Finding Consensus on Best Approach to Reforming Commissary Benefit Proves Elusive

Neither the Pentagon’s plan for slashing the federal subsidy for military grocery stores nor a congressional commission’s recommendations for gaining efficiencies in the commissary system will prove successful, according to two recent analyses.

Last month, the Military Compensation and Retirement Modernization Commission called for consolidating DOD’s three exchange services with the Defense Commissary Agency as a way to maintain the benefits of all base stores. Consolidating those four organizations into a new Defense Resale Activity, though, would cost $466 million and take from six to nine years to carry out, according to a position paper from the Army and Air Force Exchange Service (AAFES).

The upfront costs wouldn’t be recouped through efficiencies for 85 years, AAFES concluded, reported Stars and Stripes.

Meanwhile, a position paper released by the American Logistics Association — which represents manufacturers and distributors of products sold in commissaries and base exchanges — derides DOD’s proposal to cut funding for commissaries by $322 million in fiscal 2016 and by $1 billion the following year.

The administration’s FY 2016 budget request would “destroy” the shopping benefit available to military families, the association said. The paper, instead, embraces the commission’s consolidation plan.

The underlying issue is that stringent spending caps on DOD’s budget are forcing it to find new savings.

“There should be no illusions that DOD is not going to come after commissary money year after year after year … You are going to have a very difficult time here in the Congress protecting commissary funding. That means services are going to erode,” Commission member Michael Higgins told lawmakers earlier this month.

“We need to reform [to] a single manager” to be able “to negotiate deals that protect MWR [on-base morale, welfare and recreation programs] funding. We can do that,” Higgins told Congress.

DOD’s proposal would save money next year by trimming staff, store hours and the days stores are open. Slashing the Defense Commissary Agency’s $1.4 billion budget by $1 billion would require its U.S. stores to be operated more like a business, meaning customer discounts would suffer significantly. Under the department’s plan, commissaries would be allowed to sell items they cannot now, including beer and wine, which would put exchange profits at risk, according to the story. 

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