Defense Infrastructure:

DOD Used Available Guidance in Its Decision to Discontinue Commissary Operations at NAS Brunswick, but Criteria Needs Clarification

GAO-11-266R: Published: Apr 20, 2011. Publicly Released: May 10, 2011.

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The Department of Defense (DOD) plans to cease commissary operations at Naval Air Station (NAS) Brunswick, Maine because of a 2005 base realignment and closure recommendation to close the installation and transfer the assigned active-duty personnel and equipment to NAS Jacksonville, Florida. DOD plans to close NAS Brunswick and its commissary by September 15, 2011. As of January 2009, NAS Brunswick commissary--located approximately 6 miles northwest of the air station in the town of Topsham--had more than 19,000 authorized patrons. About 10,000 authorized patrons are expected to remain after the installation closes. Representatives from communities surrounding Brunswick and certain elected state officials expressed concern that the commissary's closure will limit shopping options and purchase prices will rise for reservists, military retirees, and dependents and the relatively small number of active-duty personnel remaining in the region after the installation closes. Commissaries are intended to enhance the quality of life of active-duty personnel, military retirees, and their dependents, and support military readiness, recruitment, and retention goals. Commissaries are not expected to be self-supporting, and provide a noncash benefit for active-duty personnel by offering food and related household and health and beauty items that are similar to merchandise sold in commercial grocery stores. This merchandise is typically offered for sale at substantially reduced prices (including exemption from any sales taxes) when compared to retail prices at commercial grocery stores. DOD estimates that a family of four can save about $4,400 annually (or approximately 30 percent) by shopping at a commissary instead of a commercial grocery store. As directed by Senate Appropriations Report 111-40, the Under Secretary of Defense (Personnel and Readiness) submitted a report to Congress on March 30, 2010, which evaluated the economic feasibility of continuing commissary operations in the Brunswick area following the closure of NAS Brunswick. Per congressional request, we evaluated the extent to which DOD considered applicable guidance in deciding to discontinue commissary operations at NAS Brunswick upon the closure of the installation by September 2011.

The Navy considered the governing DOD instruction for continuing commissary operations at NAS Brunswick after the installation closes. The Navy concluded that the NAS Brunswick commissary met some elements of the general criteria, but did not meet the economic criteria, based on its interpretation of the DOD instruction. Under the general criteria, the Navy considered the mission and personnel factors and concluded that there will be an active-duty mission and at least 100 active-duty armed service personnel within a 20-mile radius of NAS Brunswick upon its closure. Additionally, regarding the geographic factor under the general criteria, the Navy determined that the nearest commissary to NAS Brunswick satisfied the distance and time criteria stipulated in the instruction. However, in considering the economic criteria, the Navy determined that continuing commissary operations would not be fiscally responsible because of projected one-time equipment replacement costs and annual recurring costs, along with a declining population of authorized patrons. Some of the general and economic criteria in the DOD instruction are not clear and are open to interpretation on when to establish or continue a commissary versus when to discontinue commissary operations. The DOD instruction for commissary operations states that the primary consideration in assessing the need for a commissary store and selecting the location of the store--including whether to operate commissaries on closed installations--is the effect on active-duty personnel and their dependents. However, the instruction does not specify how this effect should be measured and used as decision criteria. Additionally, the instruction states that "as a general rule, commissary operations are discontinued when an installation is completely closed and no active-duty or reserve component personnel remain on the installation," which will be the case when NAS Brunswick closes. However, it is unclear what conditions would warrant an exception to the general rule and how the general rule relates to the other criteria. According to Navy officials, they have not continued commissary operations at any domestic Navy installation closed under the base realignment and closure process. At the same time, however, the instruction gives flexibility to continue commissary operations based on other criteria. For example, the instruction states that DOD may continue to provide commissary support to active-duty personnel at or "in the immediate vicinity" of a closed installation when a "significant" active-duty or reserve population remain; however, "significant" and "the immediate vicinity" are not defined, giving the services and the Defense Commissary Agency Board of Directors discretion in recommending whether to continue or discontinue a commissary. Elsewhere, the instruction directs the Defense Commissary Agency to verify that a commissary's operation is "economically supportable" by preparing a business case analysis, but it does not define "economically supportable" thus giving the board of directors (which ultimately makes a recommendation based on the Defense Commissary Agency's analysis) additional discretion in making its recommendations. According to federal best practices, policies and procedures should exist and should be updated when needed to ensure that an agency's planning and implementation activities are carried out as intended. Without clear guidance, there is an increased likelihood of discontinue commissary operations. To help facilitate consistent decision making affecting DOD's commissary program, we are recommending that DOD revise and clarify its guidance by defining key terms and certain analytical procedures. DOD concurred with all of our recommendations and stated that the revisions and clarifications required to address each of the recommendations will be incorporated into the next version of the DOD instruction on commissary operations.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To facilitate consistent decision making for commissary operations, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to revise its commissary guidance for the services. In revising the guidance, at a minimum, DOD should consider specifying whether the minimum of 100 active-duty personnel criterion is a service-specific or DOD-wide requirement and whether temporarily assigned active-duty personnel should be included.

