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Commissary Privatization

Commissary Privatization

Commissary reform has been a long-time goal for many leaders. Last year, we evaded privatization and are still waiting for a congressionally mandated report on options for eliminating reliance on appropriated funds to operate the commissary.

 

This year, the House version of the FY 2017 Defense Authorization Bill (H.R. 4909) allows for a pilot program to change the pricing structure (variable pricing) at the commissary, with authorization to continue the new structure if it meets the right outcomes for patrons. The House also authorizes the Secretary of Defense to convert the commissaries to a non-appropriated fund activity (like the exchange system) if it can meet certain benchmarks for savings, quality and customer satisfaction, subject to Congressional oversight in the process.

 

The Senate draft of the defense bill (S. 2943) will be coming up for votes starting next week. Here is what you need to know about the Senate’s view of commissary reform:

 

  • Price Structure - the Senate wants a pilot program to change the pricing structure similar to the House version. The Senate calls it alternative pricing.
  • Funding- the Senate allows, but doesn’t require, the Secretary of Defense to transfer appropriated funds if benchmarks for savings, quality and customer satisfaction are not met (the House version requires it), nor does it require quarterly reports on meeting those benchmarks (the House version does).
  • Oversight- the Senate does not require the Secretary of Defense to prove benchmarks of savings, quality, and customer satisfaction can be met prior to the conversion to a non-appropriated fund system.
  • Privatization- the Senate wants a pilot program for privatizing the commissaries (not less than two years long at up to five commissaries) and may include a virtual component involving online orders and home delivery. 180 days after the conclusion of the pilot program, a report on the progress of meeting benchmarks for savings, quality and customer satisfaction would be required.

 

The following amendments have been offered to prevent erosion of the commissary benefit:

 

  • Sens. James Inhofe (R-Okla.) and Barbara Mikulski (D-Md.) introduced an amendment to eliminate the draft language allowing for a privatization pilot.
  • Sen. Inhofe also introduced a separate amendment requiring a report on modifying the basic allowance for subsistence to offset the impacts of the price structure changes being introduced.

 

MOAA supports the House version of the bill that provides more Congressional oversight to ensure preservation of the benefit for patrons and flexibility to find the efficiencies that save taxpayers money. MOAA appreciates and supports Sens. Inhofe’s and Mikulski’s tireless commitment to preserving the commissary, which MOAA members consistently rank among the most important non-pay benefits.