Military Life News

Military Life News, Commissary Rewards and Military Discounts

The Commissary’s 5% Surcharge Isn’t Going Away

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There are so many changes happening at the commissary that many people have questioned if the 5% surcharge will be going away as well. At this point, the Defense Commissary Agency (DeCA) hasn’t announced that it is considering it.

The Commissary's 5% Surcharge Isn't Going Away

When the commissary was first approved, it was set by law that goods would be sold at cost plus a 5% surcharge. The surcharge covers the cost of maintaining and improving commissary infrastructure.

The government is always looking for ways to save money and the commissary certainly takes a big chunk of the defense buget. The government wants DeCA to be more self-sufficient. If they drop the surcharge, then more taxpayers’ money would have to fund the commissary.

When the commissary was first approved, it was set by law that goods would be sold at cost plus a 5% surcharge. The surcharge covers the cost of maintaining and improving commissary infrastructure. The government funded the rest.

For FY 2018, DeCA requested $1.3 billion in appropriations to cover costs such as: civilian and military labor, labor contracts, transportation of commissary goods overseas, and other general and administrative support. Many new programs have been implemented since to help reduce federal funding.

What has changed at the commissary?

Quite a lot has changed recently.

Have you noticed prices at the commissary aren’t the same? That’s because DeCA moved from set prices to variable pricing. That means that prices are not consistent across the country now. If you live near D.C., you’ll find prices are higher there than at a commissary in Georgia. That’s because the cost of living is higher in D.C. and therefore, items cost more.

Goods fluctuate with market prices as well.

Previously, prices changed at the commissary when the cost changed through the manufacturer. Now they change with the market similarly to how commercial grocery stores handle pricing.

Commissary shoppers are still getting great savings even with the 5% surcharge. In some areas, shoppers are seeing as much as 44.2% savings. You can read more about variable pricing here and see how much your region is saving.

DeCA has made some substantial changes in a relatively short time to start relying less on the government for their funding. The success of these is noticeable in how much money DeCA requested in appropriations for FY 2019. They asked for $123 million less than they did for FY 2018. While you would think the government would be happy about that, they are already asking how much more money they can reduce their appropriations.

From the customer’s standpoint, how do you feel about these changes?

The government wants to save money but DeCA still wants to bring great savings to military families. The commissary benefit is a part of the compensation package and is a great recruitment and retention tool. It isn’t going away.

Neither is the 5% surcharge. The surcharge is one thing that customers ask about a lot.

The exchange doesn’t have a surcharge; so many people don’t understand why the commissary does.

The commissaries and exchanges are two different entities and are funded differently. For now, the 5% surcharge stays in place, but if another change occurs, combining the commissary and exchange, you might see something different. That’s a long way down the road though as a new study just began this month.

What questions do you have about the commissary’s 5% surcharge?

Is Congress Being a Bully to Military Families?

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Sometimes I feel like Congress is the bully on the school playground. They make all the rules and tell everyone how to play the game they want to play. They give out great toys, our military benefits, but they constantly taunt us saying they’ll take them away.

Military families want Congress to play fair.

When they promise us something, we expect them to live up to it.

Is Congress Being a Bully to Military Families?

What do you think? Is Congress being a bully to military families?

Every year Congress looks at military spending. They question how to save the government money. Military benefits are put on the chopping block every time. Think about the benefits you or your service member were promised when enlisting.

Are you getting everything you were promised? Probably not.

I’ve been part of the military community my entire life. My parents were both in the Army and my husband is in the Navy. I have seen firsthand how Congress plays. I read the transcripts from subcommittees that debate changes to military benefits.

I pay close attention to the wording of bills I follow to see how they progress through the Senate and the House. Not many people do, which is why I enjoy writing about what Congress is doing in regards to changes that affect military families.

I want you to know what is going on so you aren’t blindsided.