    Agency Affected: Department of Defense

    Status: Open

    Comments: GAO performed a follow-up with the Navy Policy Project Lead of the Resale and Non-Appropriated Funds Office, who reported that changes to the DODI 1330.17 on Military Commissaries are still ongoing and that completion of the instruction will likely not take place before December 2013. He confirmed that the revised instruction should be responsive to all six GAO report recommendations. He did not provide a completion date.

    Recommendation: To facilitate consistent decision making for commissary operations, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to revise its commissary guidance for the services. In revising the guidance, at a minimum, DOD should consider defining or clarifying key terms, such as "significant," "in the immediate vicinity," and "economically supportable."

    Agency Affected: Department of Defense

    Status: Open

    Comments: GAO performed a follow-up with the Navy Policy Project Lead of the Resale and Non-Appropriated Funds Office, who reported that changes to the DODI 1330.17 on Military Commissaries are still ongoing and that completion of the instruction will likely not take place before December 2013. He confirmed that the revised instruction should be responsive to all six GAO report recommendations. He did not provide a completion date.

    Recommendation: To facilitate consistent decision making for commissary operations, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to revise its commissary guidance for the services. In revising the guidance, at a minimum, DOD should consider describing what conditions would warrant an exception to the general rule to discontinue commissary operations when an installation closes and how the general rule relates to the other criteria.

    Agency Affected: Department of Defense

    Status: Open

    Comments: GAO performed a follow-up with the Navy Policy Project Lead of the Resale and Non-Appropriated Funds Office, who reported that changes to the DODI 1330.17 on Military Commissaries are still ongoing and that completion of the instruction will likely not take place before December 2013. He confirmed that the revised instruction should be responsive to all six GAO report recommendations. He did not provide a completion date.

    Recommendation: To facilitate consistent decision making for commissary operations, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to revise its commissary guidance for the services. In revising the guidance, at a minimum, DOD should consider describing how effect on active-duty personnel and their dependents should be measured and used as decision criteria when assessing whether to establish, continue, or discontinue commissary operations.

    Agency Affected: Department of Defense

    Status: Open

    Comments: GAO performed a follow-up with the Navy Policy Project Lead of the Resale and Non-Appropriated Funds Office, who reported that changes to the DODI 1330.17 on Military Commissaries are still ongoing and that completion of the instruction will likely not take place before December 2013. He confirmed that the revised instruction should be responsive to all six GAO report recommendations. He did not provide a completion date.

    Recommendation: To facilitate consistent decision making for commissary operations, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to revise its commissary guidance for the services. In revising the guidance, at a minimum, DOD should consider clarifying which guidance--if any--applies only to discontinuing commissary operations, and which guidance--if any--applies only to establishing or continuing commissary operations.

    Agency Affected: Department of Defense

    Status: Open

    Comments: GAO performed a follow-up with the Navy Policy Project Lead of the Resale and Non-Appropriated Funds Office, who reported that changes to the DODI 1330.17 on Military Commissaries are still ongoing and that completion of the instruction will likely not take place before December 2013. The Navy Policy Project Lead confirmed that the revised instruction should be responsive to all six GAO report recommendations. He did not provide a completion date.

    Recommendation: To facilitate consistent decision making for commissary operations, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to revise its commissary guidance for the services. In revising the guidance, at a minimum, DOD should consider explaining the relevance of the distance and time measures to the nearest commissary in making decisions on whether to discontinue commissary operations.

    Agency Affected: Department of Defense

    Status: Open

    Comments: GAO performed a follow-up with the Navy Policy Project Lead of the Resale and Non-Appropriated Funds Office, who reported that changes to the DODI 1330.17 on Military Commissaries are still ongoing and that completion of the instruction will likely not take place before December 2013. He confirmed that the revised instruction should be responsive to all six GAO report recommendations. He did not provide a completion date.

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