In both 2020 and 2021, the National Defense Authorization Act discusses combining the military commissary and exchange system. In August of 2019, Deputy Secretary of Defense David L. Norquist wrote a memorandum recommending the consolidation of the Defense Commissary Agency (DECA), the Army and Air Force Exchange Service (AAFES), the Navy Exchange Service Command (NEX) and the Marine Corps Exchange (MCX). The movement to consolidate was financially motivated. A 2018 study determined that “the benefits of consolidating the defense resale entities far outweigh the costs.” A Government Accountability Office (GAO) review reached a different conclusion.
Currently, the exchange system uses its profit to support on base programming. Overseas, the exchanges operate movie theaters, food outlets and provide school lunches. Across the world, the exchange profits are put back into programming that support the military members and their families on the bases. When the consolidation was first introduced, the concern was raised if these programs would be continued to be supported.
The military commissary provides tax-free grocery shopping to military families on items that are at lower costs than off-base stores. While the prices differ across the country, the commissary is a constant no matter what military base around the world the military family moves to.
Current Deputy Secretary of Defense Kathleen Hicks has rescinded the memorandum requesting consolidation and advised the Department of Defense (DOD) “to cease all efforts to consolidate the Defense resale entities.” A reported from the DOD in later 2021 stated that the consolidation was no longer feasible. The initial 2018 study stated that consolidation would save $700 million to $1.3 billion over a period of five years. New analysis in 2021 determined that consolidation would require $1.5 billion in costs.
While cost-savings is the reason for cancelling the consolidation, other concerns were raised by the National Military Family Association and Military Officers Association of America. The two organizations noted concerns that programming supported by the exchange would end if the consolidation would occur. In addition, the cost would be passed onto customer. There are already increased costs of items in some locations overseas due to the cost of shipping items overseas. Adding an extra cost to them could be significant for military families.
Current law prohibits consolidation of the commissaries and exchanges and with the move away from consolidation, the same services are to continue.