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Search Results for: National Defense Authorization Act

Variable Pricing Pilot Program Kicks Off at 10 Commissaries

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Two big changes will be coming to commissaries around the world thanks to the 2017 National Defense Authorization Act (NDAA).

Currently the Defense Commissary Agency (DeCA) receives $1.3 billion in taxpayer funding annually. That funding covers the costs of operating the commissaries. Patrons are able to purchase goods at cost plus 5 percent. The 5 percent surcharge covers construction, equipment and maintenance to improve facilities.

Now the government wants commissaries to be more self-sufficient and not rely on such a huge amount of taxpayer money.

The 2017 NDAA, signed into law under the Obama administration, allows DeCA to start working on this in 2 ways. The first is introducing variable pricing and the second is creating a store brand or private label products. Variable pricing will be the first phase of this move and will start in 10 commissaries.

What is variable pricing?

Instead of the prices of goods at commissaries simply being the cost DeCA gets items at, prices now will be determined through multiple factors. This includes the cost of obtaining the item and the market price to name a few.

Commercial grocery stores use this same strategy to determine their product price points. Prices will shift with the market, but overall savings at the commissary will remain the same.

Under the new pricing model, the prices of products sold in commissaries will be based on a specific percent of savings that the same item would be sold for in commercial grocery stores in that particular region. That means that prices will no longer be uniform across commissaries and will instead vary by region and country

Don’t panic. That does not mean prices are about to skyrocket.

Each region has a specific saving percentage required under DeCA’s regional savings index. Overall, commissaries in the United States will have a 20.2% savings over commercial grocery stores. Prices vary even more overseas, so the total savings globally is set at 23.7%.

Depending on where you live, the cost of living can be higher or lower. To keep shoppers happy and enjoying the commissary benefit, different regions will see different prices, but all patrons will see a savings overall.

There are 36 commissaries in the New England area that will see a savings of 21.4% over commercial grocery stores. The 30 commissaries in the South Atlantic area will save 19.9% while the 33 commissaries in the South Central area will save 18.1%. The South Pacific area is slated for a 20.9% savings and the Mountain region will have a 17.6% savings. The North Central area only has 18 commissaries but they will all have a 20.2% savings while the 9 commissaries in Alaska and Hawaii will see 32.6% savings. Commissaries abroad will have a fantastic 44.2% savings over commercial grocery stores.

How did DeCA come up with these percentage savings?

Each market was evaluated independently and the prices were compared to commercial grocery stores in each area. Local and state food tax was taken into consideration as well as the 5 percent commissary surcharge.

The cost of living index was used to determine prices abroad. Each month all of this data will be recalculated to ensure prices stay on schedule with the appropriate savings over local grocery stores. As many as 1,400 items at each commissary will be compared to commercial grocery stores each month to ensure accuracy.

The list of the first 10 commissaries to use variable pricing has not been released as of publishing time. If we didn’t tell you variable pricing was coming, would you notice the difference?

Next time you shop at the commissary have a look around at prices and see if you notice a difference. Perhaps your commissary will be one of the first 10 to try out variable pricing.

What are your concerns about variable pricing at commissaries?

Commissaries Will Offer 400 Private Label Items Starting in May

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For the first time in its history, private label items will be found in your military commissary.

Commissary shoppers know (and often complain) that generic products aren’t available at the commissary.

If you want ketchup, you buy Heinz.

If you want oatmeal, you buy Quaker Oats.

If you want cola, you buy Coca-Cola or Pepsi.

The same quality for a lower price product often referred to as a generic brand, like the Best Value brand found at Walmart stores or the Market Pantry brand in Target stores, isn’t an option at your commissary. There isn’t a store brand for DeCA.

Soon that will change.

The Defense Commissary Agency selected MDV SpartanNash LLC to be its first private label supplier.

“We are excited that DeCA has selected us to support this important initiative, and to provide commissaries with private label products for the first time in their history,” said Dennis Eidson, SpartanNash CEO and Chairman of the Board in a press release.

“This partnership will provide military families with quality options and the opportunity to stretch their food budget. Many of our active duty and veterans are on a limited income, and their military benefit provides savings which are key to meeting their families’ food and household needs. Patriotism is one of our core values, and we are extremely proud to serve our nation’s service members, their families, and military partners around the world,” Eidson said in the press release.

