Industry Expresses Interest in Operating Commissaries

Industry Expresses Interest in Operating Commissaries

Pentagon officials are mulling the next steps in their exploration of whether the operation of military groceries could be privatized, after a number of companies expressed interest in taking over some or all aspects of the commissary system.

“We have a significant response. It’s enough of a response that we think that a real evaluation of what we’ve got is needed, but it’s going to be a thoughtful and considered process,” Peter Levine, acting undersecretary of defense for personnel and readiness, told the Military Times.

“The thing we need to do is assess the information we’ve gotten, determine whether it’s enough to proceed to the next step,” Levine said. The next step presumably would be a formal request for proposals for a possible contract, according to the story.

“I can just tell you that we have enough that it merits a very serious consideration of where we’re going from here,” he said.

In May, DOD issued a request for information to industry to assess whether the private sector could replace the Defense Commissary Agency. The department also asked whether a company could operate commissaries while maintaining customer savings without a federal subsidy. The Defense Commissary Agency receives about $1.4 billion annually in appropriations to operate military groceries around the world.

One of the organizations that responded to the request was the Army and Air Force Exchange Service (AAFES), which proposed placing management of commissaries under its control as a way to streamline operations and slash the federal subsidy. Commercial grocery retailers would operate commissaries at larger installations under contract with AAFES, while the exchanges would directly operate smaller commissaries, including those overseas, under the proposal.

Dan Cohen
Dan Cohen
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