A "significant number" of companies have expressed interest in some aspect of operating commissaries, leading defense officials to explore their concepts further, according to the Pentagon's top personnel official.
The organizations responded to a request for information issued by Defense Department officials in May, calling on private companies to provide information about their interest in and ability to take over the operation of all or part of the commissary system. That request was not a contract solicitation, but a request for ideas and proposals.
"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," said Peter Levine, acting undersecretary of defense for personnel and readiness, in a Military Times interview.
He declined to provide further information about the number of responses received or the nature of the ideas.
"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. That next step, if reached, would presumably be a formal request for proposals for a possible contract.
Officials would also need to determine if changes to law would be needed to implement ideas.
"It's not going to be hasty. It's not something we can do quickly. And I can't tell you what the outcome is going to be, even whether there will be a [request for proposals]. I can just tell you that we have enough that it merits a very serious consideration of where we're going from here."
DoD asked companies whether their business could fully perform all the functions of the commissary agency, or if they would need to partner with other businesses. In addition, the request asked whether the company could perform the functions without a government subsidy yet maintain the customer savings as well as product and service quality.
A number of questions related to specific aspects of the commissary agency's operations. The Defense Commissary Agency receives about $1.4 billion a year in taxpayer dollars to operate commissaries around the world, to provide the benefit of discounted groceries. But there is a move to decrease the amount of taxpayer dollars required, and privatization is one idea that is being explored.
One of the organizations that submitted information was the Army and Air Force Exchange Service, according to documents obtained earlier by Military Times. Its concept would put the control of commissaries into the hands of each of the services' military exchanges, and installation commanders.
A source said the AAFES concept was in essence a pre-emptive strike against the possible privatization of commissaries, given the unknown nature of the information other companies would provide to DoD in this request for information.
AAFES' concept would involve a "government-owned, contract-operated" structure that combines military resale experts with leading commercial grocery retailers and distribution experts. A commercial retailer would operate the stores at larger bases under contract with and under the jurisdiction of the exchanges, while the exchanges would directly operate smaller commissary stores.
The concept stops short of consolidating commissaries and exchanges. The stores would be separate, but functions above the store level would be "streamlined," and there would be fewer managers. Defense officials, including Levine, have said that they've ruled out merging the commissaries and exchanges.
Karen Jowers covers military families, quality of life and consumer issues for Military Times. She can be reached at kjowers@militarytimes.com.
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.