Starting in May, commissary shoppers will see private label items on the shelves in their stores. DeCA officials said the plan is to introduce an initial assortment of 400 items in commissaries worldwide in May 2017. The amount of private label products will be gradually increased with the goal of 1,000 available at commissaries by the end of 2017.

DeCA’s director and CEO Joseph H. Jeu said he is excited to bring private label products to military families.

“They are smart, savvy shoppers who know that private label products are cost-effective alternatives to national brands. We’re excited to help them save more at our commissaries,” he said in a press release.

DeCA reported that 60% of commissary patrons said they would be interested in a DeCA private label.

“Our customers have been asking for private label for a long time,” Jeu said.

Customers aren’t the only ones asking for private label products. Congress had a hand in this decision too.

The 2016 National Defense Authorization Act (NDAA) nudged DeCA to explore the option of private label products. DeCA has been researching ways to keep the commissaries open with less federal funding. The private label brand is only option out of many that DeCA is exploring in the next year.

What do you think of DeCA’s decision to have a private label brand? Would you buy private label products if they were available at your commissary?

GAO Report Says DoD Lacks Data to Make Cuts to Commissaries

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Remember that Department of Defense report that said budget neutrality isn’t a vital option for commissaries?

Well that report isn’t the end of this discussion.

More likely that report is just the beginning of an ongoing discussion about the feasibility of self-sufficient commissaries.

The Government Accountability Office (GAO) recently released a report titled “Plan and Additional Information Needed on Cost Savings and Metrics for DoD Efforts to Achieve Budget Neutrality.” In this report GAO evaluated the DoD’s report and found that it lacked specific data to support its stance that budget neutrality isn’t feasible for commissaries.

“GAO’s analysis found that DoD’s report fully addresses three of the seven mandated elements and partially addresses the remaining four. Although DOD’s report discusses the seven mandated elements, GAO found that including additional information would have made the report more consistent with relevant generally accepted research standards and would have made the report more useful to decision makers,” the GAO report stated.

More useful to decision makers? Wait…what?

Let’s take a step back into the recent history of reports on cost-saving measures for the commissaries.

As commissary shoppers, we know that that DeCA operates the commissaries. Prices at the commissaries are product cost plus a 5 percent surcharge. In fiscal year 2015, DeCA’s annual sales for its commissaries were approximately $5.5 billion. DeCA received $1.3 billion in appropriated funds in fiscal year 2015 to operate the commissaries.

Those appropriated funds are currently under the microscope of the defense department.

The National Defense Authorization Act for Fiscal Year 2016 “mandated DoD to provide a comprehensive plan to achieve ‘budget neutrality,’ which DoD interpreted as ending the use of appropriated funding for commissaries and the military exchange system, by October 1, 2018,” as explained in the recent GAO report.

This mandate has caused a lot of head scratching and number crunching for those at both DoD and DeCA.

The Boston Consulting Group was contracted to conduct 2 separate studies that may lead to cost-saving measures. In February, DoD established the Defense Resale Business Optimization Board. This board is working to help implement reforms within and among the commissary and exchange systems.

Then DoD released its report saying budget neutrality will be difficult, if not, impossible. GAO then reviewed that DoD report as it was directed to in last year’s defense budget. That’s what lead to this report and GAO’s recommendation that “DoD provide information to Congress to support its conclusion about budget neutrality; develop a plan for achieving alternative reductions to appropriations; and identify specific metrics for customer satisfaction, product quality, and savings.”

“DoD did not provide a plan to achieve budget neutrality by October 2018 as mandated because according to the report, DoD cannot achieve budget neutrality without reducing savings to patrons or other benefits provided by commissaries and exchanges.”

“For example, the report stated that drastic changes, such as store closures and price increases, would have to be implemented if DOD were required to achieve budget neutrality. However, DOD did not provide additional information about potential steps to reach budget neutrality, such as cost estimates and assumptions, or include specific details about trade-offs, constraints and limitations to achieving budget neutrality such as reductions in benefits,” the GAO report said.

“Instead of providing a plan, DOD estimated a $2 billion reduction over a 5-year period, which would fall short of achieving budget neutrality by about $5 billion. DOD officials told us the cost savings amount was an arbitrary estimate, and that therefore DOD did not develop details on steps it would take to achieve the $2 billion in savings. DOD officials could not explain the assumptions, methodology, data, specific time frames or DOD efforts that would lead to the $2 billion in savings.”

