R 111746Z JUL 12
UNCLASSIFIED//
MARADMIN 368/12
MSGID/GENADMIN/CMC WASHINGTON DC LP//
SUBJ/GARRISON RETAIL SUPPLY CHAIN IMPLEMENTATION AT CAMP PENDLETON, CA//
REF/A/MSG/CG I MEF DTG 261804Z MAR 12//
REF/B/DOC/MOA BTWN USMC AND GSA/DTD 26 OCT 07//
REF/C/DOC/PWS BTWN USMC AND GSA DTD 11 OCT 07//
REF/D/DOC/DC IL DECISION LTR DTD 23 MAR 09 WITH ISA DTD 22 JAN 09//
REF/E/DOC/GAO-12-178 JAN 12 GAO REPORT TO CONGRESS//
NARR/REF A ADDRESSED POTENTIAL SHORTFALLS IN THE GARRISON RETAIL SUPPLY CHAIN.  REF B IS SIGNED MOA SELECTING GSA AS 4PL PROVIDER FOR COMMERCIAL SUPPLIES.  REF C IS THE PERFORMANCE WORK STATEMENT STATING MARINE CORPS STRATEGIC AND OPERATIONAL OBJECTIVES AND SERVES AS THE ROAD MAP FOR IMPLEMENTING THE GRSC PROGRAM.  REF D IS DC IL LETTER TRANSITIONING USMC SERVMARTS TO MANAGEMENT BY GSA WITH ENCLOSED AGREEMENT BETWEEN THE MARINE CORPS AND GSA ESTABLISHING COST RECOVERY RATE FOR SERVICES.  REF E IS A GAO REPORT TO CONGRESS SUPPORTING POTENTIAL SAVINGS ON GSA'S STRATEGIC SOURCING INITIATIVE.// 
POC/LETTINHAND, J./CIV/GRSCO/HQMC IL/TEL: 571.256.7134/ DSN 260/EMAIL: EDMOND.LETTINHAND@USMC.MIL//
POC/RUTKOWSKI, K./COL/LPC/COMM: 571-256-7098/EMAIL: KEITH.RUTKOWSKI@USMC.MIL//
POC/AMEY, A./COL/MCICOM G4/COMM: 571- 256-2776/EMAIL: AARON.AMEY@USMC.MIL//
GENTEXT/REMARKS/1.  THIS IS A COORDINATED CG MCICOM AND DIRECTOR LP RESPONSE TO REF A AND APPROVED BY DC IL.
2.  THE REQUEST IN REF A TO DEFER TRANSITIONING CAMP PENDLETON'S CONSOLIDATED MATERIAL AND SERVICE CENTER (CMSC) TO A GRSC PROGRAM DOES NOT MEET OPERATIONAL AND STRATEGIC GOALS FOR REDUCING THE MARINE CORPS COST OF DOING BUSINESS THROUGH AN ENTERPRISE CONCEPT OF OPERATIONS AND IS THEREFORE DISAPPROVED.
3.  THE GRSC PROGRAM WAS DEVELOPED AFTER SIGNIFICANT ANALYSIS AND INSTITUTIONAL DECISION RECORDED IN REFS B AND C.  THE PURPOSE OF THE GRSC IS TO REDUCE THE MARINE CORPS' COST OF DOING BUSINESS AT LOCAL BASE/STATION SERVMARTS BY LEVERAGING THE BUYING POWER OF MARINE CORPS ENTERPRISE WIDE SERVMART PURCHASING.  THE PROGRAM WAS ALSO DESIGNED TO FACILITATE THE STANDARDIZATION OF PROCESSES, SERVICES, METRICS, INFORMATION TECHNOLOGY AND REPORTING ACROSS THE ENTERPRISE.  THE GRSC PROGRAM WILL NOT ONLY REDUCE COSTS BUT ALSO ENABLE THE MARINE CORPS TO ACHIEVE A CLEAN AUDIT OF SERVMART FUNCTIONS.  THE GRSC GIVES USMC LEADERS A "CORPORATE" SINGLE-SECURE PERSPECTIVE OF THEIR 300M ANNUAL BUSINESS LINE, WHICH IS AN IMPORTANT GRSC OBJECTIVE.  TO MEET THESE GOALS, ALL BASES/STATIONS ARE REQUIRED TO PARTICIPATE AND TRANSITION TO THE GRSC MODEL.