So many changes have occurred recently. Have you kept up with what Congress is doing or have you been thrown a curve when you’ve needed a benefit?

Tricare had significant changes start on January 1, 2018, for example. Did you know that while Tricare Prime remained the same, Tricare Standard and Tricare Extra merged to become Tricare Select? A significant part of the change is that beneficiaries will no longer be able to switch between Tricare plans at any time. There will now be an open enrollment window. Life events will continue to enable you to switch however.

I’m sure you know that we got a pay raise this year. That’s one thing military families keep track of. There are some important things to consider though. Congress isn’t necessarily giving away extra money without caveats. You might want to read up on BAH rates for locations you are considering for your next PCS. Rates have gone up, slightly, in some locations and down in others.

Did you know that Congress wants military families to start covering 5% of BAH starting as early as next year?

Military retirement changed on January 1 as well. Congress made the most significant change to military retirement pensions in 70 years. The old plan, known as the legacy retirement system, stayed the same. A new retirement program known as the blended retirement system allows incoming service members to basically set aside money that is matched by the government up to a point. They will no longer be required to stay in the set 20 years to earn a retirement benefit.

The post-9/11 GI Bill also changed. Previously there was a 15-year cutoff date to use or lose the benefit after a service member left the military, if they left after 2013. That was eliminated. Reservists will now see their benefits increased. Surviving dependents and Purple Heart recipients get better benefits as well. A great thing is that those who attended a college that closed in 2015 or later, who ended up losing their money, will now get a new allotment.

These are just a few of the changes Congress sent our way already this year. It’s great that those entering the military will have some improvements to benefits such as the retirement plan and the post-9/11 GI Bill. Those that have been in for a while are excluded from many benefit improvements coming though. Tricare is a major benefit that many people joined the military for. That’s taking a big hit. Copays for medication increased. The dental plan changed, and not for the better, not to long ago. The commissary has changed so that prices fluctuate with the area.

In some ways it’s like Congress is making friends with the new kids and bullying their other classmates on the playground. The bully didn’t play favorites during the recent government shutdown though. Congress mandated that service members continue to work, even if they weren’t going to get paid. And our representatives didn’t lose money or sleep over this decision.

What do you think? Is Congress being a bully to military families?

Have You Noticed Price Changes at Your Commissary?

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Prices have already started shifting at the commissary under the new variable pricing strategy. Have you noticed a difference? The change began earlier this spring when the commissary tested the new program out in 10 stores.

Now the variable pricing strategy is being implemented across the country. Don’t worry; you’ll still see great savings.

Have You Noticed Price Changes at Your Commissary?

Michelle Hooper, a customer service ambassador at the Luke Air Force Base, Arizona, Commissary, scans prices. Luke won the 2015 Defense Commissary Agency’s Director’s Award for the Best Superstore. (DeCA photo)

If you missed the big announcement, last year the National Defense Authorization Act (NDAA) authorized a significant change in how the commissary determines the price of goods. Previously, the commissary set prices at cost plus a 5 percent surcharge. That surcharge money was used to maintain commissary facilities and to build new ones, such as the $38-million commissary at Fort Belvoir.

DeCA, the Defense Commissary Agency, which operates the commissaries, is funded by taxpayers’ money with a budget of $1.3 billion annually. Washington has been trying for years to get the commissary to be more self-sufficient and rely less on federal funding.

This year they are finally attempting to do just that. Variable pricing is one of their strategies. The commissary will also be introducing store brand products as well.

What is variable pricing?

Previously, the products at the commissary were sold at cost plus the 5 percent surcharge. Under variable pricing, the prices of goods will no longer be that simple.

Instead, many factors are taken into consideration when setting the price of products. This includes the market price, cost of obtaining the item, how well the items sell and more.

This isn’t something new the commissary came up with or that those in Washington fathomed. It is how commercial grocery stores determine their prices. The commissary is now embracing a similar pricing system.

