The Need To Consolidate Military Exchange Catalog Operations

FPCD-79-60: Published: May 22, 1979. Publicly Released: May 22, 1979.

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The two major military exchange systems, the Army and Air Force Exchange Service and the Navy Resale System Office, operate separate mail-order catalog systems to serve authorized patrons, primarily overseas. In fiscal year 1978, these systems generated sales of $58.5 million and produced profits of about $12 million, which were distributed to support other programs.

GAO concluded that consolidation of the systems would reduce operating costs significantly. Department of Defense (DOD) officials have been aware for years that savings were possible, with only the Navy in disagreement, and announced a new feasibility study involving consolidation, planning no further action until the study was completed. GAO believes that the feasibility of consolidation has been demonstrated and that further delays would only waste precious resources. Consolidation could increase profits, lower prices to patrons, and save taxpayers about $500,000 annually.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: The House and Senate Committees on Appropriations should prohibit the use of appropriated funds to support separate systems.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense should curtail the new study and direct the exchange systems to consolidate mail-order catalog systems.

    Agency Affected:

 

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