 ETS infractions found at GSA managed stores (operated by Office Depot and Grainger) or MANCON operated Solicitation monitoring successfully converted $7.1M in potential sales. This figures includes 27 service contract conversions valued in excess of $4.4M where we successfully inserted FAR clause 52.208-9 requiring contractor use of mandatory source of supply GSA Advantage Compliance. Based on GSA Advantage transactional sales, the Program lost $960,000 due to the sale of ETS on GSA Advantage only from October- May 2016. DoD Emall and distributor ecommerce sites are excluded from this figure. However, they continue to be sources of leakage. Distributors under a Compliance action: The Commission issued warnings (x12) and probationary notes (x3) to 15 dealers based on the sale of ETS on GSA Advantage. 22

23. Military Resale (MR) Operations Anchen Wagner Military Resale Coordinator Anne-Marie Wallace Military Resale Program Director Tracye Varner Product Manager, Military Resale Serves two distinct markets: Commissaries and Exchanges in a retail environment. 18 Non Profit Agencies are involved in the program Provides program management, Broker Management, Distribution Management and Product Management Two product categories SKILCRAFT Program - 68% of sales Impulse Marketing Program (IMP) 32% of sales Director: Anne-Marie Wallace, awallace@nib.org/ 703-310-0368 23

24. Contact Marie-France Vareilles Vice President, Products 703-310-0472 mvareilles@nib.org Sally DiDonato Director, Textiles 703-310-0390 sdidonato@nib.org 24