In case you’re wondering why DoD didn’t conduct these types of detailed analysis in its initial report, DoD experts, who were interviewed by GAO investigators for this report, pointed to time constraints as their reason for the lack of specifics.

“According to DoD officials, for some efforts that are already being considered, DoD officials told us that they did not include some information in the report to support their conclusions because they have not had time to verify the information,” the GAO report said.

Here’s another important nugget of information: DoD concurs with GAO’s recommendations.

Now that we know that the decision makers aka Congress lack the information needed to make decisions about changes to the commissaries, what’s the next step?

I have a strong sense we’ll be reading another federal report in the near future.

What do you think of this GAO’s report saying that the DoD’s report on cost-saving measures for the commissaries was incomplete?

What You Can Do to Help Save Your Commissary Benefit

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It’s no secret that I’m a fan of the commissary. My family has been shopping there since I was a baby and I continue to shop there today! Ironically enough, when my parents were visiting this past week, what did we do? We ran into the commissary for the typical bread, milk and eggs run.

The convenience and cost-effectiveness are the primary reasons military families visit the commissary. But, as the new National Defense Authorization Act (NDAA) is being discussed in Congress, our commissary budget is on the chopping block, yet again. That could mean more commissary closures, reduced hours and days, among other things.

The House of Representatives approved the fiscal year 2017 NDAA, H.R. 4909, on May 20, which authorizes $610 billion in funding for national defense. Now it’s the Senate’s turn to debate it.

While negotiations are in the works, this is our time to speak up! Although it may seem like military families are alone on this one, there are organizations out there lobbying and fighting for our cause.

Join forces with these organizations and they can help amplify your voice.

Blue Star Families (BSF) is a wonderful organization that provides resources, programs and partnerships for military families. Each year, they release a descriptive military lifestyle survey that indicates the concerns of military families. The best part of the survey is that the right people are reading it and it’s making a difference in influencing decisions.

The 2015 survey results showed that military benefits and pay were top issues for military families. Our commissary is looped into the mix there. To make sure our benefits continue to be in the forefront of budgetary decisions, fill out their 2016 survey. Time is running out, so hurry because the closeout date is May 30!

In addition to Blue Star Families, the National Military Family Association (NMFA) is another fantastic organization that strongly lobbies for military families. They provide scholarships and kids’ camps (i.e. Operation Purple Camps) as well as resources for military family and health care issues.

They are also monitoring the defense budget saga and provide detailed explanations to better understand the situation because let’s be honest, it can get really confusing. NMFA recently broke down the defense budget concerns, including the commissary issue here.

With the backing of BSF and NMFA, military families can have a stronger voice. Keep an eye out for volunteer opportunities and ways to contribute to these organizations.

You can also connect with The Coalition to Save Our Military Shopping Benefits. This coalition is “working to protect service members and their families EARNED commissary and exchange benefits, and the critical savings they provide our military community,” according to its website.

You can also contact your state senator  to encourage their vote in the proceedings. This is when you, as an American voter, can and should get your issues heard. Here is how you can contact their offices (be sure to select the U.S. Senate).

That reminds me, have you registered to vote?

Lastly, I want to encourage you to patronize your local commissary because that will also influence the decision-making process.

Every time you shop at your commissary, it’s counted and every dollar you spend is calculated. If the numbers are there, it’s undeniable proof that the commissary system is beneficial.

Are you concerned about proposed changes to the commissary? What are you doing to voice your concerns?

Proposed Changes to the Commissaries in 2016

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For the last 40 years the commissaries have been put on the chopping block only to come out strong.

Last year the Senate and House debated privatizing the commissaries over the next several years to save money. They wanted to cut the $1.3 billion annual Department of Defense subsidy for the commissary system. Luckily, this proposal didn’t make it through.

Don’t relax too much thinking the commissaries will be safe now. This year the politicians are at it again.

The House and Senate have come together on a new plan for the FY 2016 Defense Authorization Act. This consists of:

  • reducing the FY 2016 commissaries budget cut from $322 million to $30 million;
  • they scrapped the idea of privatizing the system and are now requiring a DoD plan to make the commissary and exchange benefit “budget neutral” by the end of 2018;
  • authorized DoD to conduct pilot programs to evaluate ways to achieve commissary and exchange budget neutrality; and
  • specified that these must maintain high levels of customer satisfaction, provide high-quality products, and sustain the current level of savings for customers.

