Naval Academy starts tak­ing cut from ven­dors

Those who use the Yard for wed­dings, other events now have to pay 20% of earn­ings

Baltimore Sun - - NEWS - By Danielle Ohl

The Naval Academy now takes a 20 per­cent cut of the com­mis­sion ven­dors earn for any job done on the Yard — from pho­tograph­ing wed­dings at the academy’s chapel to DJing spe­cial events — a change that has elicited shock and out­rage.

The academy re­quired busi­nesses — some that have served the in­sti­tu­tion for decades — to sign con­tracts ef­fec­tive Oct. 1 that give over a por­tion of their com­mis­sions.

Academy of­fi­cials say it is an at­tempt to con­trol re­tail, raise rev­enue for the Busi­ness Ser­vices Divi­sion and make up for short­ages in a fund that pays for mid­ship­men’s recre­ational ac­tiv­i­ties.

The con­tract also stops busi­nesses from charg­ing higher rates to pass the cost of the new fee on to clients — of­ten academy alumni — and gives the academy the right to au­dit ven­dor fi­nances for up to three years from the sign­ing date.

Th­e­su­per­in­ten­dent’s of­fice will re­view the pol­icy this week, spokesman Cmdr. David McKin­ney said, and could in­tro­duce sweep­ing changes.

Two mem­bers of Con­gress who sit on the academy Board of Vis­i­tors also said Fri­day they plan to seek more in­for­ma­tion on the change.

The sud­den scru­tiny comes after The Cap­i­tal news­pa­per sub­mit­ted ques­tions about the pol­icy and the state of the Mid­ship­men Wel­fare Fund. The academy did not make any busi­ness ser­vices rep­re­sen­ta­tives avail­able for in­ter­views.

The Cap­i­tal con­ducted in­ter­views with af­fected re­tail­ers and re­viewed emails from academy staff along with the con­tract ven­dors were asked to sign. Some ven­dors spoke on the con­di­tion of anonymity for fear of re­tal­i­a­tion.

The pol­icy is an ex­ten­sion of how the academy does busi­ness with re­tail­ers on-site.

Be­fore the newrules, the Busi­ness Ser­vices Divi­sion con­tracted with about 46 busi­nesses.

Food trucks serv­ing mids and their fam­i­lies dur­ing events would pay part of their prof­its to the academy. So would pho­tog­ra­phers cap­tur­ing In­duc­tion Day or ven­dors send­ing pre-made care-pack­ages to mids or­dered by par­ents.

The Naval Academy wanted to more evenly reg­u­late all re­tail ac­tiv­ity on cam­pus, McKin­ney said. But the Busi­ness Ser­vices Divi­sion was also look­ing for ways to in­crease rev­enue and thus prof­its that go di­rectly to ben­e­fit the Bri­gade of Mid­ship­men, through the academy’s Mid­ship­men Wel­fare Fund.

The fund sup­ports qual­ity-of-life ac­tiv­i­ties for mids — club sports, cook­outs and the spirit team. It’s not funded by taxes and in­stead re­lies on the prof­its from busi­ness ser­vices. These prof­its have shrunk in re­cent years, McKin­ney said, due to un­fore­seen ex­penses and in­creased over­head costs, among other fac­tors.

The pol­icy dis­pro­por­tion­ately

Naval Academy wed­ding ven­dors.

Wed­dings at the Naval Academy chapel have be­come part of academy cul­ture, a tra­di­tion for alumni, mil­i­tary staff, ac­tive­duty sailors and fac­ulty mem­bers al­lowed to marry there. Mid­ship­men are barred from mar­ry­ing dur­ing their time at the academy, but of­ten quickly or­ga­nize cer­e­monies at the his­toric chapel after grad­u­a­tion.

Of the now 80 Naval Academy-ap­proved busi­ness part­ners, many are pho­tog­ra­phers, videog­ra­phers and wed­ding plan­ners who fear their clients will be de­terred from book­ing the Naval Academy for their cer­e­mony.

Chris Tem­ple, owner of C&J En­ter­tain­ment Agency, took over the busi­ness from his

af­fects fa­ther, an Army vet­eran, who started it in 1974. His agency books bands, DJs and mu­si­cians for events, pri­mar­ily wed­dings. Tem­ple’s agency serves about 10 to 12 wed­dings at the Naval Academy per year, but he wor­ries about smaller ven­dors whose sur­vival de­pends on academy book­ings.

