Facilities investments must be viewed as having two component parts: growing the business and periodic investment thereafter to maintain the productive value of the investment. Growing the business occurs when new investment is made in the form of all-new construction, expansion, or conversion of existing outlets to a new purpose. Increased physical space encourages increased sales and earnings by permitting an expanded stock assortment and by improved service through increased efficiency.
New customers are attracted to the facility, and existing customers can be expected to spend more than they did before. Increased sales, earnings, and Return on Investment (ROI) measure the success of the investment. All interests are weighed and given due consideration, resulting in better projects serving the greatest good and need.
The operational purpose of maintaining the productive value of existing facilities is to retain customers. The physical plant deteriorates over time, making the business less attractive and efficient than newer, more competitive facilities. Maintaining value is accomplished in two ways:
- In the short run, by repairs and maintenance for small, routine expenditures and at less frequent but scheduled intermediate periods.
- Capitalized Image updates and renovations for more complex and expense work. These types of projects restore existing facilities to a condition that is comparable with current retail standards of efficiency and appearance.
Exchange, as a U.S. retailer, must adopt marketplace definitions for the physical plant if we’re to sustain our position in the marketplace. There are standards in the industry for features such as internal finishes, aisle widths, retail fixtures, lighting, landscaping; etc. Our customers are familiar with all major retailers and will generally shop with those offering competitive merchandise selection, pricing, and acceptable standards, including those for the physical plant.
Capital projects fall into two categories:
Long Range Capital Program (LRCP) process is both need and business driven. Its primary focus is to search for opportunity. In short, to a market-direct approach to identifying and responding to changing conditions, Long Range Capital Program projects are those which the Exchange Board of Directors approves. These projects exceed $1.5 million in total cost, or construction costs of $750,000 or greater, and also require services, OSD, and congressional release prior to execution. The project cycle from requirement identification through construction completion is typically three years.
Non-LRCP Projects are smaller projects approved by the Exchange Commander or his designee, and are generally accomplished in 12 months or less. Some require services and OSD release prior to execution. Commanders are encouraged to identify potential projects with their local General Manager at any time. Your input is vital to the process of delivering adequate facilities to make sure that the right buildings, at the right size, are constructed where the demonstrated opportunity and need are the greatest.
Army and Air Force regulations authorize the use of appropriated funds to support Exchange for common services, ground maintenance, facilities maintenance, and installed equipment maintenance.
Common services include such things as pest control, physical security of buildings, police and protection, veterinary service (such as sanitary inspections), and investigations for the presence of asbestos and any necessary corrective action. The host Commander is responsible for providing adequate security for all Exchange facilities.
You may use appropriated funds to purchase, lease, modify, or expand intrusion and duress alarms on Exchange buildings (Ref: AR 215-8 / AFJI 34-211).
Ground maintenance includes any repairs and maintenance of the grounds around the facilities (access roads, parking lots; etc). Facilities maintenance includes roof repair or replacement, and repairs to building exterior structural systems. Installed equipment maintenance includes mechanical and electrical systems, such as heat and air conditioning systems.
You may use appropriated funds to repair and maintain underground storage tanks and related underground piping systems. This includes repairing or replacing leaking underground gasoline storage tanks at service stations and disposing of contaminated soil. As “owner” of these installed systems we look to you for guidance pertaining to all actions relating to or required by the Environmental Protection Agency as well as other federal, state, or local regulatory agencies. The Defense Environmental Restoration Account may be a possible source of funding for the clean-up to supplement your scarce O & M dollars. Any Exchange-initiated changes to service station configuration, such as increased tank capacity, is an Exchange responsibility with costs paid by Exchange.