What does this mean for the average shopper at their local commissaries? The most notable change would be prices. Some patrons would notice their prices going up while a select few might find them going down.

How could this be?

What lawmakers are considering here is variable pricing. Currently, prices are set at commissaries across the board. Under this change, commissaries would see price changes based on location.

Rep. Joe Heck, R-Nev., a brigadier general in the Army Reserves chairs an Armed Services subcommittee that lead the hearings recently on overhauling the stores. He says commissaries could improve how they sell products and become more efficient if they utilized a variable pricing method. Following commercial grocery stores strategies, prices would be set by the market.

For example, prices at commercial grocery stores are higher in New York then they are in Alabama. Just reading this proposal, Fort Drum patrons will be balking at the idea, whereas those at Maxwell AFB may be more open to it since they would be the ones possibly seeing the lower prices.

Heck hopes this plan will help get commissaries to a break-even plan. He says that they currently lose money on every sale.

If that doesn’t do the job, the other plan proposed is to create a commissary brand, much like commercial grocery stores have. Selling items under a Defense Commissary Agency label was part of a consultant lead study that was presented to Congress last fall. This is likely to be the main topic of discussion on the Hill this year.

The worry here for most people is that the quality of the products might not be the same as the commercial brands that are currently being sold at commissaries. The study claims that the products would be at the same level and patrons would still save money over local grocery stores. To match that quality however, there would likely be an increase in prices.

If either of these proposals get enough lawmakers to support it, they could be added to the National Defense Authorization Act, which is a huge bill that shapes military policies and takes most of the year to work through.

Will commissaries see changes this year or are they safe, at least for another year?

Only time will tell, but if the last 40 years of failed proposals to cut the DoD subsidy have a standing basis then maybe things won’t change.

Once the presidency changes, initiatives might as well. Everything is a big “if” for the moment and commissary patrons will be watching closely to see if one of the greatest nonpay benefits for service members will see a big change.

What do you think of these proposals to make changes to the commissaries?

What does a mandatory vaccination mean for service members?

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In August, Defense Secretary Lloyd Austin released a memo stating a mandatory vaccination against COVID-19 was necessary to keep “a healthy and ready force.” The Pfizer-BioNTech version of the COVID-19 vaccination was officially approved by the FDA, while it was previously under emergency-use authorization. With this change to official approval, the Department of Defense moved toward requiring vaccination. The Moderna and Janssen/Johnson & Johnson vaccinations are still under emergency-use authorization and are therefore not included.

There is a long history of required vaccinations within the military. Vaccinations for Small Pox and Anthrax are required for deployment and readiness. According to AP News, the Navy and the Marine Corps stated they had zero religious exemption requests for other vaccines in recent years while the Air Force reported there were a few, and the Army did not have any data to share. When the COVID-19 vaccination approval was first announced, the vaccination was offered to military members, but not initially required.

On August 31, Vice Admiral W. R Merz, the Deputy Chief of Naval Operations, Plans and Strategy released NAVADMIN 190/21 which mandated that all Navy service members must be vaccinated for the COVID-19 vaccination.  All Navy personnel must be vaccinated by November 28th, 2021 and reservists must be vaccinated by December 28, 2021. A message from Marine Corps Commandant General Berger stated that “All non-exempt active component personnel will achieve full vaccination no later than 90 days from the date of ALNAV 062/21, and all non-exempt reserve component personnel will achieve full vaccination no later than 120 days from the date. Vaccination could occur on installation or off, proof just needs to be provided to the active or reserve command for appropriate documentation. Exemptions for medical or administrative reasons can be requested through the Navy personnel or Marines command. Among the Marine Corps, a permanent medical exemption can be approved by the first O-5 or O-6 command surgeon in the member’s chain of command after the recommendation by a licensed healthcare provider working for the Department of Defense. Anyone who is not exempt who refuses the vaccination by the deadline will face adverse administrative action.

The Army released its plan for implementing the mandatory vaccination on September 14, 2021, stating that all active-duty units are expected to be vaccinated by December 15, 2021, and Reserve and National Guard units are expected to be vaccinated by June 30, 2022.  Furthermore, it stated that soldiers who refused the vaccine would be counseled through the chain of command and medical providers and that failure to comply could lead to administrative or non-judicial punishment. Soldiers would have the ability to request an exemption through medical, religious or administrative reasons as outlined by Army Regulation (AR) 600-20 and AR 40-562. While pending a request, no punitive actions would be given.