Prices have always changed at the commissary based on the cost the commissary incurs for items from manufacturers. Many factors cause manufacturers to change the price they charge, such as weather and their cost of doing business.

Prices will now fluctuate with the market instead of simply with the manufacturers. While some prices might be going down, others might go up. Overall savings at the commissary will not change however.

How much will each region save?

Commissaries are grouped into regions. Market research is conducted in each region to determine the prices goods will be set at. This includes comparing the prices of about 1,000 products locally as well as the estimated 38,000 products that are checked nationally.

The cost of living varies across the country and with that is the cost of food. Researchers then are tasked with comparing the prices of items at different grocery stores across individual regions to determine the best price to set commissary products at. As the cost of living is higher in some areas and lower in others, so too will be the savings level in each region.

These savings will range from 17.6 percent to 44.2 percent over commercial grocery stores depending on which region you are in. Below are the regions and the overall savings expected.

Region            Savings %

New England            21.4%

South Atlantic          19.9%

South Central           18.1%

Pacific                       20.9%

Mountain                  17.6%

North Central           20.2%

Alaska/Hawaii          32.6%

Overseas                    44.2%

Which region am I in?

Now that you know how much savings each region is expected to save, you may want to see which region you are in. Commissaries aren’t in typical geographical groupings, as Virginia is included in the New England region as opposed to the South Atlantic for example.

To find out which region your commissary is in, look for your military installation on this map. Are you in the region you expected? How do you feel about the savings percentage your region is expected to get?

Next time you go to your commissary, check the prices and see if you can tell a difference.

Have you noticed a change in prices at your commissary? Which items did you notice have a price difference? Tell us in the comments section.

How the Federal Hiring Freeze Impacts Military Families

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President Donald Trump instituted a federal hiring freeze in January. Now, military families are feeling the effects of this executive order.

How the Federal Hiring Freeze Impacts Military Families

Have you been impacted by the federal hiring freeze?

How the Federal Hiring Freeze Impacts Military Families and Veterans

Impact on Base Services

Recently, 2 memos from different Army child care facilities have been released. The Child Development Centers (CDC) at Fort Knox and the Army garrison in Wiesbaden, Germany, have ended some of their child care programs due to staffing shortages. Both documents specifically cited the federal hiring freeze, combined with typical staff illnesses and normal staff attrition, as the reason behind the program closures.

In other bases around the world, military families are also seeing reduced hours and programs at their CDCs. Families in Okinawa, Japan, were told that hourly care programs will be suspended due to the hiring freeze.

“The CDC has stopped the drop-in child care,” shared Madalyn Sandstrom. “So now I have to look to friends, and hope for the best. The wait list for some age groups for full-time child care at the closest CDC is one year!”

The hiring freeze is affecting the DoD’s ability to conduct business as usual, according to a recent statement released by MCCS Camp LeJeune-New River. This will affect hours of services at this particular base as well as MCCS LeJeune’s ability to hire new staff members. Camp LeJeune is one of the largest Marine Corps installations. This statement could indicate impacts at other Marine Corps’ installations, as well as similar services at other military bases.

Military Spouses Face Hiring Delays

Military spouses are seeing an impact on their job opportunities. BreAnn Constantineau has had to suspend her federal job search indefinitely.

“I had started searching just before the freeze so that I could time my application to try and start a job once my kids start school in fall,” Constantineau commented. “Now with the freeze, I’m stalled. I’m also really concerned that once it’s lifted, the sheer volume of applications is going to put a real drain on the HR departments, causing even more delays.”

Spouses that were already in the application and hiring process have also had complications.

“I applied for the substitute teacher position back in October,” said Veronica Johnessee. “(I) finally got the call for fingerprints and background check the first week of January. (I) went for my fingerprints and the next day I was supposed to get the background check link via email. Instead, the hiring freeze was on the news. So now I wait.”

