DOD Ready to Study Merging Exchange, Commissary Operations

DOD Ready to Study Merging Exchange, Commissary Operations

Defense officials are considering a plan to consolidate the military’s three exchange services and the Defense Commissary Agency (DeCA), a move intended to streamline the business operations of military resale activities and reduce commissaries’ reliance on taxpayer support. The proposal is contained in a memo drafted by the department’s reform management group, which is reviewing military community services, including base stores, recreation services, family support services and base schools. The memo is backed by the group’s leader John Gibson II, the DOD’s new chief management officer, and appears to be awaiting approval from Deputy Defense Secretary Patrick Shanahan, reports Military.com.

A merger of the three exchange services and DeCA would reverse a decision by the Obama administration two years ago. It also would require Congress to change existing law. The memo calls for the creation of a cross-functional task force by May 1 to assess the business case and develop integration plans for consolidating the organizations by Oct. 31. If the task force determines consolidation makes sense and the reform management group approves its approach, “consolidation shall be executed immediately by the task force director” who will serve “as the new organization’s executive director, exercising authority, direction and control, until the permanent position is advertised and filled.”

The merger proposal comes as the department already is striving to transform the operations of its on-base grocery stores by introducing variable pricing of items by region and higher-margin DeCA brands to counter a long-term drop in commissary sales.

Photo by Michelle Bir

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