The Air Force released their COVID-19 implementation plan on September 03, 2021. It stated that all active-duty service members without an exemption are required to be fully vaccinated by November 2nd and Air National Guard and Air Force Reserve personnel are required to be fully vaccinated by December 2nd, 2021. Service members can apply for medical or administrative exemption through AFI 48-119_IP and for religious accommodation through DAFI 52-201. Any refusal of the vaccination could lead to punitive actions.

New joins or recruits are required to have vaccination as well. The Navy stated that “new accessions will be fully vaccinated as soon as practicable following service entry” per a Navy message. The Marine Corps stated that “Marines in recruit training will be required to receive the COVID-19 vaccination.”

All across the board – every service member is required to get the COVID-19 vaccination. Even if the service member had a COVID-19 infection previously, vaccination is required.  Any refusal of the vaccination without an exemption is punishable by the Uniform Code of Military Justice (UCMJ).

Per a Pentagon briefing on August 25th, the current percent of service members who were fully vaccinated for each service was the following: Navy and Marine Corps: 73%, Air Force and Space Force 57%, Army: 40%.

Commissary Spends Nearly $4 Million

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The government is constantly looking at ways to save money and each year the commissary budget comes into question. How can they cut the $1.4 billion commissary budget? Over the years many ideas have been presented, from privatizing the commissary to creating a private brand or even using variable pricing.

It has mostly just been a lot of talk.

The government has finally decided to do something more progressive and hired an outside firm to study ways to save money. These cost-cutting studies will cost the commissary nearly $4 million.

The Defense Authorization Act gave the DoD the responsibility of determining how to save the government money by cutting the commissary budget. The Department of Defense contracted Boston Consulting Group to conduct 2 studies in order to determine exactly how to cut the Defense Commissary Agency (DECA) budget. These two studies cost nearly $4 million and yes, that came out of the commissary budget.

The first study, which started in January 2015, has already been complete and cost $2.3 million. Its purpose was to determine any cost-cutting possibilities. Another contract, this time for $1.44 million, was also awarded to Boston Consulting Group and is already in progress. The goal of this study is to develop a way to compare civilian grocery prices with commissary prices to determine a baseline savings.

The Defense Commissary Agency says that customers save on average 30 percent compared to civilian grocery stores based on their own research. The government doesn’t want to just take their word for it however. Boston Consulting Group is now creating a methodology to determine price comparisons.

Will all of this research be worth the cost? It’s hard for the average consumer to see the justification in spending nearly $4 million of the commissary budget on researching how to save money.

The saying “you have to spend money to save money” comes to mind, but that’s a lot of money. What will the return on investment be? What will commissary patrons get out of this?

The second study isn’t complete yest, but the results of the first study are in. The Boston Consulting Group recommended ways to save money in the commissary budget by utilizing variable pricing and creating a private label of products. They also recommended consolidating all of the military exchange systems but that idea has already been turned down.

The Defense Authorization Act gave the Department of Defense the ability to test some of these money-saving options out, such as variable pricing. Variable pricing would mean pricing products differently across the country based off the price in the market. Products in the north typically cost more than some in the south. That means families in some parts of the country will be spending more on groceries than others.

Critics of variable pricing are quick to point out that military service members receive the same base pay no matter where they are stationed, with only basic housing allowance adjusting for location.

As the law currently stands, the commissary is only allowed to sell products at cost plus 5 percent surcharge. While Defense Authorization Act gives the commissary the ability to test variable pricing in areas, the law would have to be changed to implement it permanently.

The creation of a commissary private label was recommended as another option. Those opposed to the idea say that that might actually result in an increase in cost. Civilian grocery stores that have their own private label spend a large sum of money marketing their products to consumers. You have to build up a trust. As it stands, military families trust that the commissary offers quality products at cost plus a small surcharge.

What recommendations will the government take into consideration and when might patrons see changes?

That is yet to be determined, as the second study has not been completed yet. As most things with the government, this is a long drawn-out process.

Do you think these cost-cutting studies will help identify ways to operate the commissaries without taxpayer money?