Johnessee’s hiring delay also impacts the students and teachers in the DoD Education Activity (DoDEA). Teachers may lack coverage to take sick days or attend professional development sessions. This means that teachers at DoDEA schools may feel obligated to work while ill. Due to lack of coverage, some non-core content area classes may be rescheduled or canceled to fill grade level classroom needs.

Military treatment facilities are also feeling the crunch from the hiring freeze. Some medical facilities are unable to hire new staff. Danielle Olmsted was in the interview process for a nursing position at Camp Foster’s Naval Hospital, but her hiring has been put on hold.

“I had an interview and was told at the interview that they wanted to hire me as a nurse,” explained Olmsted. “I knew I would have to wait awhile, since it already takes months to get someone hired and start working. Now, who knows how long it will be? I feel as though I’m in limbo, and I know the hospital can use nurses!”

Impact on Veteran Hires

According to the Washington Post, veterans make up 31% of the total federal workforce. Veterans receive preference for government positions.

With the hiring freeze, federal agencies and departments will now be unable to fill open positions. This could leave many veterans waiting even longer. The federal hiring process can take weeks or months to finalize under normal operating conditions. This is due to extensive background checks and paperwork processing.

Exemptions for DoD Positions

There are some exemptions in place to allow for normal operation in certain DoD positions and departments. Military personnel should not be impacted and child care positions are also supposed to be out of bounds as well. Firefighters and first responders, as well as intelligence personnel and positions having a direct impact on military missions, are also exempt.

However, there is not an exemption in place to hire people into the human resources department of the DoD. This could impact the speed of the hiring process for exempted positions and departments. As noted above, this could create backlogs for those who have already received job offers.

Have you been impacted by the federal hiring freeze? Tell us your story in the comments section.

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?

3 Commissary Myths that Need to Be Busted

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For the past 2 years, there’s been a lot of talk about possible changes to the commissaries. The talk has come from all directions. There was talk about possible changes from Congress. There was talk about possible changes from the consultants hired by the Defense Commissary Agency. There was talk about possible changes from commissary employees and shoppers.

Now commissary shoppers may be asking themselves which (if any) of these commissary changes are happening. Here’s a little hint: only 1 of the proposals is scheduled to happen in 2017.

What about the other possible changes? For now, these recommendations move to the land of myths and rumors.

Here are 3 myths that you may hear commissary shoppers talking about.

Commissary myth #1: DeCA is merging with the military exchanges.

If you thought this was happening, it was because the Military Compensation and Retirement Modernization Commission presented a proposal with 15 recommendations to modernize the commissaries. One of those recommendations was a proposal to combine the commissary and exchange systems into a single defense resale organization. This proposal was intended to reduce the overhead costs of operating the commissaries and exchanges separately.

When MilitaryShoppers wrote about this proposal nearly 2 years ago, readers said that this proposal was a terrible idea. Repeatedly, readers wrote this comment:

“Do not combine. We would lose our privileges.”

For now, the commissary and exchange are not combining.

The statement that DeCA is merging with the exchanges is a myth, according to DeCA officials. They also said

“DeCA leadership continues to explore different levels of cooperation with the military exchanges. To the extent the Defense Department plans to implement any of those options in future, DeCA is committed to ensuring that employees are well-informed and equipped with information to understand any potential impacts.”

Commissary myth #2: DeCA is exploring a privatization pilot program.

Privatization is happening, right? Wrong, according to DeCA officials.

“Upcoming pilot programs will not be exploring potential privatization (i.e., a private sector company taking over DeCA operations). Privatization was not a part of the changes proposed in the 2016 NDAA and is not planned for DeCA at this time.”

The proposal to privatize the commissaries was discussed repeatedly over the course of the last 2 years. At one point, several large unnamed retailers were approaching DeCA and expressing their interests in running the commissaries.

