Here’s how much you’re saving in military commissaries

Karen Jowers 

January 27, 2020

Commissary customers’ savings continued their upward trend in fiscal 2019, with average worldwide savings of 25.6 percent compared to civilian grocery stores, according to a report from the Defense Commissary Agency.

Overall, those savings are up from the 23.9 percent savings for fiscal 2018. But savings measured in overseas stores declined to 42.2 percent, from the 44 percent savings level in 2018. Officials attribute that drop overseas to the lower cost of living allowance in fiscal 2019.

The commissary agency has been required to track customer savings since fiscal 2016, in order to help defense officials and Congress monitor the commissary benefit.

Savings are calculated for overall U.S. stores, and for overseas, but they’re also broken out by region.

The overall savings level for U.S. stores (to include Alaska and Hawaii) was 22.3 percent for fiscal 2019, up from the 20.2 percent level in 2018.

The commissary agency compares prices with up to three commercial grocers, including one supercenter, in the local area of each commissary in the U.S. The comparison looks at 38,000 items at a regional level and local prices on about 1,000 products that are representative of a shopper’s typical market basket, officials say.

For years, the commissary savings was touted as an overall 30 percent. In 2016, as mandated by law, the commissary agency established a baseline of savings using a more thorough methodology.

Congress requires the commissary agency to maintain savings levels that are reasonably consistent with the 2016 baseline, since the agency can now use variable pricing—lowering or raising prices on items, rather than selling them at cost, as they did for decades previously. Commissary officials have had the authority to do this for several years, as a means of being competitive with local stores, and to allow commissaries to use some of the profit made to reduce the amount of taxpayer dollars — over $1 billion a year — that’s used to operate the stores. Those taxpayer dollars have been a target of a number of people in DoD in efforts to save money. 

One retiree contacted Military Times to say he’s been shopping at commissaries for more than 50 years, “and from what I can see, prices are noticeably going up!” 

The savings depends on the item, as well as the region. 

For example, there are more than 900 items in the commissary’s Your Everyday Savings, or YES!, program, which lowers prices year-round on items that commissary customers purchase the most. That has contributed to the increase in savings, said Robert Bianchi, a retired Navy rear admiral who is DoD special assistant for commissary operations, in the agency’s report on the savings numbers. 

Bianchi said the grocery department — for example, packaged foods — is the main driver of savings for commissaries in three U.S. regions, South Atlantic, North Central and Hawaii and Alaska. The fresh department —such as meat and produce — is the main source of savings for the commissaries in New England, South Central, Mountain and Pacific. 

Here are savings percentages by U.S. region: 

Report: Pentagon needs to improve business practices

At a hearing, the Department of Defense was said to have a culture that’s resistant to change. GAO stated the military is vulnerable to waste, fraud and abuse.

Author: Mike Gooding
Published: 5:34 PM EDT April 27, 2021
Updated: 5:34 PM EDT April 27, 2021

WASHINGTON — The Pentagon spends billions of dollars each year to maintain key business operations and defense-wide agencies and programs intended to support the warfighter.

The Department of Defense has long sought to improve its processes to manage contracts, finances, and supply chain.

But, the Government Accountability Office says the DOD is limited by the lack of reliable information, hampering its ability to monitor and inform its reform efforts. 

01:35 / 035
“DOD suffers from an alarming lack of accurate and consistent data on almost all of its core business functions,” said Elizabeth Field, Director of Defense Capabilities and Management for the Government Accountability Office as she testified Tuesday before the Senate Armed Services Committee.

Field continued, “This problem makes it exceptionally difficult for anyone who wants to drive changes. Our report cites numerous instances in which DOD data were so unreliable or inconsistent that we could not assess underlying issues.”

Dr. Adam Grant, Saul P. Steinberg Professor of Management at the Wharton School of Business of the University of Pennsylvania also spoke.

He said: “I’m afraid the DOD is still, by and large, doing 1950’s-era management.”

Committee members expressed concern.

“These management inefficiencies and a culture of bureaucratic stasis end up costing taxpayers’ money because they create unnecessary waste,” said Sen. Jack Reed (D-Rhode Island).

Sen. James Inhofe (R-Oklahoma) said he’s worried the military can’t compete in attracting the best and brightest, especially when it comes to high-tech jobs.

“The DOD is not an attractive place for smart, talented young people to go and solve tough problems,” he said.

