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Small Businesses Serving Military Resale 30.03.20




Small businesses serving military resale are necessary but many are vulnerable during the pandemic

ALA has been actively engaged with DOD policy-makers during the pandemic and has been reporting on developments.

On March 27, ALA participated in a call with key DoD officials responsible for the small business programs of the agency. 

We heard from and spoke with Ms. Amy Murray, Director for the Department of Defense Small Business Programs in the Office of Industrial Policy for DOD.   Ms. Murray has a network of some 700 small business advocates throughout the Department, many whom were on the phone call.    62 percent of small businesses serving the Department of Defense are reporting disrupted cash flow during the pandemic and over 50 percent are reporting difficulty in working on contracts because of shelter-in-place orders. 

We relayed our concerns about the plight of small business during the pandemic. 

This is not business as usual.  We all must do all we can to help small business pull through the pandemic.

Last week, in preparation for our conversation with small business program managers of the Department of Defense, we sought input from ALA member small business companies.  We received many comments and requests from these businesses which are fearful for their survival. 

Across DoD, the word has gone out to help small businesses.  Examples include improving cash flow by increasing the progress payment for appropriated fund contracts to 95 percent and changing the places of performance and delivery. 

Also, in the DoD acquisition world, officials are encouraging companies that are not getting paid to contact the agency small business advocates.

For the resale world in particular, agency buyers and contracting official need to be sensitive to the difficulties and plight of small businesses.  They need to be flexible on terms.  

Exchanges are reporting sales increases in consumables, but soft lines, apparel, souvenirs and other categories are seeing a slow-down, with apparel "low on the totem-pole of consumer preferences" according to one industry analyst.  In the commercial retail world, buyers are reportedly working with vendors to extend payment terms and accommodate the massive fluctuations on inventory requirements. 

In commissaries, many small businesses that rely on manufacturer funding for their revenue have seen a decline over the years from tighter margins brought about by a tougher negotiating stance by the commissary agency.  This has tightened up manufacturer funding flow to brokers, advertising companies and others in the resale supply chain.  And, because of the run on stores in the past month, the system is prioritizing high volume SKUs over low-volume SKUs, placing added pressure on small businesses.  One small business owner serving the commissary market said that "the cumulative effect" of DeCA policies over recent years tied to pandemic impact is placing tremendous pressure on survivability. 

ALA urges the resale agencies to be sensitive to the plight of small businesses and work with contracts and payments to ease their paid. 

Resale small businesses should tap small business aid in stimulus bill that just passed

ALA has been tracking all three bills that have passed Congress since the outset of the pandemic. 

This relief is real and unprecedented.  Download a comprehensive Q & A on small business relief and an easy to read chart on the major components of the in the latest CARES Act…the $2 trillion bill that just passed Congress.  This bill is being implemented and the major small business provisions will be rolled out this week.



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