Senate Bill Calls for Privatization Pilot for Commissaries

At least five military commissaries would be privatized under a two-year pilot program, according to the version of the fiscal 2016 defense authorization bill passed by the Senate Armed Services Committee Thursday.

In addition to the pilot program, the bill calls for the Governmental Accountability Office to assess the potential costs and benefits of privatizing the entire network of military grocery stores, reported Stars and Stripes. The committee has not yet released the bill text or committee report.

Veterans of Foreign Wars issued a statement opposing the Senate plan because it would cut into the discounts enjoyed by military families and veterans.

“The VFW is against privatizing military commissaries and we are against the pilot program to test it,” said John Stroud, VFW national commander.

The Pentagon has been considering a plan to consolidate the military’s commissary and exchange systems, a recommendation from the Military Compensation and Retirement Modernization Commission in January. Consolidating DOD’s three exchange services with the Defense Commissary Agency into a single Defense Resale Activity would generate savings by combining many of the back-end office and support functions such as logistics and staffing, the panel concluded.

In its FY 2016 budget request, DOD proposed a set of cost-saving reforms to the commissary system, including trimming staff, store hours and the days stores are open. That plan also called for U.S. commissaries to be operated more like a business, forcing the grocery stores to reduce customer discounts.

Opponents of DOD’s proposal — which would cut funding for commissaries by $322 million in FY 2016 and by $1 billion the following year — say raising prices would eliminate the shopping benefit for military families.

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