Information was not immediately available from commissary officials about whether products will be in the stores by that date or if there is a timeline for those products. But "the new merchandising program" is scheduled to begin Oct. 1, according to a notice to members of the grocery industry from the Defense Commissary Agency, expected to be released June 20.
The commissary agency, which operates commissaries worldwide, is seeking a company — or companies — to implement a private label program that will include all commissaries, all departments and categories of products that they currently stocked, according to a "Notice to the Trade" document digitally signed June 17 by Chris Burns, DeCA’s chief performance officer.
The notice announces DeCA will accept presentations from interested companies from July 18-22.
Private label products are sometimes referred to as "generic" products, usually costing less than national name brands. Commissaries have long sold brands that are similar to private label brands, the same as are sold in some civilian stores, and offered a cost savings, but they were not developed by the commissary agency.
DeCA’s notice states that the private label requirements may include the adoption of an already existing trademarked brand; or the development of a DeCA brand; or a combination of both. The company chosen will be responsible for finding sources for the products, developing the program, and implementing it.
The fiscal 2016 National Defense Authorization Act allows commissaries to sell private label products. The idea is to mark up prices of these lower-cost items so that commissaries can make money off the sale. Commissary items currently must be sold at cost plus a 5 percent surcharge, but a provision is making its way through the legislative process that allows the commissary agency to start a "variable pricing" program to sell at prices different than the cost from the manufacturer or distributor. Thus they could mark up the private label items to make a profit.
But the savings to the commissary agency gained by a private label program would be less than $500,000 over the 10-year period from 2017 to 2026, according to an estimate from the Congressional Budget Office. That estimate was included in a report accompanying the House-proposed version of the fiscal 2017 defense policy bill. The annual commissary budget is $1.4 billion. Defense officials have said it's not possible to entirely eliminate the taxpayer funding, but they are looking at ways to decrease the annual spending.
The private label discussion started to gain traction as a way to help DeCA save taxpayer dollars in the ever-present budget constraints in May 2014, when then-Vice Chairman of the Joint Chiefs of Staff Navy Adm. James Winnefeld testified before the Senate Armed Services Committee that if DeCA could carry generic products, it would be more efficient and could offset at least a portion of that subsidy. He used the example of ibuprofen, saying that DeCA only carried name brands. However, the commissary also carried — and does carry — a value brand option that was cheaper, but it didn't carry a "DeCA" brand label.
Within 30 days after the industry presentations to DeCA are finished July 22, DeCA will send letters announcing the selection of one or more companies. The notice to the industry is not a formal solicitation that will result in a contract but a "merchandising agreement," which is not governed by the Federal Acquisition Regulation.
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.