The GAO says the Defense Department has not taken the necessary steps to achieve and sustain business reform on a broad, strategic, department-wide, and integrated basis.

And, it says, DOD’s historical approach to business transformation has not proven effective in achieving meaningful and sustainable progress in a timely manner.

JUST IN: Senate Leader Supports Maintaining Nuclear Triad Budget

2/24/2021
By Meredith Roaten

The Chairman of the Senate Armed Services Committee Sen. Jack Reed, D-R.I., said he supports maintaining current budget levels for the nuclear triad, but he expects the overall defense budget to flatten.

The newly appointed chairman of the SASC said he supported fully funding the three legs of the triad — ground-based intercontinental ballistic missiles, long-range bombers and ballistic missile submarines — he told reporters at a Defense Writers Group event Feb. 23.

“We have to modernize the triad and maintain in my view the triad for strategic reasons that have been successful for about 70 years,” he said.

He noted the B-21 aircraft for the Air Force and Columbia-class boomers for the Navy specifically need to be monitored to stay within cost parameters. Both systems would replace aging weapon systems that are rapidly approaching their retirement dates, some time over the next decade or so.

The senator did not address calls from some members of his party to reduce or delay the ground-based strategic deterrent that will replace the Air Force’s Minuteman III.

“But in every one of these areas, we can’t avoid looking at cost and trying to minimize those costs,” Reed said.

Reed added that the defense budget will likely increase at a slower rate from the Trump administration years.

He would not prioritize considering cuts to the Air Force’s F-35A joint strike fighter jet program, but that he would look at analyzing the high costs and reliability issues that have been a target of critics. The service plans on buying 1,763 aircraft.

“I think we have to make sure that we send the right signal, but also don’t compromise the operations of the Air Force,” he said.

Congress also has to be wary of how cutting equipment would impact the defense industrial base, Reed noted. Final decisions will be made once the committee is able to weigh all these factors, he said.

Though Reed supports the push for modernization, he said there may be cuts to legacy weapons systems. Senators such as Bernie Sanders, I-Vt., have pushed for dramatic budget cuts, but the slim Democratic majority in the Senate means dramatic changes in either direction are likely off the table, Reed said.

Congress passed a more than $700 billion budget for defense for the 2021 fiscal year.  “We’re going to deal with, I think, a much tighter budget going forward, more flat, then rising,” he said. “But within that, I think we have to make judicious calls about what is worthwhile.”

He acknowledged that individual senators often have vested interests in legacy systems, which make cuts challenging.

Functional cost savings could help the defense work within a tighter budget, he said, while mentioning privatizing military commissaries as one example of a way to save on expenses without touching investment for weapons. A majority Republican Senate defeated a proposal to pilot private commissaries in 2016 after a study was commissioned to assess the costs and benefits of the program in 2015.

Meanwhile, Reed addressed opposition from Sen. Jim Inhofe, R-Okla., to the nomination of Colin Kahl, Biden’s pick for the undersecretary of defense for policy.

A spokesperson for Inhofe told POLITICO that the senator has issues with some of Kahl’s policy positions. The news outlet reported Republican criticism of Kahl’s support of the deal with Iran, or the Joint Comprehensive Plan of Action.

Reed said he trusted the hearing process and hoped Kahl would have a chance to defend his positions and his experience during questioning next week, March 4. Kahl’s long-standing relationship with President Joe Biden would help the Defense Department build a strong relationship with the White House, Reed added.

“I think he’ll get a fair shot at the hearing,” he said.

The senator added that the committee will “aggressively” pursue the 59 nominations slated for the Defense Department. The lack of a “real transition” to the Biden administration put the department at a disadvantage that needs to be corrected, Reed said.

“We’ve made the point that we need the nominees as quickly as possible … particularly after the last several years of the Trump administration, with the department really in disarray, acting secretaries and people acting for acting secretary,” he said. “So we’ve got to get back to stability.”

The US Military May Dodge Significant Budget Cuts, to the Ire of Progressives

24 Feb 2021

Military.com | By Steve Beynon

Progressives have geared up for a funding battle to gut the Defense Department, but the Senate Armed Services Committee’s new chairman doesn’t expect any big moves in the next budget.

Sen. Jack Reed, the Rhode Island Democrat who leads the panel, said he expects “tighter budgets going forward, more flat than rising.”

The government must juggle a DoD modernization effort to compete with near-peer threats by boosting cyber warfare and space capabilities after unprecedented spending for economic recovery efforts amid the pandemic.