He orig­i­nally wouldn’t sign the con­tract — “I don’t care, I’m not go­ing to ac­qui­esce to this,” he said — but re­con­sid­ered after form­ing a bond with a bride who would have been left with­out en­ter­tain­ment for her March wed­ding.

“I’m at the point to­day where I don’t know what I’m go­ing to do, but I’m not go­ing to screw these peo­ple,” he said.

The ex­panded ven­dor pol­icy co­in­cides with a sep­a­rate $1,500 fee for book­ing the chapel. In 2017, the Busi­ness Ser­vices Divi­sion de­cided to stop us­ing taxes to fund wed­dings at the chapel. The of­fice took over or­ga­niz­ing wed­ding ser­vices on Oct. 1. The fee makes up for the lost fund­ing.

“You have to go back to what your mis­sion is,” McKin­ney said. “The mis­sion at the Naval Academy isn’t to marry mid­ship­men.”

Ven­dors got an email in sum­mer 2018, in­tro­duc­ing the new pol­icy as a tool to vet busi­ness part­ners and en­sure safety for academy em­ploy­ees and res­i­dents. An email from busi­ness divi­sion di­rec­tor Gina Flood re­viewed by The Cap­i­tal jus­ti­fies the pol­icy as a way to en­sure re­tail ac­tiv­ity on the Yard ben­e­fits the Bri­gade of Mid­ship­men but does not men­tion the 20 per­cent com­mis­sion re­quired by the con­tract.

Ven­dors re­acted swiftly — call­ing Flood and con­tract­ing of­fi­cer Martin Rios to protest or ask for clar­i­fi­ca­tion. Some signed after ini­tial hes­i­ta­tion.

But oth­ers said they felt co­erced into sign­ing as they tried to grand­fa­ther the wed­dings booked be­fore the pol­icy went into ef­fect. Some pho­tographed, fed or played for clients they’d al­ready booked, but were sub­se­quently barred from work­ing on the Yard.

“Some peo­ple are get­ting ac­cess to pro­vide their ser­vices with­out sign­ing the con­tract, while oth­ers of us have signed the con­tract and are ba­si­cally be­ing pe­nal­ized for sign­ing the con­tract,” one ven­dor said. “Un­less you have a re­cep­tion on the Naval Academy grounds, there’s no one polic­ing it. I don’t think any­one is re­ally clear on how this is rolling out.”

One wed­ding plan­ner said the ini­tial email seemed pur­pose­fully eva­sive in in­tro­duc­ing the pol­icy with­out ex­plain­ing the ram­i­fi­ca­tions. “Alot of ven­dors got that think­ing it was just an ad­den­dum,” to al­ready es­tab­lished se­cu­rity pro­to­col, she said.

Of­fi­cials told ven­dors the money would ben­e­fit the Mid­ship­men Wel­fare Fund. Si­mul­ta­ne­ously, busi­ness ser­vices of­fi­cials promised some ven­dors they could base the com­mis­sion on their hourly rate, in­stead of the full cost of a job, and pay the academy based on the num­ber of hours they were phys­i­cally on the cam­pus.

The first ven­dor, who does not typ­i­cally charge an hourly rate, said she would cre­ate a pay­ment struc­ture based on her time on the Yard to sat­isfy the con­tract.

“What I’m go­ing to pay them is not go­ing to be very much,” she said. “I do feel like they’ve given me no choice.”

A spokes­woman for Rep. C.A. “Dutch” Rup­pers­berger, who sits on the Naval Academy Board of Vis­i­tors, said the con­gress­man would be “seek­ing a more de­tailed ex­pla­na­tion of these con­trac­tual changes.”

Sen. Ben Cardin, who also serves on the board, also will be look­ing into this is­sue, along with the sta­tus of fund­ing for the mid­ship­men’s mo­rale and wel­fare pro­gram, a spokes­woman said.

Some ven­dors said they would feel less out­rage if the new pol­icy were based on a flat, one-time or yearly fee for reg­is­ter­ing as an ap­proved busi­ness part­ner.

“I would’ve done that in a heart­beat,” Tem­ple said. twit­ter.com/DTOhl

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