Military Commissaries:

Justification as Fringe Benefit Needed; Consolidation Can Reduce Dependence on Appropriations

FPCD-80-1: Published: Jan 9, 1980. Publicly Released: Jan 9, 1980.

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Military commissaries, particularly the appropriated fund support for their operations, have been the subject of controversy for years. Questions have been raised concerning their justification, appropriated fund support, and management.

Although the Congress originally intended that commissaries be operated only where food is not conveniently available at reasonable prices, in 1977 at least 109 of the 265 U.S. commissaries were in metropolitan areas. The services have not sufficiently justified the need for the magnitude of commissaries that currently exists, nor have they substantiated their claims that they are needed as recruitment and retention benefits. For fiscal year 1978, commissaries received an estimated $544 million in direct and indirect subsidies, and it is apparent that they are capable of assuming more of their costs thereby reducing the taxpayers' burden. The Congress has repeatedly requested improvements in commissary management and operations, and studies have concluded that costs can be reduced and still result in improved service to commissary patrons. Eliminating the subsidies would give commissaries an incentive to operate much more economically and could result in savings in excess of those previously projected. Also, the Air Force is not complying with the requirement to partially offset appropriated civilian personnel costs with income from cents-off coupons since it is not depositing the income in the correct Treasury account.

Matter for Congressional Consideration

  1. Status: Closed

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

    Matter: The Congress should: redefine the conditions under which commissaries may be operated, recognizing, if appropriate, any needs demonstrated by DOD; enact specific legislation expressing those conditions; and require conversion to a self-sustaining operation of all stores not meeting the new criteria.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: The Secretary of Defense should: (1) determine whether a need exists to provide commissary benefits; (2) develop adequate data to support that need; (3) identify alternative programs that would meet that need; (4) perform a cost-benefit analysis to determine which alternative would best meet the need; (5) develop realistic criteria to justify stores consistent with the demonstrated need, if a need is identified and commissaries are determined to be the most cost-effective means for meeting it; (6) develop and report to the Congress the justification for continuing commissary operations in consonance with revised criteria based on the demonstrated need and include the impact of requiring commissaries not meeting the revised criteria to be self-sustaining; (7) direct the timely consolidation of the four separate commissary systems into one single agency; and (8) direct the Air Force Commissary Service to deposit income from redemption of cents-off coupons in the Treasury as miscellaneous receipts as required by law.

    Agency Affected:

 

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