“I think there’s going to be budget pressure on all budgets,” Reed said in a call with reporters Wednesday. “We’re gonna deal with a tighter budget; we need to make judicious calls on what’s worthwhile.”

A lack of big surprises in the next budget potentially sets up a fight between Democrats on Capitol Hill. Progressives have pounced on the opportunity to scale back military spending in favor of investing in other parts of the government and curtailing the economic devastation caused by the pandemic.

“After the past year … spending $740 billion a year on this one piece of the federal budget is unconscionable,” Sen. Elizabeth Warren, a Massachusetts Democrat who serves on the Armed Services Committee, said at a hearing earlier this month. “We continue to overinvest in defense while underinvesting in public health and so much more that would keep us safe and save lives.”

Sen. Bernie Sanders, I-Vermont, who chairs the Senate Budget Committee, vowed to combat fraud and waste in the DoD and has long sought to cut its budget by 10 percent.

“Military spending, now higher than the next 11 nations combined, represents more than half of all federal discretionary spending,” Sanders said in a statement last year. “If the horrific pandemic we are now experiencing has taught us anything, it is that national security means a lot more than building bombs, missiles, jet fighters, tanks, submarines, nuclear warheads and other weapons of mass destruction.”

President Joe Biden said he doesn’t foresee any major cuts to the Pentagon, telling Stars and Stripes in September that, if anything, there could be a slight increase in funding for emerging warfighting domains such as cyber.

Here’s how much you’re saving in military commissaries

Karen Jowers

January 26, 2021

After a couple of years of increases, commissary savings slipped in U.S. stores in 2020, according to results from the most recent commissary savings report.

Savings in U.S. commissaries decreased by 1.2 points — down to 21.1 percent in 2020 from the 22.3 percent savings calculated in 2019. Commissary officials compare prices in each geographic area to determine how much, on average, a commissary shopper could expect to save on grocery purchases compared with local commercial grocers in that area outside the gate.

Factoring in the overseas savings which increased by 0.4 points – to 42.6 percent — average worldwide savings declined by 0.6 point from savings in 2019, to 25 percent savings worldwide, officials stated.

“Natural variations in pricing are expected, given free market dynamics where suppliers and retailers compete,” said Defense Commissary Agency spokesman Kevin Robinson when asked about the decrease. He noted that DeCA’s calculation for savings includes both internal pricing data and external data from commercial grocers.

“Despite these variations, our goal is always to provide the commissary benefit as consistently as possible,” he said, in an email response to questions.

The 2020 savings percentage is still above the savings level required by law. Commissaries have to maintain savings consistent with the global 23.7 percent savings baseline set in the fall of 2016 before these military grocery stores went to a new pricing system.

“The commissary still represents a huge value to military families,” said Nicole Russell, government relations deputy director for the National Military Family Association. “The uptick in commissary sales during the pandemic illustrates it’s a vital resource to families, particularly those struggling financially.”

The commissary agency has been required to track customer savings since fiscal 2016, in order to help defense officials and Congress monitor the commissary benefit.

Congress requires the commissary agency to maintain savings levels that are reasonably consistent with the 2016 baseline, since the agency can now use variable pricing — lowering or raising prices on items, rather than selling commissary items at cost from the vendor, as they did for decades previously. The stores also require a 5 percent surcharge on the purchases, added at the cash register, which helps pay for new or renovated commissaries.

Commissary officials have had the authority to change prices since 2017, as a means of being competitive with local stores, and to allow commissaries to use some of the profit made to reduce the amount of taxpayer dollars — over $1 billion a year — that’s used to operate the stores. The taxpayer dollars going to the provide the commissary benefit have been a target of a number of people in DoD in efforts to save money. The Senate Armed Services Committee has directed the Government Accountability Office to report on the extent the commissary agency has implemented reforms, and to report on the effect these reforms have had on customer savings and satisfaction, among other things. Lawmakers note that commissary sales fell from $5.5 billion globally in fiscal 2015 to $4.5 billion in fiscal 2019

The commissary agency also received more than $34 million in COVID relief funds in 2020 for personal protective equipment, cleaning and disinfecting supplies, increased store hours for part-time employees to help with store cleanup and shelf stocking, and to pay for additional air shipments to Europe and Pacific and truck deliveries to meet surge demands for products for overseas customers.

