Lawmakers have taken a first step toward increasing prices in commissaries as well as privatizing the commissary system, in legislation approved by the Senate Armed Services Committee.
A proposal included in the committee's draft version of the 2016 defense authorization bill would strike the current law that requires commissaries to sell all items at cost and replace it with a provision that would require defense officials to mark up prices to pay for the operating expenses of the commissary system.
Today, the commissary system's annual $1.4 billion budget covers those operating expenses precisely so commissary items can be sold at cost. That gives patrons average overall savings of about 30 percent compared to civilian stores outside installation gates, according to commissary officials.
The armed services committee also has agreed to the Defense Department's fiscal 2016 budget request for commissaries, a total of $1.15 billion, which would be a $322 million cut from this year's budget. That cut would force reductions in operating days and hours in most commissaries. DoD has floated a three-year plan to slash the commissary agency budget by $1 billion.
The proposal also would require DoD to develop a plan due by March 1 to privatize the Defense Commissary Agency, wholly or in part, and assess the potential costs and benefits of such a move. DoD would have to test its privatization plan in at least five commissaries chosen from the commissary agency's largest U.S. markets.
That two-year privatization pilot program would start "as soon as practicable" after the plan is submitted to the House and Senate Armed Services committees, according to the bill.
Defense officials would consult with 'major grocery retailers" in the continental U.S. in crafting the plan, which would have to "ensure the provision of high quality grocery goods and products, discount savings to patrons, and high levels of customer satisfaction while achieving savings for the Department of Defense." However, the provision does not cite a specific level of savings for customers.
DoD also expand the test to allow commissary customers in the catchment areas where stores in the pilot programs are located to order and buy groceries online for home delivery.
Sen. Jim Inhofe, R-Okla., said he fought hard against the provision as the committee drafted its bill and plans to introduce an amendment on the Senate floor to reverse it when the legislation comes up for consideration by the full chamber.
Inhofe called the provision one of his "greatest disappointments" with the draft bill, adding that it ignores recommendations of the the Military Compensation and Retirement Modernization Commission in January.
Joyce Raezer, executive director of the National Military Family Association, noted that the compensation commission also had reviewed the option of privatizing commissaries, but found that companies, including Wal-Mart, were uninterested.
The legislation also specifically calls for spreading the cost of shipping commissary items overseas to all customers worldwide so that overseas customers would not bear the brunt of that change. Joseph Jeu, DeCA's director, has said such a move would boost prices by 2 percent or less.
Under current law, commissary overseas shipping costs are funded with taxpayer dollars, so that patrons overseas pay the same prices as shoppers in the U.S.
The Senate committee bill now goes to the full chamber for a vote. The House version of the annual defense bill has no similar provision, so if the commissary provisions remain in the final Senate bill, the issue will be discussed when House and Senate lawmakers meet later this year to reconcile their respective bills.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