Like the recommendation to merge the commissaries with the exchanges this idea was met with many vocal opponents. They argued that privatization is not the answer to Congress’s budget concerns. Skeptics argued that privatization wouldn’t save the taxpayers money and would lead to price increases for commissary patrons.

Privatization is off the table. For now.

Commissary myth #3: DeCA’s mission is changing.

“DeCA’s mission has always been to offer the right products at the right prices as a critical benefit to its patrons,” DeCA said on its website.

One proposal, a private label brand, is happening and DeCA is confident that is program will “offer more flexibility in how DeCA delivers that benefit, and positions the agency to be more cost-effective, efficient and better able to protect the benefit for future generations of patrons.”

Congress wants DeCA to be cost-effective and efficient. Veterans want to keep this military benefit without increasing the prices or surcharge. Military families want groceries at a competitive price compared with civilian grocery stores.

We all want the same things for our commissaries. Will the private label brand be enough to save the commissary benefit without raising prices or reducing the benefit?

We’ll just have to wait and see.

Are you hearing any other rumors about changes to your commissary? Tell us in the comments section.

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?

What the Military Community Wants from Washington

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Dear Washington,

Election season has passed, and a new administration is getting ready to take office. That means it’s time for you to take stock of our military capabilities, troops and their families. Yes, the U.S. military is a huge organization and encompasses so much.

However, please take a minute to listen to us, to me, to find out what we want and need from you, right now and for the next 4 or so years.

First, take a hard look at the budget.

Actually look at it with a critical, non-partisan eye. Is there a place where we could trim a little bit of fat without reducing force readiness and family support?

We know that this department has become a huge and growing part of the annual budget. And we also know that something probably needs to change. Please try to do this judiciously, cutting or reducing funding for the (many) redundant portions of the budget while preserving those parts that serve a major purpose in our lives.

We don’t want military funding at the expense of other services we depend on, like education and other programs that serve the general population.

We use these, too. We want them funded and functional.

Next, we need more than lip service about your support.

It’s all well and good to “support the troops” in your speeches and press conferences, but will you actually follow through? A great first step is making sure that our equipment is funded for proper maintenance. With this, include money for adequate training on the equipment. If you want troops ready at a moment’s notice, then they need to be able to access perfectly running equipment AND know how to use it.

Cutting corners here can lead to deadly accidents.

Our fighting force is now a family. That means spouses and kids who depend on the military for both financial and lifestyle stability. If you cut programs that help support military families, you will quickly draw our ire and disdain. This includes medical care, employment programs, child care facilities, commissaries and family readiness programs.

If you want the troops to be ready to go, the whole family needs to be prepared and supported. When those on the homefront feel unstable, that deployed service member can’t do his or her job well.

Don’t forget the veterans, either.

For years now, we have watched the endless saga of corruption and mismanagement at the Department of Veterans Affairs. Hospitals and VA health care facilities have endless waits, leaving many in the lurch. These waits have added extra stress to those suffering from mental and physical health conditions.

Take this department to task and shape it up. Get rid of practices or personnel that are costing lives every day and streamline the process to receive care.

Veterans wrote a blank check to our nation and were willing to sacrifice their very lives to protect ours. The very least we owe them is top-notch medical and mental health care when they leave service.

Help us connect with the other 99%.

About 1% of our country serves in the military. That leaves most Americans without a connection to our troops and their families.

In years past, the entire country banded together to support our troops through war bonds, rations and taxes. Right now, it seems that most Americans just don’t understand what it means to serve our country. Help us to show everyone else what it means to live this life.

Highlight our sacrifices, beyond just the feel-good stories about homecomings and the devastating stories of loss. Help people understand that we have been at war for over 15 years. This war isn’t funding itself.

Pay us what we are worth.

Have you checked on the salaries for our service members from top to bottom lately? Without the “luxuries” of the commissary and military health care, many families wouldn’t be making it financially. Even with these benefits, there are too many military families who qualify for WIC, welfare programs and food stamps. That’s unacceptable.

