While recent DoD guidance suggests commissaries could be “prioritized for privatization,” the need to preserve the critical service-earned benefits provided by these stores outweighs potential savings found by turning them over to a for-profit enterprise.

Such a move would risk a benefit that allows young military families to make ends meet and allows retirees, disabled veterans, and survivors to keep up with rising costs.

Just as important under the existing budget climate, commissaries have shown an impressive return on investment: A former Defense Commissary Agency (DeCA) director cited FY 2023 figures showing $1.58 billion in savings by military families provided by $1.421 billion in funding.

MOAA has long championed the need to protect the commissary benefit. In 2016 testimony to a House Armed Services Committee panel on military personnel, we broke down the numbers: Taxpayer funding for the commissary program was equivalent to a 2% across-the-board military raise, but the monetary value of the benefit for an E-5 with eight years of service and a family of four equaled a 9% raise. Younger members would find even greater savings, and those figures don’t include financial relief provided to retirees and survivors.

The DoD Directive

An April 7 memo from Deputy Defense Secretary Steve Feinberg outlined “Guiding Principles for the Department of Defense Workforce Optimization,” with the goal of aligning “every part of our organization around the needs of the warfighter.”

The final recommendation offered: “All functions that are not inherently governmental (e.g., retail sales and recreation) should be prioritized for privatization.”

MOAA argues the retail sales associated with the commissary benefit are critical to the needs of the warfighter:

• Financial Strength: The financial benefit provided by these stores – by law, shoppers must save 23.7% compared with civilian outfits – is a key part of the compensation provided to those who serve. Privatization risks putting profit over the needs of these members and their families.
  
  
• Global Presence: The commissary offers a global network of 235 stores, all with the foremost obligation to serve those in uniform and their families. Servicemembers stationed on every corner of the globe can get a piece of home at a fair price – a key pillar of family readiness.
  
  
• Commitment to Honoring Service: A strong commissary system continues providing benefits well after service, helping keep the promise of taking care of all in uniform, their families, and their survivors.

These priorities can be achieved under the current system without the need to privatize. Commissary leaders are already making plans to become “a commercial grocery chain that happens to work for the Department of Defense,” DeCA director John Hall said April 22 at a meeting of the American Logistics Association. “By that I mean we’ll offer all the products and services, all those good things you see in a good commercial grocery chain, and while doing that, we’re going to continue to deliver 25% savings.”

Tools like variable pricing will help the agency reach this goal. MOAA looks forward to working DeCA officials in keeping the needs of the warfighter as the agency’s top priority.

Lessons of Privatization

While a privatized system may result in short-term savings, past experience suggests the potential for long-term problems. Changes to military housing in the 1990s created a public-private partnership as a way to tackle an ever-growing maintenance backlog, but complaints about unsafe conditions continued, reaching a peak with a Reuters investigation in 2019 that prompted congressionally mandated reforms.

[RELATED: New Law Strengthens ‘Bill of Rights’ Provisions for Tenants in Military Housing]

Those efforts, with MOAA support, continue in the 119th Congress – about 30 years after the privatization took shape.

DoD officials can avoid similar problems by strengthening DeCA and allowing it to continue providing much-needed, service-earned savings to commissary shoppers.

Keep up with the latest on this issue and other MOAA priorities by visiting our advocacy news page.