Naval Academy starts taking cut from vendors

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

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