In addition, due to operational tempo and frequent moves, many military families are trying to make it on just one salary.

Pay our troops what they are worth, based on the work that they do for our country. And pay them without factoring in the “benefits” we all count on just to make it from payday to payday.

These are just a few thoughts, Washington. If you need more ideas, just ask.

MilitaryShoppers readers, what do you want from Washington?

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?

Privatization Proposal Leaves Many Questions Unanswered

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In the ongoing battle to retain commissary benefits, privatization is one option being considered. The hope is that privatization will eliminate the $1.5 billion DeCA budgetary shortfall.

Several large retail companies were asked to provide insight on what such a program might look like. Though the names of those solicited was not revealed, it’s hard to imagine that retailers like Walmart and Target weren’t in the mix.

But is privatization of the commissaries really the answer? Let’s break down this proposal.

Would Prices Go Up?

Many might be surprised to learn that most grocers operate at a profit margin significantly less than the 5% surcharge currently charged by commissaries. And that profit margin includes the cost of facility maintenance, labor, and taxes, plus shipping and distribution. Combined with the national distribution capabilities, massive buying power, and private label options of companies like Walmart, it’s unlikely that the overall cost of most items at a privately managed commissary would go up. We might pay more for some items, but less for others.

However, commissary pricing is almost always less expensive for high-ticket items like dairy and meat.

Would a major retailer be willing to reduce an already skinny profit margin to ensure prices on these items stayed the same?

What about taxes? There is currently no tax at the commissary. Would the same be true for a privately managed facility?

And let’s not forget about our OCONUS commissaries. Is a large retailer in a position to manage these overseas locations?

Are there any restrictions on a private company conducting business in foreign country? Would those restrictions potentially add to the cost of items sold there?

And would a private company be willing to eat losses to ensure service members and their families still have access to the products they need at the prices they can afford? Or would those costs, in turn, cause an increase in pricing at OCONUS locations?

Would Jobs Be Lost?

Approximately 60% of DeCA’s 18,00 employees are veterans, dependents and spouses. Any potential for the loss of jobs is reason enough to give careful consideration to any kind of management transition.

That being said, retailers like Walmart have employment programs for military spouses and veterans.

Is it realistic to assume that some employees would be allowed to keep their jobs? Probably, but the big question is would they be kept at the same rate of pay and offered the same benefits?

And how many current DeCA positions would be eliminated due to duplication within a current private provider’s business structure? Positions like purchasing, logistics, accounting, human resources and others could be in jeopardy.

Will Privatization Create Competition with AAFES?

In a recent report presented to Congress, the success of the AAFES Exchange program relies heavily on a close relationship with commissaries.

But with private retailers, even those typically seen as grocery-only, offering up everything from holiday décor to furniture, would privatization create a conflict of interest? Would those retailers be willing to eliminate those items? If not, would the loss in potential sales at exchanges throw a currently self-supported business model into ruin?

Is Privatization a Viable Option?

With so many questions left unanswered and the unlikely willingness of a major retailer to accept the rules that restrict profit for commissaries, privatization hardly seems like the answer to DoD’s budgetary woes.

But in truth, any push to eliminate or change the program feels likes overkill. While the $1.5 billion budget deficit looks like a large sum, it is less than 1% of the total defense budget.

According to a recent nonpartisan report, every single taxpayer dollar spent equates to nearly double the return in value of benefit given to service members and their families.

Is there any other benefit program that can boast such a claim? And what about a plan B? Should implemented privatization fail to support a pricing structure that provides the same level of value, will additional taxpayer dollars then be called upon to increase service member pay to bridge the gap?

Ultimately, it comes down to this: Are the risks of privatizing the commissary worth the potential loss of such a widely used program? Is it worth the loss or erosion of yet another benefit promised to a community who already sacrifices so much in service to their country?

What do you think it means that a “significant number of companies” have expressed interest in operating the commissaries?