The 1.2 point decrease in savings in the U.S. “isn’t significant, given everything that’s happened. I think they’re holding steady, given the circumstances,” said Steve Rossetti, president of the American Logistics Association.

The commissary agency compares prices with commercial grocers, including at least one supercenter, in the local area of each commissary in the U.S. The savings comparison measures about 38,000 specific items at a regional level, and local prices of about 1,000 products that are representative of a shopper’s typical market basket, officials said.Each quarter, the agency does comparisons of one-fourth of the stores, with all the stores undergoing market basket comparison over the course of a year. But in 2020, COVID caused the agency to cancel comparisons scheduled from April through June, because of considerations about physical visits to stores. Officials said that loss of one quarter of the store surveys “did not have a statistically significant impact on the savings levels.

The situation with COVID-19 has caused a variety of problems for the Defense Commissary Agency. Although defense officials declared the stores to be essential and they were kept open, there have been rampant restrictions on entry at a number of bases, which affected any customers, including retirees. Commissary officials have also had problems with shortages of products, and have raised concerns that they weren’t getting their fair share of products from vendors, in comparison to civilian stores. Civilian stores’ volume has been increasing.

The volume has dropped off significantly, which pushes up the cost per unit being shipped.

In the 12 months ending in December, grocery prices increased overall by 3.9 percent, according to the Consumer Price Index. The Defense Commissary Agency doesn’t release information about the overall price increases specifically in commissaries, as it considers pricing data to be proprietary.

The commissary agency’s savings report compares prices with civilian stores to determine the level of savings the benefit offers.

Here’s how much you’re saving, based on where you live:

Champion of Change

Champion of Change_January 2017 Article highlighted

DOD Needs to Improve Business Processes to Ensure Patron Benefits and Achieve Operational Efficiencies

Defense Commissaries:

DOD Needs to Improve Business Processes to Ensure Patron Benefits and Achieve Operational Efficiencies

GAO-17-80: Published: Mar 23, 2017. Publicly Released: Mar 23, 2017.

Full Report Link:  http://www.gao.gov/products/GAO-17-80

Defense Spending Bill Clears Committee with Key Pro-Worker Provisions

WASHINGTON, April 28, 2016 /PRNewswire-USNewswire/ — Next year’s Defense spending bill passed out of the House Armed Services Committee with many pro-worker provisions endorsed by the American Federation of Government Employees, including an amendment to reverse steep cuts in travel expenses for civilian employees who spend months away from home supporting our warfighters.

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Commissary hours would be cut under draft budget proposal

If last year is any indication, lawmakers may not be receptive to suggestions about cutting the commissary budget to such a severe degree. In their fiscal 2015 budget request, DoD proposed cutting $200 million in DeCA funding, the first phase of a proposed three-year plan to slash the DeCA budget by $1 billion. In the end, lawmakers restored that $200 million to the budget.

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Commissary privatization test in Senate defense bill

Lawmakers have taken a first step toward privatizing commissaries, approving legislation that would require a pilot program to test the concept of private companies operating at least five commissaries at large installations.

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“DoD Requests Plan to Close Stateside Commissaries”

Tasked by Defense Secretary Chuck Hagel to find ways to preserve force readiness amid sharply falling budgets, his comptroller and the Joint Staff have asked the Defense Commissary Agency (DeCA) for a plan to close all stateside base grocery stores, say military resale community sources.

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“Congressional Budget Office recommends consolidation of commissaries and exchanges”

If a recent debate over U.S. military commissaries is any indication, the future of the government-subsidized grocery stores is an emotional issue. Many leaped to the commissaries’ defense this week, and some worried their Commissary was effectively getting ready to hold a going-out-of-business sale. You can fault some of the coverage, that may have overly simplified a complex and nuanced issue. The Military Times reported on “a budget-cutting plan to shut down commissaries.” Government Executive reported on projected savings “if the services did away with their own grocery stores.” And, mea culpa, Coupons in the News reported that “the government could save billions by shutting down military-run commissaries.”

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“Commissaries to Run as Business, Not Benefit”

Behind the plan to slash taxpayer support of commissaries is a concept Defense Secretary Chuck Hagel and his senior advisors have embraced that base grocery stores should operate as a business and not a benefit.

This shift is candidly revealed in budget documents released Tuesday and in a legislative packet for implementing the funding cuts drafted by the Defense Commissary Agency (DeCA).

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