4.  WITH SALES FROM CAMP PENDLETON'S CMSC ADDED TO TOTAL SALES VOLUME FROM THE REST OF THE BASES/STATIONS, THE MARINE CORPS AS A WHOLE IS PROJECTED TO SAVE AN ADDITIONAL 9M - 13M DOLLARS ANNUALLY.  THESE SAVINGS WILL ONLY BE ACHIEVED BY THE DECREASE IN THE GSA COST RECOVERY RATE RESULTING FROM THE INCREASED CAMP PENDLETON SALES.  BASED ON CAMP PENDLETON'S SALES VOLUME LAST YEAR, IT IS ANTICIPATED THAT THE COST RECOVERY RATE WILL DECLINE FOR THE ENTIRE MARINE CORPS FROM THE CURRENT AVERAGE OF 9 PERCENT TO BETWEEN 4-5 PERCENT.  IN ADDITION, REGARDING THE CONCLUSIONS OF THE CAMP PENDLETON LOCAL ANALYSIS DISPUTING GRSC COST SAVINGS, OUR CALCULATIONS SHOW THAT INSTEAD OF A 3M DOLLAR INCREASE IN COSTS FOR CAMP PENDLETON'S CMSC CUSTOMERS, CAMP PENDLETON WILL REALIZE AN AVERAGE OF 3 PERCENT IN SAVINGS UNDER GRSC BASED ON CMSC FY11 SALES, FY11 PRICES AND CURRENT COST RECOVERY RATE.  THIS EQUATES TO APPROXIMATELY 1.5M DOLLARS IN SAVINGS FOR CAMP PENDLETON CUSTOMERS WITH SALES OF 38M DOLLARS AT GRSC BEFORE A REDUCTION IN COST RECOVERY RATE IS REALIZED.  ADDITIONAL SAVINGS MAY BE REALIZED AS MCB PENDLETON TAKES ADVANTAGE OF GSA'S STRATEGIC SOURCING INITIATIVE AS IDENTIFIED IN REF E.
5.  IN ADDITION TO LOWER PRICES FOR CUSTOMERS AT THE GRSC, CAMP PENDELTON WILL ACHIEVE ADDITIONAL SAVINGS FROM THE ELIMINATION OF REDUNDANT PHONE, DATA, IT, NAVY WORKING CAPITOL FUNDS MANAGEMENT, CONTRACT, AND SUPPORT COSTS ASSOCIATED WITH OPERATING THE CURRENT CMSC STORE.  GSA IS RESPONSIBLE FOR THESE COSTS UNDER THE CURRENT GRSC MOA BETWEEN MARINE CORPS AND GSA.
6.  WORKING WITH GSA, WE INITIATED A MODIFICATION TO THE CURRENT GRSC PROGRAM FOR BASES/STATIONS TO GAIN THE ABILITY TO INTERFACE WITH MCICOM'S NEW HAZARDOUS MATERIAL MANAGEMENT SYSTEM (HMMS), AND GCSS-MC FOR SELECT TOOLS SUPPORTING SL3 REQUIREMENTS.  AN ONLINE SHOPPING MODULE IS ALSO CURRENTLY IN THE FINAL STAGES OF TESTING BEFORE FIELDING.  IT IS ANTICIPATED GSA WILL COMPLETE AND FIELD ALL OF THESE MODULES PRIOR TO CAMP PENDLETON ACHIEVING GRSC IOC IN THE FALL OF 2013.
7.  INSTALLATIONS CURRENTLY OPERATING ON THE GRSC MODEL ARE WORKING WITH GSA AND ASSOCIATED VENDORS TO EXPAND THE SCOPE OF PRODUCTS AND SERVICES WITHIN THEIR SERVMARTS.  FOR EXAMPLE, CAMP LEJEUNE IS COORDINATING WITH II MEF AND MARINE CORPS SYSTEMS COMMAND ON SETTING UP DISPLAYS WITHIN THE SERVMART FOR THE COMMON NUMBER 10 AND 12 TOOL KITS.  THE VENDOR WILL STOCK THE COMMON ITEMS FOR THE TOOL KITS AND DISPLAY A COPY OF THE SL3 LIST SO CUSTOMERS CAN PLACE AN ORDER FOR THE ITEMS NOT STOCKED.
8.  PER THE MOA WITH GSA SHOULD CAMP PENDLETON OR I MEF HAVE CONCERNS OVER THE COST OF SPECIFIC GRSC ITEMS AT A GIVEN STORE, THE USMC RESERVES THE RIGHT TO RENEGOTIATE THE PRICE OF INDIVIDUAL ITEMS ESPECIALLY IF THE ITEM CAN BE FOUND LOCALLY AT A LOWER PRICE.
9.  PER REF D, THE GRSC PROGRAM WAS APPROVED FOR IMPLEMENTATION IN 2007 AFTER EXTENSIVE ANALYSIS AND A HIGHLY COLLABORATIVE DECISION PROCESS.  BASED ON COST SAVINGS TO DATE, THIS WAS A WISE DECISION.  WHILE TRANSITION OF THIS NATURE IS RECOGNIZED AS CHALLENGING, ENTERPRISE BENEFITS FAR OUTWEIGH PERPETUATION OF LOCAL SOLUTIONS IN THIS AREA.
10.  MESSAGE APPROVED FOR RELEASE BY LTGEN F. PANTER, DEPUTY COMMANDANT, INSTALLATIONS AND LOGISTICS.//